Management Information

Systems (MIS) – IT402

H K Chikunya
Cell: 0779527148
Email: harris.chikunya@cuz.ac.zw
Objectives of MIS
 Effictively manage, store, retrieve and secure data
related to the organization’s operations
 Operational efficiency
 Providing Managers With Accurate Information
 Connecting Data to Strategy
 Gaining a Competitive Advantage
 Alignment of IT with business strategy
Management
 Management covers the planning, control,
leading 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.
 Overally, they all have to lead their
subordinates
 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.
Data– Information Scenario
Raw data from a
supermarket checkout
counter can be processed
and organized to produce
meaningful information,
such as the total unit sales
of dish detergent or the
total sales revenue from
Extract: From Laudon & Laudon (12th Edition) dish detergent for a
specific store or sales
territory.
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.
 System is an interrelated set of components, with
identifiable boundary, working together for some
purpose.
 A collection of components that work together to realize
some objectives forms a system.
 Thus MIS means a system for processing data in order
to give proper information to the management for
performing its functions.
 System characteristics
 A component - an irreducible part or aggregation of parts that
make up a system, also called a subsystem
 Interrelated components - Dependence of one subsystem on one
or more subsystems
 Boundary - line that marks the inside & outside of a system: it
sets off the system from its environment
 Purpose - The overall goal or function of a system
 Environment - Everything external to a system that interacts with
the system
 Interface - Point of contact where a system meets its environment
or where subsystems meet each other.
Types of Systems
 Open system
 A system that interacts freely with its environment,
taking input and returning output
 Closed system
 A system that is cut off from its environment and
does not interact with it
 Closed systems can hamper growth since the flow of
information stays within the system and has no
chance to interact with or build on knowledge from
the outer environment.
Information System - IS
 Information systems (IS) are interrelated components
working together to collect, process, store, and
disseminate information to support decision making,
coordination, control, analysis and visualization in an
organisation.
 Information systems are combinations of hardware,
software and telecommunications networks that people
build and use to collect, create and distribute useful data,
typically in organisational settings.
 Information systems is the study of complementary
networks of hardware and software that people and
organizations use to collect, filter, process, create and
distribute data
Management Information Systems - MIS
 According to G.B. Davis, “MIS is a man or machine that provide
information to support management in decision making process
 It is the system through which information is communicated to
the management
 MIS enhances the quality of management and growth of the
organisation by providing timely, accurate and meaningful
information for planning, organisation and control.
 No management can ever succeed without continuous appraisal
of its performance and MIS by providing timely and meaningful
information can be helpful in this regard
 The management needs full information before taking any
decision.
 Good decisions can minimize costs and optimize results.
 Management information system can be helpful to the
management in undertaking management decisions smoothly
and effectively.
Functions of MIS
 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 a paper form, or enter it directly into a computer
system.
 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.
These activities organize, analyse, and manipulate data using various
statistical, mathematical, operations research and other business models.
 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.
 Retrieval of Information: MIS retrieves information fro its stores as and when
required by various users. As per the requirements of management users, the
retrieved information is either disseminated as such or it is processed again to
meet the exact MI demands.
 Dissemination of MI: Management Information, which is a finished product of
MIS, is disseminated to the users in the organization.
 Characteristics of MIS
 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.
 Management Oriented: This is an important characteristic of MIS.
For designing of MIS, top-down approach should be followed.
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.
 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.
Ctd’
 Integrated: Integration is a necessary characteristic of a
management information system. Integration is significant because
of its ability to produce more meaningful information. For example,
in order to develop an effective production scheduling system, it is
necessary to balance such factors as:
 Set-up costs,
 Work force
 Overtime rates
 Production capacity
 Inventory level
 Capital requirements
 Customer services
 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.
 Ctd’
 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.
 Long Term Planning: MIS is developed over relatively long periods. Such
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.
 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.
 Central Database: A central database is the mortar that holds the
functional systems together. Each system requires access to the master
file of data covering inventory, personnel, vendors, customers, etc. If the
data is stored efficiently and common usage in mind, one master file
Can provide the data needed by any of the functional systems. It seems
logical to gather data once, to properly validate it and to place it on a
central storage medium, that Can BE accessed by any other sub system.
IS and the future
 A combination of information technology
innovations and a changing domestic and
global business environment makes the role
of IT in business even more important for
managers than just a few years ago.
 The Internet revolution is not something that

happened and then burst, but instead has

turned out to be an ongoing, powerful source
of new technologies with significant business
implications for much of this century.
Question???
 Research on Artificial Intelligence (AI), Internet of Things (IoT) and
Augmented Reality (AR) and clearly state how they impact on the
future of MIS.
Growth of IS
 There are five factors to consider when assessing
the growing impact of IS in business firms both
today and over the next ten years.
 Internet growth and technology convergence

