MANAGEMENT INFORMATION SYSTEM

Simply MIS stands For Management Information System. For Simply Understanding Management
Information System (MIS) we can divide it into three Words and Understand Part by part
Management: “Management is a function to do the work at the Right time, by the right person,
For the Right Job.”
Information: “Information is the Collection of Organized data which plays a Vital Role in decision
making.”
System: “System Consist of a set of elements which Provides a Framework to convert
Unorganized (Data) into Organized Information.”
Definition: It refers to the processing of information through computers and other intelligent devices to
manage and support managerial decisions within an organization.
Management Information Systems (MIS) is the study of people, technology, organizations, and the
relationships among them. MIS professionals help firms realize maximum benefit from investment in
personnel, equipment, and business processes. MIS is a people-oriented field with an emphasis on service
through technology.
An automated system designed to provide progress and status information to management as an aid to
decision-making.
MIS stands for the management information system. Business managers at all levels of an organization,
from assistant managers to executives, rely on reports generated from these systems to help them
evaluate their business' daily activities or problems that arise, make decisions, and track progress.
Management Information System commonly referred to as MIS is a phrase consisting of three words:
management, information, and systems. Looking at these three words, it‘s easy to define Management
Information Systems as systems that provide information to management. That is the simple definition of
MIS that generally sums up what a Management Information System is, and what it should do. However,
its role and impact on the smooth operation of a company can never be overemphasized. That is the
reason why every successful company makes use of these systems in one way or another.
The reason why Management Information Systems are very important in the day-to-day operation of
companies is that these systems work with people, organizations, technology, and relationships among
the people and organizations affecting the company.

MIS Importance? /
Why is MIS required by a manager? /
How does a manager act as a control manager within an organization?
Management Information System is a formal method of collecting information in summarized form. It is
a network established within an organization to provide information to managers. It provides systematic
and analytical information necessary to all levels of managers. It helps managers to take the right decision
at the right time. The importance of MIS is described as follows;
1. Management Information System is always management-oriented and keeps in view every
level of management and gets the desired information.
2. Integrated – refers to how different components (sub-systems) are actually tied up together. eg:
different departments of the organization linked together.
3. Useful for planning – as every organization makes long-term and short-term plans with the help of
information like sales & production, capital investments, stocks, etc management can easily plan..
4. Effective Management Information System helps the management to know deviations of actual
performance from pre-set targets and control things.
5. It‘s important for increasing efficiency.
6. MIS provides updated results of various departments to manage.
7. MIS is highly computerized so it provides accurate results.
8. MIS adds to the intelligence, alertness, and awareness of managers by providing them with information
in the form of progress and review reports of ongoing activity.
9. Helps managers in decision-making.
To gain the maximum benefits from your company's information system, you have to exploit all its
capacities. Information systems gain their importance by processing the data from company inputs to
generate information that is useful for managing your operations. To increase the information system's
effectiveness, you can either add more data to make the information more accurate or use the information
in new ways.
Management Information Systems (MIS) not only include software systems but the entire set of business
processes and resources that are used to pull together information from functional or tactical systems.
Data is then presented in a user-friendly and timely manner so that mid and upper-level managers can
use it to take the right actions. The entire system is designed so that the company will meet its strategic
and tactical goals.

The need for MIS

The following are some of the justifications for having an MIS system.
1. Decision-makers need the information to make effective decisions. Management Information
Systems (MIS) make this possible.
2. MIS systems facilitate communication within and outside the organization – employees within the
organization are able to easily access the required information for 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.
3. Record keeping – management information systems record all business transactions of an
organization and provide a reference point for the transactions.

