UNIT 1

INTRODUCTION TO MANAGEMENT INFORMATION SYSTEM(MIS)

Management

Management covers the planning, control, and administration of the operations

of a concern. The top management handles planning; the middle management
concentrates on controlling; and the lower management is concerned with actual
administration.

Information

Information, in MIS, means the processed data that helps the management in
planning, controlling and operations. Data means all the facts arising out of the
operations of the concern. Data is processed i.e. recorded, summarized,
compared and finally presented to the management in the form of MIS report.

System

Data is processed into information with the help of a system. A system is made
up of inputs, processing, output and feedback or control.

What is MIS?
• MIS means a system for processing data in order to give proper
information to the management for performing its functions.

• MIS is the use of information technology, people, and business processes

to record, store and process data to produce information that decision
makers can use to make day to day decisions.

• The full form of MIS is Management Information Systems.

• The purpose of MIS is to extract data from varied sources and derive
insights that drive business growth.

• Management Information System or 'MIS' is a planned system of

collecting, storing, and disseminating data in the form of information
needed to carry out the functions of management.
 INFORMATION AND ITS TYPES

Information is an assemblage of data in a comprehensible form capable of

communication. This may range from content in any format – written or printed
on paper, stored in electronic databases, collected on the Internet etc. -to the
personal knowledge of the staff of an organization.

Types of information.

These are as:

• Conceptual information.
• Empirical information.
• Procedural information.
• Stimulatory information.
• Policy information.
• Directive information.

1. Conceptual information: Information which is based on ideas, concepts,

theories, hypothesis etc, and might be used in future or not. It does not always
means the actual meaning. Such information do not have scientific foundation.

• e.g. Charles Darwin’s Theory of Evaluation.

2. Empirical Information: The word empirical information denotes information

acquired by means of observation or experimentation. This information have
scientific foundation.

• e.g. H2+O2=H2O (Water)

3. Procedural Information: Procedural information relates to means by which

the data of investigation are obtained, manipulated, and tested.

• e.g. police officer > Inform to public > Reason of investigation > To find
out actual criminal.

4. Stimulatory Information: Information which creates stimulation among the

people are called to be the stimulatory information.

• e.g. Victory day celebration.

5. Policy Information: This type of information focuses on the decision making

process. It can be obtained from description, picture, diagram etc.

• e.g. Law and Justice.

6. Descriptive information: Information which deals with providing direction is
called directive information.

• e.g. Mode of operation in any organization.

DEFINITION OF INFORMATION SYSTEM AND ITS TYPES

” An information system is a set of interrelated components that works together
to collect, process, store and breakdown the information to support decision
making. ”
Information Systems are classified by organisational levels, mode of data,
processing, system objectives and type of support provided.
Following are the TYPE of information system:
1. Transaction Processing Systems

A transaction encompasses all of the purchases and sales of products and services,
along with any daily business transactions or activities required to operate a
company.

Quantities and the types of transactions performed vary, depending on the

industry and size/scope of the company. Examples of typical transactions include
billing clients, bank deposits, new hire data, inventory counts, or a record of
client-customer relationship management data.

A transaction processing system ensures that all of the contractual, transactional,

and customer relationship data is stored in a safe location and accessible to
everyone who needs it. It also assists in the processing of sales order entries,
payroll, shipping, sales management, or other routine transactions needed to
maintain operations. By utilizing a TPS, organizations can have a high level of
reliability and accuracy.

2. Management Information Systems

A management information system uses various transaction data from a TPS to
help middle management optimize planning and decision-making.
It retrieves TPS information, aggregates it, and generates reports to help those at
the management level know important details of a situation. Summaries and
comparisons are utilized to allow senior managers to optimize the decision
making process to achieve better results. Most of the report formats encompass
summaries of annual sales data, performance data, or historical records. This
provides a secure and systemized way for managers to meet their targets and
oversee business units.
3. Decision Support Systems
A decision support system processes data to assist in management decision-
making. It stores and gathers the information required for management to take
the proper actions at the correct time. For example, a bank manager can use a
DSS to assess the evolving loan trends to determine which yearly loan targets to
meet.

Decision models are programmed into the IS to analyse and summarize large
quantities of information and put it into a visual that makes it understandable.

Because a DSS is interactive, management can easily add or delete data and ask
important questions. This provides the evidence required for mid-management to
make the right choices that will ensure the company meets its targets.