 Transformation of the business enterprise

 Growth of a globally connected economy

 Growth of knowledge and information-based

economies
 Emergence of the digital firm
Components of Information Systems

a) Resources of people: (end users and IS specialists,

system analyst, programmers, data administrators
etc.).
b) Hardware: (Physical computer equipment and
associate device, machines and media).
c) Software: (programs and procedures).
d) Data: (data and knowledge bases), and
e) Networks: (communications media and network
support).
i. People Resources
 End users: (also called users or clients) are people who
use an information system or the information it
produces. They can be accountants, salespersons,
engineers, clerks, customers or managers. Most of us
are information system end users.
 IS Specialists: people who actually develop and operate
information systems. They include systems analysts,
programmers, testers, computer operators, and other
managerial, technical, and clerical IS personnel. Briefly,
systems analysts design information systems based on
the information requirements of end uses, programmers
prepare computer programs based on the specifications
of systems analysts, and computer operators operate
large computer systems.
ii. Hardware Resources
 Machines: as computers and other
equipment along with all data media, objects
on which data is recorded and saved.
 Computer systems: consist of variety of
interconnected peripheral devices. Examples
are microcomputer systems, midrange
computer systems, and large computer
systems.
iii. Software Resources
 Software Resources includes all sets of information
processing instructions. This generic concept of software
includes not only the programs, which direct and control
computers but also the sets of information processing
(procedures). Software Resources includes:
a. System software, such as an operating system
b. Application software, which are programs that direct
processing for a particular use of computers by end
users.
c. Procedures, which are operating instructions for the
people, who will use an information system.
Examples are instructions for filling out a paper form
or using a particular software package.
 iv. Data Resources

 Data resources include data (which is raw material of information

systems) and database.
 Data resources must meet the following criteria:
i. Comprehensiveness: all data about the subject are actually present in
the database.
ii. Non-redundancy: each individual piece of data exists only once in the
database.
iii. Appropriate structure: means that the data are stored in such a way as
to minimize the cost of expected processing and storage.
 The data resources of IS are typically organized into:
o Processed and organized data-Databases.
o Knowledge in a variety of forms such as facts, rules, and case examples about
successful business practices.
 v. Network Resources
 Telecommunications networks like the Internet,
intranets, and extranets have become essential to the
successful operations of all types of organizations and
their computer-based information systems.
 Telecommunications networks consist of computers,
communications processors, and other devices
interconnected by communications media and
controlled by communications software.
 The concept of Network Resources emphasizes that
communications networks are a fundamental resource
component of all information systems.
Components of an IS
IS production process
 The factor affecting the value of information
in organization
A - Technological Factors
In technological dimension, three variables are suggested:
system quality, information quality, and service
quality.
• System quality is the desirable characteristics of information
system. For example: ease of use, system flexibility, system
reliability, and ease of learning, as well as system features of
intuitiveness, sophistication, flexibility, and response times
• Information quality is the desirable characteristics of the system
outputs. For example: relevance, understandability, accuracy,
conciseness, completeness, understandability, currency,
timeliness, and usability.
• Service quality is the quality of the support that system users
receive from the IS department and IT support personnel. For
example: responsiveness, accuracy, reliability, technical
competence, and empathy of the personnel staff.
B - Organizational Factors
 In organizational dimension, two variables are suggested: top
management support, and end-user training.
 Management support refers to the perceived level of general
support offered by top management in small firms.
 Example: management is aware of the benefits that can be
achieved with the use of system, management always supports
and encourages the use of system for job-related work,
management provides most of the necessary help and resources
to enable people to use system, management is really keen to see
that people are happy with using system, management provides
good access to hardware resources when people need them, and
management provides good access to various types of software
when people need them
 user training refers to the amount of training provided by
computer specialists in the company, friends, consultants or
educational institutions external to the company.
 Example training to use Operation systems, Spreadsheets, Word
processing, application packages.
C - People Factors
 In people dimension, two variables are suggested: computer
self-efficacy, and user experience.
 Computer self-efficacy refers to an individual’s belief that
he or she has the skills and abilities to accomplish a specific
task successfully.
 Self-efficacy is measured using items such as: I can
understand how the system work, and I am confident that I
can learn how to use the system.
 Experience is prior knowledge gathered by an individual
with a specific technology.
 Experience is measured by using items such as: I have
experience in using the systems, I have experience in using
spreadsheet/word processing, I participated in feasibility
studies/requirements analysis, I have experience in using
financial modeling/programming languages, and I
participated in design of computerized information systems
Dimensions to Information Quality
 The multiple dimensions of information quality are:
i. Relevance
 The key component for information quality is whether the