Benefits of MIS
An efficient Management Information System has many advantages. Some of them are given below:
1. Management Information System quickly provides all sorts of information required for decision-
making at different levels of management.
2. In the process of capturing data forms, one may find gaps, incomplete and incorrect data. The
same are likely to be rectified or completed or filled in the process.
3. Management Information System makes decision-making easy, accurate, and less risky.
4. Information flow from either direction is ensured and encouraged in the rank and file of managers.
5. Continuous monitoring and updating of information become imperative.
6. Greatly helps long-range planning with accurate forecasting trend analyses and preplanning
information in budget preparation. Even operations planning and tactical planning are provided
with information inputs by MIS. Plan modeling (consisting of premising, identification and
comparison of alternative courses of action) is greatly aided by MTS.
 7. MIS plays a crucial role in controlling managerial operations, monitoring performance and
decentralized decision-making through performance reports, break-even analysis, financial ratios,
etc. It calculates variations between budgeted and actual results, triggers revised forecasts and
acts as an early warning system for monitoring activities. In other words, MIS provides for control
of information that was not previously available and for information sharing across departments.
8. MIS helps in planning additional new facilities.
MIS increases productivity:
• MIS reduces time, errors and costs associated with processing information.
• To increase productivity, MIS follows Online Transaction Processing (OL TP). OLTP is the gathering
of data as input, processing that input data and updating the data to create valuable information
from this processed data.
• Another area in which modern MIS improves productivity is by allowing customers to process their
own transactions through the use of a Customer-Integrated System (CIS).
MIS enhances the quality of decision-making
• MIS helps top management to do business in a better way, find solutions to
problems/opportunities, or help them in decision-making by providing relevant information.
• MIS support for decision-making falls into two categories:
o When MIS helps you analyze a situation by providing all the relevant information about the
situation and then expecting you to make the decision.
o When MIS actually makes some sort of recommendation or gives some insight into what
decision to take.
MIS improves communication and helps develop teamwork
• MIS helps to manage information and facilitates communication between diverse teams.
• A collaborative management information system is a specific system to imprteamworkwork.
• One aspect of EDI is Electronic Funds Transfer (EFT) which allows for payment without physically
sending money.
MIS can facilitate organizational transformation
• MIS helps organizations to remain competitive or enter new markets and transform the way
business is done.

PROBLEMS AND PITFALLS IN DEVELOPING MIS

Enumerate the important problems in developing a MIS?
An effective MIS requires continuous, consistent, long-range planning with involvement and commitment
from the management as an institutionalized planning process involving everybody concerned. There is a
need for an information steering committee and it may take more than one iteration to establish the
process firmly. It has to undergo an application development cycle consisting of analysis, synthesis and
implementation phases. Systems feasibility (consisting of technical, economic and operational feasibilities)
is a most important starting point of MIS development. In other words, the development process should
take into account the rationale, definition and characteristics, economics, design, specification; schedule,
implementation plan, implementation status and review.
Some of the usual pitfalls and problems in developing and running an effective Information System are
mentioned below along with -some ways of increasing effectiveness:
1. Emphasis on Clerical System: Just taking over an existing clerical system and modifying it
without upgrading or changing it does not help. The clerical system has to be upgraded to a
 management system. On the other hand, computers have been put to work on those things that
are best understood and easily structured and which require little management involvement.
2. Communication gap between Computer technologists and managers/Users: Ensuring
maximum cooperation and coordination between computer personnel and managers is necessary.
A greater degree of interaction and involvement between the systems function and the
management function is required.
3. Lack of a Master Plan: A systematic long-range plan/planned approach is necessary for
establishing an effective Management Information System. Increased focus on the area of problem
definition is required in the systems analysis. The dramatic changes in business strategy together
with changes in the top management personnel and organization structure call for a thorough
plan.
4. Subordition of MIS Function to EDP Accounting System: Management Information
System's function should be made an independent function so that it reports directly to top
management.
5. Lack of Managerial Participation: This involvement and support of top management as well
as the participation of all managers in the design of their own management information system
are necessary. If top management tends to depend upon its informally designed private
information systems, the development of structured, formalized and public management
information systems becomes difficult. Many top managers wrongly feel that good strategic
decisions are made more by intuition than by a quantitative analysis of the available data.
6. Overlooking Human Acceptance: Users of the Management Information System should be
involved right at the early stages of design. Their cooperation by demonstrating how Management
Information Systems will positively affect their job is a must.
7. Lack of Resources and Trained Personnel: Lack of trained personnel consisting of system
analysts, system designers, programmers and chief information officers who are business trained
and/or have a basic business perspective is a handicap.
8. Voluminous and Unstructured Nature of Data: Sometimes the volume of data itself can be
a hurdle unless careful sifting is done. On the other hand, it may also be difficult to locate and
retrieve relevant data. Often, the data required by top management is unstructured, non-
programmed, and future-oriented. inexact and external and hence difficult to capture.
9. Limited Use of Management Science and or Techniques: Some of the ways of increasing
the effective of a Management Information System include motivating managers to participate and
get involved in Management Information System, establishing consistent performance and work
criteria for Management Information System, maintaining simplicity and ease of use, training
systems analysts and careful consideration of basic computer feasibility criteria like volume and
repetitive nature of transactions, degree of mathematical processing, quick turnaround time,
accuracy and validity of data, common source documents and well understood processing logic.
10. Enormous Time, Effort and Resources Required: MIS budget includes data processing costs,
hardware costs, personnel costs, supplies, services, etc

