Chapter 3: Management Information Systems

MIS
MIS is a set of organized procedures which when executed provide information to support decision making. MIS is an integrated user-machine system for providing information to support operations, management and decision making functions in an organization.

Characteristics of MIS
Many ideas which are part of MIS are found in other academic disciplines. Four major areas are especially significant to MIS concept:
Managerial accounting Operations Research Organization Theory Computer science

Managerial accounting
Field of accounting having two major ares: financial and managerial. Financial: measurement of income for specific period of time as month or year (income statement) and reporting of financial status at the end (balance sheet). Managerial: Determining relevant costs and performing other analysis useful for managerial control & decisions. Focus on preparation of budgets & performance analysis based on budgets. MIS provides data & model support.

Operations Research
Operations Research is the application of scientific method and quantitative analysis techniques to management problems. Systematic approaches to business problem solving. Use of mathematical models & procedures in analysis. It has developed procedures for analysis and computer based solutions of decision problems.

Organization theory
MIS a support system for organizational functions. It draws upon concepts of organization, organization behavior, management and decision making.

Computer science
Computer science is important to MIS as it covers algorithms, computation, software etc. But main field of MIS is not an extension of computer science; it is an extension of management and organizational theory. The emphasis in MIS is on the application of technical capabilities computer science has provided.

Subsytems of an MIS
Two approaches to defining subsystems of an MIS are:
According to organizational functions which they support. According to managerial activities for which they are used.

Sub-systems of MIS according to organizational functions

Major functional subsystems Marketing Manufacturing Logistics Some typical uses of MIS Sales forecasting, Sales Planning, Customer and sales analysis Production planning and scheduling, cost control analysis Planning and control of purchasing inventories, distribution

Personnel

Planning personnel requirements, analyzing performance,salary administration

Financial analysis,cost analysis, capital requirements planning. Income measurement. Information system planning, costeffectiveness analysis. Strategic planning, Resource allocation

Finance and accounting

Information processing Top management

Use of MIS in marketing

Marketing:-Use of MIS

Use of MIS in Production

Products ready due to use of MIS in Production

Use of MIS in Logistics (Inventory planning)

Use of MIS in Personnel

Salary analysis required for HR

Use of MIS in Finance

Subsystems of MIS according to managerial activities for which they are used.
Activity subsystems Some typical uses of MIS

Transaction processing
Operational control Management control

Processing of orders, shipments and receipts

Scheduling of activities and performance reports Formulation of budgets & resource allocation

Strategic planning

Formulation of objectives and strategic plans

Use of MIS in Transaction processing

Use of MIS in Operational control

Use of MIS on Management control eg. Resource allocation

Marketing

Productio n

Logistics

Personnel

Finance

IP

Top management

Strategic

Management control Operational control

Transaction processing

Database Management System