information addresses its customer's needs.

 This does not mean that irrelevant information to an

information customer is of "poor quality".

 It just indicates that the information is a member of a
different information class much in the same way that a luxury
car and a sports car are both members of different classes of
automobiles.
 In some cases "poor quality" information may actually be quite

good; what is needed is to educate the information's customer

so they can understand it and use it.
ii. Accuracy
 Accurate information reflects the underlying reality.

 That quality information should be accurate seems obvious

iii. Timeliness
 Timely information is still current.
 Information timeliness goes hand in hand with information
accuracy. The concept of what is timely is itself constantly changing
and being redefined, due to changes in customer perceptions
caused by technology and the competitive environment..
iv. Completeness
- Incomplete information can lead its customer astray.
- Complete information for one person may be incomplete for
another. For example, the marketing vice president and the director
of research and development for a pharmaceutical company may be
both be interested in the clinical trials tests for a new drug, but each
may require different levels of detail.
v. Coherence
- Coherence is how well the information "hangs together" and it
consistent with itself.
- Information can become incoherent through irrelevant details,
confusing measures or ambiguous format which can confuse
information customers and cause them to not receive or even reject
the information's message.
vi. Accessibility
 Accessible information is information that can be obtained

when needed.
 Accessibility depends on the customer and even the specific

circumstances for that customer. For information quality to

occur, timeliness and accessibility should complement each
other.
 Timely information that is inaccessible or accessible information

that is obsolete, cannot satisfy an information customer's

needs.
vii. Compatibility
- Information quality lies not only in the quality of the information
itself, but also in how it can be combined with other information
and delivered to a customer. This often involves systems working
together.
- The proper information architecture enhances information

quality by making the information suitable for enhanced uses.

- A quality architecture implies a dynamic structure that can grow

with changing customer requirements.

Most types of MIS support business functions:

 Customer Relationship Management,

 Marketing Management Systems(target marketing
efforts are directed at specific groups of potential
customers or selling to niche markets),
 Financial Management, Strategic plan
development,
 Inventory management systems, Optimal
investing strategy creation, Projected sales
volume
Enterprise Resource Planning (ERP)
 ERP is an integrated, real-time, cross-functional
enterprise application, an enterprise-wide
transaction framework that supports all the
internal business processes of a company.
 It supports all core business processes such as

sales order processing, inventory management

and control, production and distribution planning,
and finance.
 ERP enables decision-makers to have an
enterprise-wide view of the information they need
in a timely, reliable and consistent fashion
 e.g. SAP, Navision, infor, proALPHA, BAAN.
Understanding ERP
 There are two flows across supply chain, one is
product flow, and the other is information flow.
 In the past, information system tended to be islands,
depending on their functions within the company.
 For instance, when orders came from customers, they
were processed and recorded by sales department, and
then the sales transferred the information to
manufacturing.
 After the production made the master schedule, the
logistics knew the distribution requirements and then
planned the delivery.
 Finally, the accounting was able to bill to customers.
 Under this business process, a lot of problems might
occur, like delay, lost order, input errors and long lead
time, which is illustrated by the following chart:
Order fulfillment before ERP
But…..
 Ideally, everyone should be able to access the same real
time data through some interface when they are needed
to.
 This requires a single-point-of-contact system.
 That is one of the original ideas of ERP.
 Based on the identical system and database, the
information flow and product flow can be processed
efficiently.
 To guarantee the effectiveness of ERP implementation, we
need to link all the functions of the chain seamlessly.
 As mention above, there are walls, barriers between
departments.
 So what we need to do is to smash the walls, to get
connected tightly via the system.
Order fulfillment after ERP
 Core Components of ERP
 ERP totally changed the old computer systems from
each separate department, and replaced them with a
single unified software program that can be divided
into software modules.
 ERP software has become flexible enough that you can
install only some modules without buying the whole
package.
 Many companies, for example, will install only part of
ERP modules, like finance, HR, Material Management or
Production Planning module and leave the rest of the
functions for the future.
 Features of ERP