Explain the objectives of MIS?

SCOPE, OBJECTIVES AND PURPOSES
Objectives
Followings are the main objectives of a management information system,
1. Data Storage - it is important to store information or processed data for future use.
2. Data Retrieval - the data should be smoothly retrieved from storage devices whenever needed
by different users.
3. Data Propagation - data should be distributed periodically through the organizational network
to its users.
 4. A system of efficient and effective planning - MIS controls functions of management to
provide quick and timely information to the management. The process is very effective to make
decisions.
5. An MIS's goals are to incorporate the company's organizational structure and processes in order
to better control the enterprise and maximize the information system's potential for competitive
advantage.
6. Graphical reports - give an idea about the performance of different resources employed in the
organization.
7. Controlling the organization - MIS helps control the organization to provide the latest
information as well as historical data whenever required.
8. Standard and budgeted performance - Through matching actual performance with standard
and budgeted performance, MIS brings variances to management’s attention that can be resolved
by taking remedial action.
9. MIS provides the notification of the organization's management power to take advantage of
available opportunities.
10. MIS reports on re-production statistics which helps management people to take fruitful decisions.
The manager's decision-making plays the main role. It lets management people make decisions based on
the information that is being processed. Only input data change is an acceptable repeat to support various
forms of decision-making by managers. The automation capabilities of MIS can improve your company's
performance.
This means that MIS is the mechanism that offers the managers the required information as the
operational information source and prepares them for their decision-making. MIS is used by managers as
a tool to identify the issues facing them. MIS helps managers understand the issues and find solutions.
Management information systems, or MIS, are capable of gathering and storing data from different
departments, making valuable reports and presentations that can be used by you and your staff. Besides
collecting and processing information, MIS's goals include improving the performance of the company and
helping with decision-making.

Characteristics of Management Information System (MIS)

Explain the characteristics of an effective Management Information System?
The following are the key characteristics of MIS:
1. System approach: MIS follows the system approach, which implies a step-by-step approach to
the study of the system and its performance in the light of the objective for which it has been
constituted. It means taking an inclusive view of sub-systems to operate within an organization.
2. Management-oriented: The management-oriented characteristic of MIS implies that a top-
down approach needs to be followed for designing MIS. A top-down method says the initiation of
system development determines management requirements as well as business goals. MIS implies
the management dynamically to the system development towards the completion of management
decisions.
3. As per requirements: The design and development of MIS should be as per the information
required by the managers. The required design and development information is at different levels,
viz., strategic planning, management control, and operational control. It means MIS should cater
to the specific needs of managers in the hierarchy of an organization.
4. Future-oriented: The design and development of MIS should also be a future purpose so that
the system is not restricted to providing only past information.
5. Integrated: A complete MIS is a combination of its multiple sub-components to provide the
relevant information to take out a useful decision. An integrated system, which blends information
from several operational areas, is a necessary characteristic of MIS.
 6. Common data flows: This concept supports numerous basic views of system analysis such as
avoiding duplication, combining similar functions and simplifying operations. The expansion of
common data flow is a cost-effectively and logical concept.
7. Long-term planning: MIS should always develop as long-term planning because it involves
logical planning to get the success of an organization. While developing MIS, the analyst should
keep future-oriented analysis and the needs of the company in mind.
8. Relevant connection of sub-system planning: The MIS development should be decomposing
into its related sub-systems. These sub-systems must be meaningful with proper planning.
9. Central database: it contains data in tabular form. The database is responsible for operations
like insertion, deletion, and updation of records. This database covers information related to
inventory, personnel, vendors, customers, etc. the data stored in the database.