4. Executive Support System

Executive support systems are similar to a DSS but are primarily used by
executive leaders and owners to optimize decision-making. An expert system
helps enterprise leaders find answers to non-routine questions so they can make
choices that improve the company's outlook and performance. Unlike a DSS, an
executive support system provides better telecommunication functionality and a
bigger computing functionality. Graphics software is integrated within an ESS
to display data about tax regulations, new competitive start-ups, internal
compliance issues, and other relevant executive information. This allows leaders
to track internal performance, monitor the competition, and pinpoint growth
opportunities.

Objectives of MIS/Functions of MIS:

The goals of an MIS are to implement the organizational structure and dynamics
of the enterprise for the purpose of managing the organization in a better way
and capturing the potential of the information system for competitive advantage.
Following are the basic objectives of an MIS −
1) Data Capturing:
MIS captures data from various internal and external sources of an organization.
Data capturing may be manual or through computer terminals. End users,
typically record data about transactions on some physical medium such as paper
form or enter it directly into a computer system.

2) Processing of data:
The captured data is processed to convert it into the required management
information. Processing of data is done by such activities as calculating,
comparing, sorting, classifying and summarizing.
3) Storage of information:
MIS stores processed or unprocessed data for future use. If any information is not
immediately required, it is saved as an organizational record. In this activity, data
and information are retained in an organized manner for later use. Stored data is
commonly organized into fields, records, files and databases.

4) Retrieval of information:
MIS retrieves information from its stores as and when required by various users.
As per the requirements of the management users, the retrieved information is
either disseminated as such or it is processed again to meet the exact demands.

5) Dissemination of MI:
Management information, which is a finished product of MIS, is disseminated to
the users in the organization. It could be periodic, through reports or on-line
through computer terminals.

The need for MIS

The following are some of the justifications for having a MIS system:

• Decision makers need information to make effective

decisions. Management Information Systems (MIS) make this possible.
• MIS systems facilitate communication within and outside the
organization – employees within the organization are able to easily access
the required information for the day to day operations. Facilitates such as
Short Message Service (SMS) & Email make it possible to communicate
with customers and suppliers from within the MIS system that an
organization is using.
• Record keeping – management information systems record all business
transactions of an organization and provide a reference point for the
transactions.

Components/Resources of MIS
The major components of a typical MIS long-form (Management Information
System) are:

• People – people who use the information system

• Data – the data that the information system records
• Business Procedures – procedures put in place on how to record, store and
analyze data
 • Hardware – these include servers, workstations, networking equipment,
printers, etc.
• Software – these are programs used to handle the data. These include
programs such as spreadsheet programs, database software, etc.

Resources of Information System

There are 5 resources of information system which are given below:

1. Hardware:
The system components which can physically touch – the system unit
(tower, desktop, laptop), internal devices and peripheral devices
(keyboards and monitors) – are called hardware and it is important to
remember that basic definition: The hardware are the parts of the computer
that are tangible and can be touched.
2. Software:
We know that, the hardware needs to know what to do, and that is the role
of software. The software may be divided into two types: first system
software and second application software. Primary piece of system
software is the operating system, such as Windows or iOS, which manages
the hardware’s operation. Application software is perform for specific
tasks, such as handling a spreadsheet, creating a document, or designing a
Web page.
3. People:
The human element is the most important component of information
system and the people that are needed to run the system and the procedures
they follow so that the knowledge in the huge databases and data
warehouses can be turned into learning that can interpret what has
happened in the past and guide future action.
4. Data:
Data is one of the most important component which is generally store in
form of information in a database system and a database is a place where
data is collected and from which it can be retrieved by querying it using
one or more specific criteria. All types of data store in warehouse without
knowing whatever form that an organization needs. The databases and data
warehouses have assumed even greater importance in information systems
with the emergence of “big data, ” a term for the truly massive amounts of
data that can be collected and analyzed.
5. Network:
The network is defined as a system in which more than the system is
connected through a transmission media. It provides an interface to receive
a piece of information or send an information. It is also one of the best
resources in the information system.
Advantages and Disadvantages of a computerized information system (MIS)
The following are some of the disadvantages of a computerized information
system.

