MANAGEMENT INFORMATION SYSTEM (MIS)

MIS is an organized integration of hardware and software technologies, data, processes, and
human elements. It is a software system that focuses on the management of information
technology to provide efficient and effective strategic decision making.
A Management Information System is
 An integrated user-machine system
 For providing information
 To support the operations, management, analysis, and decision-making functions
 In an organization
The system utilizes
 Computer hardware & software
 Manual procedures
 Models for analysis, planning, control, and decision making, and
 A database

MIS Definition
Management Information System (MIS) is an integrated man/machine system for providing
information to hold up the operations, management and decision-making functions in an
organization.
A formal method of collecting timely information in a presentable form in order to facilitate
effective decision making and implementation, in order to carry out organizational operations
for the purpose of achieving the organizational goals.
MIS Meaning
MIS Meaning: A management information system is an acronym of three words, viz.,
Management, information, system. In order to fully understand the term MIS, let us try to
understand these three words.
Management: Management is the art of getting things done through and with the people in
formally organized groups.
Information: Information is data that is processed and is presented in a form which assists
decision-making. It may contain an element of surprise, reduce uncertainty or provoke a manager
to initiate an action.
System: A system is an orderly grouping of interdependent components linked together
according to a plan to achieve a specific goal. The term system is the most loosely held term in
management literature because of its use in different contexts.

Components of MIS
 People Resources: People are required for the operation of all information system.
 Data Resources: Database holds processed and organized data.
 Software Resources: It includes all sets of information processing instruction.
 Hardware Resources: Include all physical devices and materials used in information
processing.
 Process: is a step undertaken to achieve a goal.

Objectives of MIS

What is MIS objective: MIS has five major objectives which include:

1. Data Capturing
2. Processing of Data
3. Storage
4. Retrieval
 5. Dissemination

These MIS objective are discussed below in detail.

Data Capturing
MIS capture data from various internal and external sources of the organization. Data capturing
may be manual or through computer terminals.
Processing of Data
The captured data is processed to convert into the required information. Processing of data is
done by such activities as calculating, sorting, classifying, and summarizing.
Storage of Information
MIS stores the processed or unprocessed data for future use. If any information is not
immediately required, it is saved as an organization record, for later use.
Retrieval of Information
MIS retrieves information from its stores as and when required by various users.
Dissemination of Information
Information, which is a finished product of MIS, is disseminated to the users in the organization.
It is periodic or online through a computer terminal.

Characteristics of MIS
MIS plays a very important role in every aspect of an organization. These characteristics are
generic in nature. 
Following are the characteristics of MIS:
1. System Approach
2. Management Oriented
3. Need-Based
4. Exception Based
5. Future Oriented
6. Integrated
7. Long Term Planning
8. Sub-System Concept
9. Central Database

Advantage of MIS
A good management information system can be used not only for the storage of electronic data
alone but must be able to support the analysis required by management. There are
many advantages of MIS which are utilized by manager to achieve organization goal.

The following are some of the benefits of a good MIS.

 Increased customer satisfaction
 Improved quantity and quality of information
 Improved quality and quantity management decisions
 Improved responsiveness number of the competitor’s condition
 Improved operational efficiency and flexibility
 Improved quality of internal and external communications
 Improved quality of planning
 Improved quality control and supervision

Role of MIS
A management information system (MIS) plays an important role in business organizations.
What is MIS role: There are many roles of MIS and some of the important MIS role are
discussed below:
1. Decision making
2. Coordination among the department
3. Finding out Problems
4. Comparison of Business Performance
5. Strategies for an Organization

Challenges of MIS
What is MIS Challenges: There are three major challenges of MIS: high cost, training of
employees and maintenance cost. These are briefly discussed below:
1. High Cost
2. Training of Employee
3. Maintenance Cost
High Cost
Development of new computerized based information system is a problem for the organization
due to the cost factor and it creates problems because with the change of time there is need of up-
to-date of the information system.
Training of Employee
Employees should have the capacity of learning of the information system with the changing
competitive and business environment; otherwise, it will be difficult for the organization to stay
in the market.
Maintenance Cost
Sometimes a problem arises due to server crash and website crash. Sometimes it leads to the loss
of information. So, maintenance cost is needed to tackle the above problem.