Functions of MIS
The main goal to set up an MIS in a company is to utilize the information of its managers for the managerial
purpose of decision-making. MIS performs the following functions to achieve the organizational goal:
1. To collect useful data: MIS executes the data through a computer system using the sources of
an organization. The organizational data is stored in a computer system or as a paper record by
its end users.
2. Data Processing: Processing data includes converting the storage data into the required
information to take beneficial actions. Data processing includes mathematical and logical
operations like, calculations, sorting, classifying and summarizing the data. The data processing
signifies processing activities as:
a. Organize data
b. Analysis of data
c. Apply statistical, and mathematical, operations
d. To create predictive modeling
e. Research and forecasting
3. Information storage and retrieval: MIS stores data as an organizational record and is
processed for future use. The data organizes as a fields, records, files and databases for future
use. Information retrieval comprises to access the stored data as per the requirements of the
management users.

4. Disseminating management information: information on the finished product is categorized

and dispersed to the users in an organization as per their needs. This information could be periodic,
 through reports, or online through computer terminals. The figure shows various functions
performed by MIS.

Role of Management Information System (MIS)

Management information system (MIS) has become Very Necessary due to the emergence of high
complexity in Business Organization. It is all to know that without information no Organization can take
even one step properly regarding the decision-making process. Because it is a matter of fact that in an
organization decision plays an essential role in the achievement of its objectives and we know that every
decision is based upon the information. If gathered information is irrelevant then a decision will also be
incorrect and Organization may face big losses & lots of Difficulties in Surviving as well.
Helps in Decision making: Management Information System (MIS) plays a significant Role in Decision
making Process of any Organization. Because in any organization decision is made on the basis of relevant
information and relevant information can only be Retrieved from the MIS.
Helps in Coordination among the Department: Management Information System also helps in
establishing a sound relationship with every person in the department to the department through the
proper exchange of information.
Helps in Finding out Problems: As we know that MIS provides relevant information about every aspect
of activities. Hence, If any mistake is made by the management then Management Information Systems
(MIS) Information helps in Finding out the Solution to that Problem.
Helps in Comparison of Business Performance: MIS stores all Past Data and information in its
Database. That is why a management information system is very useful to compare Business organization
Performance. With the help of the Management information system (MIS) Organization can analyze its
Performance means whatever they do last year or Previous Years and whatever business performance
this year and also measures the organization’s Development and Growth.

