MANAGEMENT

INFORMATION
SYSTEM
CHAPTER - 3
Meaning of Information System
Information system, an integrated set of components for collecting, storing, and
processing data and for providing information, knowledge, and digital products. Business
firms and other organizations rely on information systems to carry out and manage their
operations, interact with their customers and suppliers, and compete in the market

“Information systems are interrelated components working together to collect, process,

store, and disseminate information to support decision making, coordination, control,
analysis, and visualization in an organization”.
Importance of Information System

1. Managing Business Data

2. Informing Business Decision

3. Analysing Business Trends

4. Examining Strategy and Scenarios

5. Business Operations Management

6. Company Record-Keeping
Components of Information System

1. People Resources

2. Hardware Resources

3. Software Resources

4. Data Resources

5. Network Communications

6. Processes
Types of Information System
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.

Office Automation Systems

An office automation system is a network of various tools, technologies, and people required to conduct clerical and
managerial tasks. Primarily, an office automation system assists in enhancing communication among different
departments so everyone can collaborate to complete a task.
Typical examples of functions performed by an OAS include printing documents, mailing paperwork, mailing,
maintaining a company calendar, and producing reports.
3. Knowledge Management Systems
A knowledge management system stores and extracts information to help users enhance their knowledge and optimize
collaboration efforts to complete tasks. Examples of documents found in a knowledge management system include employee
training materials, company policies, and procedures, or answers to customer questions.
A KMS is used by employees, customers, management, and other various stakeholders involved with the organization. It
ensures that technical abilities are integrated throughout the company while providing visuals to help employees make sense of
the data they see.

4. 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.
5. 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 analyze and summarize large quantities of information and put
it into a visual that makes it understandable.

6. 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.
Information Technology

Information technology (IT) is the use of any computers, storage, networking and other physical

devices, infrastructure and processes to create, process, store, secure and exchange all forms of electronic

data. Typically, IT is used in the context of business operations, as opposed to technology used for personal

or entertainment purposes. The commercial use of IT encompasses both computer technology and

telecommunications
Trends In Information Technology
1. Cloud Computing
2. Mobile Apps
3. Big Data Analytics
4. Automation
5. Artificial Intelligence
6. Smart Technology
7. Virtual Reality
8. Augmented Reality
9. Blockchain Data
10. Cyber Security
11. Smart Technology
12. Rise Of Chatbots
Management Information System
A management information system (MIS) is an information system used for decision-making, and for the

coordination, control, analysis, and visualization of information in an organization. The study of the

management information systems involves people, processes and technology in an organizational context.

In a corporate setting, the ultimate goal of the use of a management information system is to increase the

value and profits of the business. This is done by providing managers with timely and appropriate

information allowing them to make effective decisions within a shorter period of time.
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.
G.B. Davis

A Management Information System is an organized portfolio of formal systems for obtaining,

processing, and delivering information in support of the business operations and management of an
organization.
Zwass (1992)
Characteristics of MIS
1. System Approach
The information system follows a System’s approach. The system’s approach implies a holistic approach to the
study of system and its performance in the light for the objective for which it has been constituted.

2. Management Oriented
The top-down approach must be followed while designing the MIS. The top-down approach suggests that the
system development starts from the determination of management needs and overall business objectives. The MIS
development plan should be derived from the overall business plan. Management oriented characteristic of MIS
also implies that the management actively directs the system development efforts.

3. Need-Based
MIS design and development should be as per the information needs of managers at different levels, strategic
planning level, management control level and operational control level. In other words, MIS should cater to the
specific needs of managers in an organization’s hierarchy.
4. Exception Based
MIS should be developed on the exception-based reporting principle, which means an abnormal situation, i.e. the
maximum; minimum or expected values vary beyond tolerance limits. In such situations, there should be exception
reporting to the decision-maker at the required level.

5. Future Oriented
Besides exception-based reporting, MIS should also look at the future. In other words, MIS should not merely provide
past or historical information; rather it should provide information, on the basis of projections based on which actions
may be initiated.

6. Integrated
Integration is a necessary characteristic of a management information system. Integration is significant because of its
ability to produce more meaningful information.
7. Long Term Planning
MIS is developed over relatively long periods. Such a system does not develop overnight. A heavy element of
planning is involved. The MIS designer must have the future objectives and needs of the company in mind.

8. Sub-System Concept
The process of MIS development is quite complex and one is likely to lose insight frequently. Thus, the system,
though viewed as a single entity, must be broken down into digestible sub-systems which are more meaningful at the
planning stage.
Role of Management Information System
MIS Report
MIS Reports are reports required by the management to assess the performance of the
organization and allow for faster decision-making. An MIS report is used to highlight
the day to day business activities, which enables you to monitor your organization’s
progress.

These reports provide critical insights during decision making. It serves as a reference
point to monitor your business and communication. In this new era of emerging
technologies, management information systems have become a vital part of successfully
running a company.
How do MIS Reports Work ?