Limitations of MIS
Even though MIS has many benefits but it also has its limitations. Limitations of MIS are
discussed below:
 While MIS may solve some critical problems but it is not a solution to all problems of
an organization.
 It cannot meet the special demands of each person.
 MIS if designed in an improper manner does not serve the management and hence is
of little relevance.
 The MIS is not good if the basic data is obsolete and outdated.
 Mostly information provided by the MIS is in quantitive form. Hence, it ignores the
qualitative information like the attitude of an employee.
Advantages of DATA BASE MANAGEMENT SYSTEM over File system
What is File System?
A File Management system is a DBMS that allows acces to single files or tables at a time. In a
File System, data is directly stored in set of files. It contains flat files that have no relation to
other files (when only one table is stored in single file, then this file is known as flat file). 
What is DBMS? 
A Database Management System (DBMS) is application software that allows users to
efficiently define, create, maintain and share databases. Defining a database involves
specifying the data types, structures and constraints of the data to be stored in the database.
Creating a database involves storing the data on some storage medium that is controlled by
DBMS. Maintaining a database involves updating the database whenever required to evolve
and reflect changes in the mini-world and also generating reports for each change. Sharing a
database involves allowing multiple users to access the database. DBMS also serves as an
interface between the database and end users or application programs. It provides control
access to the data and ensures that data is consistent and correct by defining rules on them. 
Advantages of DBMS over File system:
Data redundancy and inconsistency
Redundancy is the concept of repetition of data i.e. each data may have more than a single
copy. The file system cannot control redundancy of data as each user defines and maintains the
needed files for a specific application to run. There may be a possibility that two users are
maintaining same files data for different applications. Hence changes made by one user does
not reflect in files used by second users, which leads to inconsistency of data. Whereas DBMS
controls redundancy by maintaining a single repository of data that is defined once and is
accessed by many users. As there is no or less redundancy, data remains consistent.
Data sharing
File system does not allow sharing of data or sharing is too complex. Whereas in DBMS, data
can be shared easily due to centralized system.
Data concurrency
Concurrent access to data means more than one user is accessing the same data at the same
time. Anomalies occur when changes made by one user gets lost because of changes made by
other user. File system does not provide any procedure to stop anomalies. Whereas DBMS
provides a locking system to stop anomalies to occur.
Data searching
For every search operation performed on file system, a different application program has to be
written. While DBMS provides inbuilt searching operations. User only have to write a small
query to retrieve data from database.
Data integrity
There may be cases when some constraints need to be applied on the data before inserting it in
database. The file system does not provide any procedure to check these constraints
automatically. Whereas DBMS maintains data integrity by enforcing user defined constraints
on data by itself.
System crashing
In some cases, systems might have crashes due to various reasons. It is a bane in case of file
systems because once the system crashes, there will be no recovery of the data that’s been lost.
A DBMS will have the recovery manager which retrieves the data making it another advantage
over file systems. 
Data security
A file system provides a password mechanism to protect the database but how longer can the
password be protected? No one can guarantee that. DBMS has specialized features that help
provide shielding to its data. DBMS is continuously evolving from time to time. It is power
tool of data storage and protection. 
CHARACTERISTICS OF INFORMATION
Good information is that which is used and which creates value. Experience and research shows
that good information has numerous qualities.

Good information is relevant for its purpose, sufficiently accurate for its purpose, complete
enough for the problem, reliable and targeted to the right person.  It is also communicated in time
for its purpose, contains the right level of detail and is communicated by an appropriate channel,
i.e. one that is understandable to the user.

Further details of these characteristics related to organizational information for decision-making