– The following diagram illustrates the features of ERP:

Key Motivating Factors: For ERP
 Standardize supply chain practices across
multiple sites.
 Simplify the software environment by
replacing multiple, highly customized legacy
systems with a single “fleet” solution.
 Support corporate-level visibility and control
of key supply chain processes, such as
procurement and production scheduling.
Why of ERP?
ERP is very helpful in the following areas:
 Business integration and automated data update

 Linkage between all core business processes and easy flow of

integration
 Flexibility in business operations and more agility to the

company
 Better analysis and planning capabilities

 Critical decision-making

 Competitive advantage

 Use of latest technologies

 Benefits of ERP
 E-commerce is the most revolutionized way of selling products in a
relatively low cost.
 Imagine getting the e-commerce data directly from your ERP system
without any human interaction, it provides you numerous benefits.
 The following are some of the advantages:
 Increases Self- Service Functionality: – The availability of real-time data
from the ERP system on to the store front, allows customers to view
available inventory, latest order status, and track shipmentswith
tracking numbers. This helps in reducing your cost of operations and
improves customer experience with your store front.
 Reduce your inventory cost by having updated sales information: – All
web sales information will instantly appear into your ERP system. ERP
Item Inventory will also be updated based on these web transactions. So
with the most up to date web sales information and inventory, ERP user
can properly plan the purchase and thus reduces the inventory cost.
 Generate financial reports in ERP, based on Web Transactions: – e-
commerce applications are able to generate financial reports on sales.
But integration with ERP provides the merchant the ability to produce
Balance Sheet, P/L Statement, Trial Balance, Cash Flow, etc. which gives
the transparency in financial information across the organization.
 Benefits ctd….
 Increased internal productivity: – Because the integrated system
streamlines multiple business processes, it has reduced human resource
involvement in these processes. Web sales orders will be integrated to
the ERP system in real time, back office ERP user can instantly track the
order and start the further processing. Thus the order fulfillment cycle is
reduced through this integration.
 Reduced Human Involvement, Data Redundancy and Error: – With
integration, web customer details, web orders, payment & shipping
information will be integrated to ERP system, similarly Item and
Inventory details can be uploaded from ERP to e-commerce portal, so in
any way this integration will eliminate the need of reentering the data.
Thus the integration solution will reduce human involvement, data
redundancy and error over two platforms.
 Increase Customer Satisfaction: – Ease of getting most up to date
product information, inventory availability detail, order tracking detail,
etc in the web from ERP system, customer satisfaction level raises a lot
and it reduces operational hassle for the business.
 Better Control of your Business: –Integration of e-commerce and ERP
business processes provides the business owners with a better control of
their business and there by getting competitive advantage.
Advantages of ERP summary
 Reduction of lead time
 Reduction of cycle time
 Better customer satisfaction
 Increased flexibility, quality, and efficiency
 Improved information accuracy and decision
making capability
 Onetime shipment
 Improved resource utilization
 Improve supplier performance
 Reduced quality costs
 Quick decision-making
 Forecasting and optimization
 Better transparency
Challenges of ERP Implementation
 Customization Related Challenges
 Redesigning Business Processes
 Cost of upgrades/updates
 Training
 Little flexibility in adapting to business processes
 High integration costs
 High maintenance costs
 Lengthy or incomplete integrations
HOW TO IMPLEMENT ERP?
 Buy or Make ERP Software
In house development
Although make what you need provides
the ultimate in control, there are three
fatal limitations to use this as primary
strategy: investment, discipline and
support . Other concerns include:
·Time consuming
·Documentation is difficult
·Maintenance depends on individuals
·EDI modification to be taken of
·Each unit follows different software
option
·Latest developments to be studied before
implementation
ERP package
The attractions of buy option are well
documented by the solutions vendors.
The advantages include:
·Ready made projects
·Needs only customization
·Documentation is part of system
·Company takes care of
·EDI compatible
·The package itself is designed as
enterprise package
·Constant updates assured
Because, while we can do both, we really
need to be good at “assemble” if we’re to
own our own application and data
destinies .
Critical Success Factors of Implementing ERP
 Research on CRM, its advantages and disadvantages!
 Any Question(s)???