Advantages:

The following are the advantages of computerized information systems

• Fast data processing and information retrieval – this is one of the

biggest advantages of a computerized information system. It processes data
and retrieves information at a faster rate. This leads to improved
client/customer service
• Improved data accuracy – easy to implement data validation and
verification checks in a computerized system compared to a manual
system.
• Improved security – in addition to restricting access to the database
server, the computerized information system can implement other security
controls such as user’s authentication, biometric authentication systems,
access rights control, etc.
• Reduced data duplication – database systems are designed in such a way
that minimized duplication of data. This means updating data in one
department automatically makes it available to the other departments
• Improved backup systems – with modern day technology, backups can
be stored in the cloud which makes it easy to recover the data if something
happened to the hardware and software used to store the data
• Easy access to information – most business executives need to travel and
still be able to make a decision based on the information. The web
and Mobile technologies make accessing data from anywhere possible.

Disadvantages:

• It is expensive to set up and configure – the organization has to buy

hardware and the required software to run the information system. In
addition to that, business procedures will need to be revised, and the staff
will need to be trained on how to use the computerized information system.
• Heavy reliance on technology – if something happens to the hardware or
software that makes it stop functioning, then the information cannot be
accessed until the required hardware or software has been replaced.
• Risk of fraud – if proper controls and checks are not in place, an intruder
can post unauthorized transactions such as an invoice for goods that were
never delivered, etc.
 Dimensions of management information systems

Figure 1

The dimensions of information systems include organizations, management, and

information technology.

ORGANIZATION
Information systems are an integral part of organizations. Indeed, for some
companies, such as credit reporting firms, there would be no business without an
information system. The key elements of an organization are its people, structure,
business processes, politics, and culture.

Using information systems effectively requires an understanding of the

organization, management, and information technology shaping the systems.

Organizations have a structure that is composed of different levels and specialties.

Their structures reveal a clear-cut division of labour. Authority and responsibility
in a business firm are organized as a hierarchy, or a pyramid structure. The upper
levels of the hierarchy consist of managerial, professional, and technical
employees, whereas the lower levels consist of operational personnel.

Figure 2

Senior management makes long-range strategic decisions about products and

services as well as ensures financial performance of the firm. Middle
management carries out the programs and plans of senior management, and
operational management is responsible for monitoring the daily activities of the
business. Knowledge workers, such as engineers, scientists, or architects, design
products or services and create new knowledge for the firm, whereas data
workers, such as secretaries or clerks, assist with scheduling and communications
at all levels of the firm. Production or service workers actually produce the
product and deliver the service. (see Figure 2).

An organization coordinates work through its hierarchy and through its business
processes, which are logically related tasks and behaviours for accomplishing
work. Developing a new product, fulfilling an order, and hiring a new employee
are examples of business processes.

MANAGEMENT
Management’s job is to make sense out of the many situations faced by
organizations, make decisions, and formulate action plans to solve organizational
problems. Managers perceive business challenges in the environment; they set
the organizational strategy for responding to those challenges; and they allocate
the human and financial resources to coordinate the work and achieve success.
Throughout, they must exercise responsible leadership. The business information
systems described in this book reflect the hopes, dreams, and realities of real-
world managers. But managers must do more than manage what already exists.
They must also create new products and services and even re-create the
organization from time to time. A substantial part of management responsibility
is creative work driven by new knowledge and information. Information
technology can play a powerful role in helping managers design and deliver new
products and services and redirecting and redesigning their organizations.

TECHNOLOGY
Information technology (IT) infrastructure is a technology platform or foundation
on which a firm can build its information systems. IT infrastructure consists of:
Computer hardware: The physical equipment and computing devices used for
input, storage, processing, output, and telecommunications
Computer software: The detailed, pre-programmed instructions that control
and coordinate the computer hardware components
Data management software: The software governing the organization of data
on physical storage media
Networking and telecommunications technology: Hardware and software used
to link the various pieces of hardware and transfer data from one physical location
to another; a computer network links two or more computers together to share
data, such as files, images, sounds, video, or share resources, such as a printer.

The Internet is the world's largest and most widely used network. The Internet is
a global network that uses universal technology standards to connect many
private and public networks. The universal standards and technologies used in the
Internet are also used in systems and networks within the firm. Intranets are
internal corporate networks based on Internet technology, and extranets are
corporate networks extended to authorized users outside of the firm.
The World Wide Web is a service provided by the Internet that uses universally
accepted standards for storing, retrieving, formatting, and displaying information
in a page format on the Internet. Web pages contain text, graphics, animations,
sound, and video and are linked to other Web pages. The Web can serve as the
foundation for new kinds of information systems such as UPS's Web-based
package tracking system.