follows.
Availability/accessibility
Information should be easy to obtain or access.  Information kept in a book of some kind is only
available and easy to access if you have the book to hand.  A good example of availability is a
telephone directory, as every home has one for its local area.  It is probably the first place you
look for a local number. But nobody keeps the whole country’s telephone books so for numbers
further afield you probably phone a directory enquiry number. 
Accuracy
Information needs to be accurate enough for the use to which it is going to be put.  To obtain
information that is 100% accurate is usually unrealistic as it is likely to be too expensive to
produce on time.  The degree of accuracy depends upon the circumstances.
Reliability or objectivity
Reliability deals with the truth of information or the objectivity with which it is presented.  You
can only really use information confidently if you are sure of its reliability and objectivity.
Relevance/appropriateness
Information should be relevant to the purpose for which it is required. It must be suitable.  What
is relevant for one manager may not be relevant for another.  The user will become frustrated if
information contains data irrelevant to the task in hand.
For example, a market research company may give information on users’ perceptions of the
quality of a product.  This is not relevant for the manager who wants to know opinions on
relative prices of the product and its rivals.  The information gained would not be relevant to the
purpose.
Completeness
Information should contain all the details required by the user. Otherwise, it may not be useful as
the basis for making a decision. For example, if an organisation is supplied with information
regarding the costs of supplying a fleet of cars for the sales force, and servicing and maintenance
costs are not included, then a costing based on the information supplied will be considerably
underestimated.
Ideally all the information needed for a particular decision should be available.  However, this
rarely happens; good information is often incomplete.  To meet all the needs of the situation, you
often have to collect it from a variety of sources.
Level of detail/conciseness
Information should be in a form that is short enough to allow for its examination and use. There
should be no extraneous information.  For example, it is very common practice to summarise
financial data and present this information, both in the form of figures and by using a chart or
graph.  We would say that the graph is more concise than the tables of figures as there is little or
no extraneous information in the graph or chart.  Clearly there is a trade-off between level of
detail and conciseness.
Presentation
The presentation of information is important to the user. Information can be more easily
assimilated if it is aesthetically pleasing. For example, a marketing report that includes graphs of
statistics will be more concise as well as more aesthetically pleasing to the users within the
organization.  Many organizations use presentation software and show summary information via
a data projector.  These presentations have usually been well thought out to be visually attractive
and to convey the correct amount of detail.
Timing
Information must be on time for the purpose for which it is required. Information received too
late will be irrelevant. For example, if you receive a brochure from a theatre and notice there was
a concert by your favorite band yesterday, then the information is too late to be of use.
Value of information
The relative importance of information for decision-making can increase or decrease its value to
an organization. For example, an organization requires information on a competitor’s
performance that is critical to their own decision on whether to invest in new machinery for their
factory. The value of this information would be high. Always keep in mind that information
should be available on time, within cost constraints and be legally obtained.
Cost of information
Information should be available within set cost levels that may vary dependent on situation. If
costs are too high to obtain information an organization may decide to seek slightly less
comprehensive information elsewhere. For example, an organization wants to commission a
market survey on a new product. The survey could cost more than the forecast initial profit from
the product. In that situation, the organization would probably decide that a less costly source of
information should be used, even if it may give inferior information.

ECONOMIC AND BEHAVIORAL IMPACT/THEORIES OF INFORMATION SYSTEM.

ECONOMIC IMPACTS

From the point of view of economics, IT changes both the relative costs of capital and the costs
of information. Information systems technology can be viewed as a factor of production that can
be substituted for traditional capital and labor. As the cost of information technology decreases,
it is substituted for labor, which historically has been a rising cost. Hence, information
technology should result in a relative decline in the number of middle managers and clerical
workers as information technology substitutes for their labor (Laudon, 1990). As the cost of
information technology decreases, it also substitutes for other forms of capital such as buildings
and machinery, which remain relatively expensive. Hence, over time we should expect managers
to increase their investments in IT because of its declining cost relative to other capital
investments.

IT also obviously affects the cost and quality of information and changes the economics of
information. Information technology helps firms contract in size because it can reduce
transaction costs—the costs incurred when a firm buys on the marketplace what it cannot make
itself. According to transaction cost theory, firms and individuals seek to economize on
transaction costs, much as they do on production costs. Using markets is expensive (Coase,
1937; Williamson, 1985) because of costs such as locating and communicating with distant
suppliers, monitoring contract compliance, buying insurance, obtaining information on products,
and so forth. Traditionally, firms have tried to reduce transaction costs through vertical
integration, by getting bigger, hiring more employees, and buying their own suppliers and
distributors, as both General Motors and Ford used to do.

Information technology, especially the use of networks, can help firms lower the cost of market
participation (transaction costs), making it worthwhile for firms to contract with external
suppliers instead of using internal sources. For instance, by using computer links to external
suppliers, the Chrysler Corporation can achieve economies by obtaining more than 70 percent of
its parts from other companies. Information systems make it possible for companies such as
Cisco Systems and Dell Computer to outsource their production to contract manufacturers such
as Flextronics instead of making their products themselves.

BEHAVIORAL THEORIES:

Behavioral researchers have theorized that information technology facilitates flattening of

hierarchies by broadening the distribution of information to empower lower-level employees and
increase management efficiency (see Figure 3-9). IT pushes decision-making rights lower in the
organization because lower-level employees receive the information they need to make decisions
without supervision. (This empowerment is also possible because of higher educational levels
among the workforce, which give employees the capabilities to make intelligent decisions.)
Second, because managers can now receive so much more accurate information on time, they
become much faster at making decisions, so fewer managers are required. Management costs
decline as a percentage of revenues, and the hierarchy becomes much more efficient (Drucker,
1988; Bresnahan, Brynjolffson, and Hitt, 2000; Laudon and Marr, 1995; Malone, 1997).