Components of MIS and Their Relationship

A management information system is made up of five major components namely people, business
processes, data, hardware, and software. All of these components must work together to achieve business
objects.
• People – these are the users who use the information system to record day-to-day business
transactions. The users are usually qualified professionals such as accountants, human resource
managers, etc. The ICT department usually has support staff who ensure that the system is
running properly.
Executives are the people who utilize MIS. These people are computer professionals who operate
MIS for data processing to achieve organizational goals like planning and decision-making.
• Business Procedures – these are agreed-upon best practices that guide the users and all other
components on how to work efficiently. Business procedures are developed by the people i.e.
users, consultants, etc.
Procedures are sets of rules or guidelines that an organization establishes for the use of a
computer-based information system. The procedures may vary from one organization to another.
It may also vary from one department to another as per the requirement. For example, the work
of the production department is different from the work of the sales department. The production
department requires information regarding the raw material or quantity of goods to be produced.
 So, the production department sets its procedures in such a way that the MIS system helps in
retrieving the information required by the department. In a similar way, the sales department
requires information regarding the number of goods sold and the other expenses that occurred
during the sales of the product. Therefore, the sales department sets the procedures in such a
way that they get only the information that is required from the MIS.
• Data – the recorded day-to-day business transactions. For a bank, data is collected from activities
such as deposits, withdrawals, etc.
This component is where the “material” that the other components work with resides. 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. A data warehouse contains all of the data in whatever form that an
organization needs. 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.
• Hardware – hardware is made up of computers, printers, networking devices, etc. The hardware
provides the computing power for processing data. It also provides networking and printing
capabilities. The hardware speeds up the processing of data into information.
This is the physical technology that works with information. Hardware can be as small as a
smartphone that fits in a pocket or as large as a supercomputer that fills a building. Hardware also
includes the peripheral devices that work with computers, such as keyboards, external disk drives,
and routers. With the rise of the Internet of Things, in which anything from home appliances to
cars to clothes will be able to receive and transmit data, sensors that interact with computers are
permeating the human environment.
• Software – these are programs that run on the hardware. The software is broken down into two
major categories namely system software and applications software. System software refers to
the operating system i.e. Windows, Mac OS, and Ubuntu, etc. Applications software refers to
specialized software for accomplishing business tasks such as a payroll program, banking system,
point of sale system, etc.
The hardware needs to know what to do, and that is the role of software. The software can be
divided into two types: system software and application software. The primary piece of system
software is the operating system, such as Windows or iOS, which manages the hardware’s
operation. Application software is designed for specific tasks, such as handling a spreadsheet,
creating a document, or designing a Web page.
Nature and Scope of MIS:
The concept of MIS is interdisciplinary in nature, i.e. it has borrowed its concepts from a large number of
disciplines like Accounting, Computers, Organizations, Management, Operations Research and Behavioral
Sciences, etc. MIS is neither a pure science nor an art; it is recognized as a combination of both. An
information system is a logical system, which is concerned with how ‘something is being accomplished
and thus may be differentiated from a physical system, which is the process itself and is concerned with
the content or ‗what‘ is going on. MIS, in fact, encompasses both physical and information systems. There
has been a lot of debate on the issue of whether MIS is more management–oriented or computer–
oriented. Though there are advocates of both sides, MIS should be considered more of a management
subject than computers because of the simple logic that computers are just tools in the hands of
managers. Computers are used for their characteristics like accuracy, speed, and capacity to handle large
amounts of data. Nowadays MIS finds application in all functional areas of every type of business
organization at all levels. MIS caters to the information needs of managers in an organization, thus its
scope lies in structured as well as unstructured types of information that could be gathered from internal
as well as external sources of the organization. Further, with the advent of communication technology,
the scope of MIS has increased manifold.

Information System
DEFINITION OF INFORMATION SYSTEM – ” An information system is a set of interrelated
components that work together to collect, process, store and break down the information to support
decision making. ”
Following are the DIMENSIONS of information system:
1. ORGANIZATIONAL DIMENSION: Information systems are part of the organization. The
information system will have the standard operating procedure and culture of an organization
embedded within them. This involves:
i. Functional specialties
ii. Business processes
iii. Culture
iv. Political interest groups
2. MANAGEMENT DIMENSION : Managers perceive business challenges in the environment.
Information systems supply tools and information needed by managers to allocate, coordinate and
monitor their work, make decision, create new products and services and make long range
strategic decisions.
3. TECHNOLOGY DIMENSION : Management uses technology to carry out their functions. It
consists of – computer hardware/software, data management technology, networking/telecom
technology.Its one of the many tools managers use to cope with the change.
Information Systems are classified by organisational levels, mode of data, processing, system objectives
and type of support provided.

Types of information systems:

1. Transaction Processing Systems (TPS)
2. Decision Support Systems (DSS)
3. Executive Information Systems (EIS)
4. Knowledge Management Systems (KMS)
5. Enterprise Resource Planning (ERP)