An Types of MIS reports is prepared periodically (which is either monthly or quarterly in most cases). These reports
are prepared by various departments in your organization and presented to the company’s management team.

MIS reports focusing on raw data, trends, patterns in that data, and comparisons with relevant past data. MIS
reports are also an effective tool for managers to track business operations across various departments.
Furthermore, they provide clarity and enhance communication. They also help the company managers and the
management team to make informed decisions, pinpoint and avoid problems, and capitalize on the current market
trends.

For Example, if a decision about a new product launch has to be made, the MIS report will have current market
trends and employee information. The data points in the MIS reports will help you make better decisions and
improve the company’s performance in both the short-term and long-term.
Types of MIS Report
Managing Data Resources
Data Resource Management, also known as data administration, deals with computer science and
information systems. Workers in this field help design, control, protect, store, administer and
organize saved data. Normally, this information is stored on databases with database management
systems or software. This data can be accessed by members of the organization with the right
clearance via their computers.

Data management is the practice of collecting, keeping, and using data securely, efficiently, and
cost-effectively. The goal of data management is to help people, organizations, and connected
things optimize the use of data within the bounds of policy and regulation, so that they can make
decisions and take actions that maximize the benefit to the organization.
Importance of Managing Data Resources
● Reduce data redundancy: In traditional file system independent data files include a lot of duplication data, the
same data were recorded and stored in several files. Data resource management removes this problem.
● Ensure data integration: Database management reduces the duplication of data and integrates data so that they
can be accessed by multiple programs and users.
● Reduce data dependent: In a file processing system, a major component of a system is dependent on one
another in significant ways.
● Ensure flexibility: Traditional file system cannot deliver reports or responds to unanticipated information
requirements in a timely fashion.
● Ensure security: Data resource management can increase integrate and security of the data store in a database.
● Ensure easy sharing, and availability of data: Through the help of data resources management the only body
can easily get his necessary data easily and share it with other properly
Enterprise Resource Planning
Enterprise resource planning (ERP) refers to a
type of software that organizations use to manage
day-to-day business activities such as accounting,
procurement, project management,
risk management and compliance, and
supply chain operations. A complete ERP suite
also includes enterprise performance management,
software that helps plan, budget, predict, and report
on an organization’s financial results.
Meaning
Enterprise Resource Planning and refers to software and systems used to plan and manage all the core supply chain,

manufacturing, services, financial and other processes of an organization. Enterprise Resource Planning software

can be used to automate and simplify individual activities across a business or organization, such as accounting and

procurement, project management, customer relationship management, risk management, compliance and supply

chain operations.

Individual ERP applications can offer software as a service (SaaS), while a complete suite of ERP applications

forms an ERP system that can be used to effectively communicate and bring together business processes to enable a

flow of data between the applications

 Brief History of ERP

• 1913: An engineer named Ford Whitman Harris developed the Economic Order Quantity (EOQ) model, a paper-

based manufacturing system for production scheduling.

• 1964: Toolmaker Black and Decker adopted the first Material Requirements Planning (MRP) solution that

combined EOQ with a mainframe computer.

• 1970s-1980s: Computer technologies evolved and concept software handled business activities outside of

manufacturing, including finance, human resources data, and customer relationship management (CRM).

• 1983: MRP II was developed and featured “modules” and integrated core manufacturing components, and

integrated manufacturing tasks into a common shared-data system.

Continued..
• 1990s-2000s: Gartner Group coins term “ERP” to differentiate from MRP-only systems. ERP systems expanded

to encompass business intelligence while handling other functions such as sales force automation (SFA),

marketing automation and eCommerce.

• 2000-2005: Cloud-based ERP software solutions arrive when ERP software makers create “Internet Enabled”

products, providing an alternative to traditional on-premise client-server models.

• Today: Software-as-a-Service (SaaS) and Anything-as-a-Service (XaaS) offer new delivery models for ERP.

Remote web-based access for cloud ERP solutions provide mobile solutions, security, and integration with the

changing industries and smart technologies, including integrations with the Internet of Things (IoT), Internet of

Everything (IoE), and even social media to provide comprehensive solutions for every industry.
Need for ERP

1. Business Integration and Improved Data Accuracy:

2. Planning and MIS:

3. Improved Efficiency and Productivity:

4. Establishment of Standardized Procedures:

5. Flexibility and technology:

Steps in ERP Implementation

1. Define Scope of Implementation and End Objectives

2. Select an ERP System.
3. Create the Project plan.
4. Define phases of Implementation.
5. Make urgent but achievable Schedule.
6. Make a Communication Plan.
7. Arrange mid-way Approvals.
8. Plan your Testing.
9. Migrate Business Data
10. Prepare for the change
11. Plan your Go-Live
12. Support and Maintenance
Challenges of ERP

1. Working out which processes need to be

integrated

2. Inadequate flexibility

3. Resistance to change

4. Not properly vetting vendors

5. Maintenance costs

6. Not understanding or using key features