ROLE OF SYSTEM ANALYST:

A systems analyst, also known as business technology analyst, is an information

technology (IT) professional who specializes in analyzing, designing and
implementing information systems. Systems analysts assess the suitability of information
systems in terms of their intended outcomes and liaise with end users, software vendors and
programmers in order to achieve these outcomes. A systems analyst is a person who uses
analysis and design techniques to solve business problems using information technology.
Systems analysts may serve as change agents who identify the organizational improvements
needed, design systems to implement those changes, and train and motivate others to use the
systems.
A systems analyst is typically confined to an assigned or given system and will often work in
conjunction with a business analyst. These roles, although having some overlap, are not the
same. A business analyst will evaluate the business need and identify the appropriate solution
and, to some degree, design a solution without diving too deep into its technical components,
relying instead on a systems analyst to do so. A systems analyst will often evaluate and modify
code as well as review scripting.
A systems analyst may:

 Identify, understand and plan for organizational and human impacts of planned
systems, and ensure that new technical requirements are properly integrated with
existing processes and skill sets.
 Plan a system flow from the ground up.
  Interact with internal users and customers to learn and document requirements that
are then used to produce business required documents.
 Write technical requirements from a critical phase.
 Interact with software architects to understand software limitations.
 Help programmers during system development, e.g. provide use
cases, flowcharts, UML and BPMN diagrams.
 Document requirements or contribute to user manuals.
 Whenever a development process is conducted, the system analyst is responsible for
designing components and providing that information to the developer.

BUSINESS PROCESS

A business process is a series of steps performed by a group of stakeholders to achieve a concrete

goal. Each step in a business process denotes a task that is assigned to a participant. It is the
fundamental building block for several related ideas such as business process management, process
automation, etc.
While there’s a deluge of things written and said about business process management, it’s essential
to understand why they are so important to your business.
IMPORATANCE OF BUSINESS PROCESS
The need for and advantages of a business process are quite apparent in large organizations. A
process forms the lifeline for any business and helps it streamline individual activities, making sure
that resources are put to optimal use.

KEY REASONS TO HAVE WELL DEFIND BUSINESS PROCESS

 Identify what tasks are important to your larger business goals

 Improve efficiency
 Streamline communication between people/functions/departments
 Set approvals to ensure accountability and an optimum use of resources
 Prevent chaos from creeping into your day-to-day operations
 Standardize a set of procedures to complete tasks that really matter to your business
EXAMPLE OF BUSINESS PROCESS
As an example, let’s consider the hiring process of an HR department. Right from posting the job
opening to onboarding the employee, there are multiple steps involved in the process. Although this
can vary from organization to organization, a simple workflow might look like this:

 The HR executive posts the job update

  Multiple candidates apply in a portal
 The HR executive screens the candidates and filters the best-fits
 The selected candidates are called for the next stages of the recruitment
 The right candidate is chosen at the last stage of the recruitment
 Salary and policy negotiations take place
 The offer letter is sent and the candidate accepts
This is then followed by a long employee onboarding process.
STEPS OF BUSINESS PROCESS CYCLES
Step 1: Define your goals: What is the purpose of the process? Why was it created? How will you
know if it is successful?
Step 2: Plan and map your process: What are the strategies needed to achieve the goals? This is the
broad roadmap for the process.
Step 3: Set actions and assign stakeholders: Identify the individual tasks your teams and machines
need to do in order to execute the plan.
Step 4: Test the process: Run the process on a small scale to see how it performs. Observe any gaps
and make adjustments.
Step 5: Implement the process: Start running the process in a live environment. Properly
communicate and train all stakeholders.
Step 6: Monitor the results: Review the process and analyze its patterns. Document the process
history.
Step 7: Repeat: If the process is able to achieve the goals set for it, replicate it for future processes.
BENEFITS OF USING BUSINESS PROCESS
BPM solutions are uniquely designed to boost efficiency of processes across verticals and
organizations. Implementing them brings a host of business benefits such as:
Reduction of risks
BPM software helps prevent and fix errors and bottlenecks thereby minimizing risks.
Elimination of redundancies
Monitoring processes allows for identification and elimination of duplicated tasks. Implementing
BPM software also enhances resource allocation to ensure human effort is invested only in relevant
tasks.
Minimized costs
Improved visibility into processes helps zero in on wasteful expenditure. This way costs are kept to
a minimum and savings are boosted.
Improved collaboration
Transparency fostered by BPM software boosts collaboration between internal teams as well as
external vendors and buyers. Everyone is aware of responsibilities as well as timelines and
bottlenecks.
Agility
Optimized processes enable greater agility in organizational operations. Minimized errors,
bottlenecks, and duplication facilitate quicker turnaround times.
Improved productivity
When processes are shipshape, approvals are faster and information retrieval is easier. Tasks are
routed sequentially without human intervention. These benefits significantly boost productivity of
teams.
Higher efficiency
Comprehensive dashboards in BPM software provide bird’s-eye view of process performance. It
helps managers ensure that turnaround times are short and accuracy levels are high.
Higher compliance
With BPM software, it’s easier and more methodical to create audit trails and comply with industry
regulations and standards.
ESSENTIAL ATTRIBUTES OF BUSINESS PROCESS
There are 4 essential attributes that constitute an ideal business process:
1. Finite – A good business process has a well-defined starting point and ending point. It also has a
finite number of steps.
2. Repeatable – A good business process can be run an indefinite number of times.
3. Creates value – It ultimately aims at translating creation of value into executable tasks and does
not have any step in the process just for the sake of it. In other words, if any step in the process isn’t
adding value, it should not exist.
4. Flexibility – It has an in-built nature to be flexible to change and is not rigid. When there is any
scope for improvement that is identified, the process allows that change to be absorbed within itself
without operationally affecting its stakeholders as much.
TERMS RELATED TO BUSINESS PROCESS
Business process automation is a technology-driven strategy to automate a business process in order
to accomplish it with minimum cost and in a shorter time. It is extremely useful for both simple and
complex business processes. Some areas where business process automation is greatly helpful are:

 Achieving greater efficiency

 Reducing human error
 Adapting to changing business needs
 Clarifying job roles and responsibilities
BPM is a systematic approach to make an organization’s processes more efficient and dynamic in
order to meet the changing needs of business. Continuous improvement is one of the core
underlying philosophies of BPM and it aims to put it at the centre of all BPM initiatives. BPM is an
ongoing approach to continuously make execution of business processes better. Several cloud and
on-premise software solutions are available to implement BPM.
Business process modeling is a diagrammatic/structural representation of flow of business activities
in an organization or function within an organization. Its primary use is to document and baseline
the current flow of activities in order to identify improvements and enhancements for speedy
accomplishment of tasks. Usually, they follow a standard such as Business Process Modeling
Notation (BPMN), which is a globally accepted standard that most process professionals easily
identify with. However, process modeling software like Kissflow enables even a business user to
model a process based on business steps, without having to know any modeling notation.
Business process improvement is a strategic planning initiative that aims at reshaping business
processes based on operations, complexity levels, employee skills, etc. in order to make the entire
process more meaningful, efficient, and contribute to overall business growth. It is a rather drastic
way to rediscover more efficient ways to run a business process rather than taking small incremental
steps. It usually starts with process mapping and its core aim is to align IT resources with
organizational business goals. There are a lot of process improvement tools in the market that’ll
help you out with this.
Business process reengineering is a complete redesign of business processes after thorough analysis
in order to bring drastic impact. It involves identifying the core of inefficiency, culling out tasks that
don’t add any value, and even implementing a top-to-bottom change in the way a process is
designed in order to bring about an overall transformation.
Business process optimization takes an existing process and uses analytics and business process
mining tools to weed out bottlenecks and other significant inefficiencies in a process.
Business process mapping is a procedure to document, clarify, and break down process sequences
into logical steps. The mapping is either done in written format or visualized using flow charts.
Choose a process mapping software that empowers business users to map all the processes based on
logical steps with an intuitive visual interface.
Business process analysis is the process of identifying business requirements and deciding on
solutions that best solve business problems. This can consist of process improvement, policy
development, organizational change, or strategic planning.
Business process integration is the ability to define a process model that defines the sequence,
hierarchy, events, and execution logic and movement of information between systems residing in
the same enterprise.
Business process simulation is a tool for the analysis of business processes to measure performance,
test process design, identify bottlenecks, test changes, and find how a process operates in different
environmental conditions with different datasets.
Business process transformation is a term that means radically changing a series of actions needed
to meet a specific business goal. This is aimed at ensuring that a company’s employees, goals,
processes, and technologies are all in line with each other.
Business process flow is a representation of the process that you’re creating. It usually looks like a
form or flow chart. Every business process flow is composed of stages, and inside each stage, there
are fields (or steps) to complete.
Business process monitoring is the active monitoring of processes and activity to help management
gain insight into important transactions and processes within an enterprise. This helps management
understand how their processes are functioning, and if they’re aligned with the company’s business
goals.