MANAGEMENT INFORMATION SYSTEMS

UNIT I:
Management Information: Meaning of Information Attributes of information
Information needs of managers Web databases Data warehousing
Knowledge management Information system for decision making.
UNIT II:
Types of information systems: Transaction processing systems Office
automation systems Decision support systems Executive support systems
Management information systems: Evolution of MIS Computers and MIS.
UNIT III:
System analysis System planning and the mutual investigation System
design The process and stages of system design - Input/Output forms
design File organization System implementation.
UNIT IV:
Management information needs and communication links for marketing
system, Production system, Accounting system, Manufacturing system,
Inventory control system and budgetary control system IS organization
Top managements responsibility Data processing groups responsibility.
UNIT V:
Development, maintenances of MIS Operation of manual information
system, Role of computer in MIS Database concepts, Expert systems
System audit.
Text books:
1. Effy oz, Management Information Systems, Second edition, Thomson
Learning Course Technology, 2002. 2. Jawadekar W.S, Management
Information Systems, Tata McGraw Hill Publishing Company Limited, 2002.
3. Kenneth.C Laudon and Jane P.Laudon, Management Information
Systems, Prentice Hall of India Ltd., 2002.

MIS Introduction:
To

the

managers,

Management

Information

System

is

an

implementation of the organizational systems and procedures. To a

programmer it is nothing but file structures and file processing.
However, it involves much more complexity.
The three components of MIS provide a more complete and focused
definition,
where System
suggests
integration
and
holistic
view, Information stands for processed data, and Management is the
ultimate user, the decision makers.
Management information system can thus be analyzed as follows:
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.
Thus MIS means a system for processing data in order to give proper
information to the management for performing its functions.
Definition
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.
Objectives 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:

Capturing Data: Capturing contextual data, or operational information

that will contribute in decision making from various internal and

external sources of organization.

Processing Data: The captured data is processed into information needed

for planning, organizing, coordinating, directing and controlling

functionalities at strategic, tactical and operational level. Processing
data means:
o making calculations with the data
o sorting data
o classifying data and
o

summarizing data

Information Storage: Information or processed data need to be stored for

future use.

Information

Retrieval: The

system should be able to retrieve this

information from the storage as and when required by various users.

Information Propagation: Information or the finished product of the MIS

should be circulated to its users periodically using the organizational

network.
Characteristics of MIS
Following are the characteristics of an MIS:

It should be based on a long-term planning.

It should provide a holistic view of the dynamics and the structure of

the organization.

It should work as a complete and comprehensive system covering all

interconnecting sub-systems within the organization.

It should be planned in a top-down way, as the decision makers or the

management should actively take part and provide clear direction at
the development stage of the MIS.

It should be based on need of strategic, operational and tactical

information of managers of an organization.

It should also take care of exceptional situations by reporting such

situations.

It should be able to make forecasts and estimates, and generate

advanced information, thus providing a competitive advantage.
Decision makers can take actions on the basis of such predictions.

It

should

create

linkage

between

all

sub-systems

within

the

organization, so that the decision makers can take the right decision
based on an integrated view.

It should allow easy flow of information through various sub-systems,

thus avoiding redundancy and duplicity of data. It should simplify the
operations with as much practicability as possible.

Although the MIS is an integrated, complete system, it should be made

in such a flexible way that it could be easily split into smaller subsystems as and when required.

A central database is the backbone of a well-built MIS.

Characteristics of Computerized MIS

Following are the characteristics of a well-designed computerized MIS:

It should be able to process data accurately and with high speed, using
various techniques like operations research, simulation, heuristics, etc.

It should be able to collect, organize, manipulate, and update large

amount of raw data of both related and unrelated nature, coming from
various internal and external sources at different periods of time.

It should provide real time information on ongoing events without any

delay.

It should support various output formats and follow latest rules and
regulations in practice.

It should provide organized and relevant information for all levels of

management: strategic, operational, and tactical.

It should aim at extreme flexibility in data storage and retrieval.

Nature and Scope of MIS

The following diagram shows the nature and scope of MIS:

Information

can be defined as meaningfully interpreted data. If we give you a

number 1-212-290-4700, it does not make any sense on its own. It is
just a raw data. However if we say Tel: +1-212-290-4700, it starts
making sense. It becomes a telephone number. If I gather some more
data and record it meaningfully like:
Address: 350 Fifth Avenue, 34th floor
New York, NY 10118-3299 USA
Tel: +1-212-290-4700
Fax: +1-212-736-1300

It becomes a very useful information - the address of New York office

of Human Rights Watch, a non-profit, non-governmental human rights
organization.
So, from a system analyst's point of view, information is a sequence of
symbols that can be construed to a useful message.

An Information System is a system that gathers data and disseminates

information with the sole purpose of providing information to its users.
The main object of an information system is to provide information to
its users. Information systems vary according to the type of users who
use the system.
A Management Information System is an information system that
evaluates, analyzes, and processes an organization's data to produce
meaningful and useful information based on which the management can
take right decisions to ensure future growth of the organization.
Information Vs Data
Data can be described as unprocessed facts and figures. Plain
collected data as raw facts cannot help in decision-making. However,
data is the raw material that is organized, structured, and interpreted
to create useful information systems.
Data is defined as 'groups of non-random symbols in the form of text,
images, voice representing quantities, action and objects'.
Information is interpreted data; created from organized, structured,
and processed data in a particular context.
According to Davis and Olson:
"Information is a data that has been processed into a form that is
meaningful to recipient and is of real or perceived value in the current
or the prospective action or decision of recipient."

Classification of Information

Information can be classified in a number of ways, we will learn two of the

most important ways to classify information.
Classification by Characteristic
Based on Anthony's classification of Management, information used in
business for decision-making is generally categorized into three types:

Strategic Information: Strategic information is concerned with long term

policy decisions that defines the objectives of a business and checks

how well these objectives are met. For example, acquiring a new plant,
a new product, diversification of business etc, comes under strategic
information.

Tactical Information: Tactical information is concerned with the information

needed for exercising control over business resources, like budgeting,

quality control, service level, inventory level, productivity level etc.

Operational

Information: Operational

information

is

concerned

with

plant/business level information and is used to ensure proper

conduction of specific operational tasks as planned/intended. Various

operator specific, machine specific and shift specific jobs for quality
control checks comes under this category.
Classification by Application
In terms of applications, information can be categorized as:

Planning Information: These are the information needed for establishing

standard norms and specifications in an organization. This information

is used in strategic, tactical, and operation planning of any activity.
Examples of such information are time standards, design standards.

Control Information: This information is needed for establishing control

over all business activities through feedback mechanism. This

information is used for controlling attainment, nature and utilization of
important processes in a system. When such information reflects a
deviation from the established standards, the system should induce a
decision or an action leading to control.

Knowledge Information: Knowledge

is defined as "information about

information". Knowledge information is acquired through experience

and learning, and collected from archival data and research studies.

Organizational

Information: Organizational

information

deals

with

an

organization's environment, culture in the light of its objectives. Karl

Weick's Organizational Information Theory emphasizes that an
organization reduces its equivocality or uncertainty by collecting,
managing and using these information prudently. This information is
used by everybody in the organization; examples of such information
are employee and payroll information.

Functional/Operational Information: This is operation specific information. For

example, daily schedules in a manufacturing plant that refers to the

detailed assignment of jobs to machines or machines to operators. In a
service oriented business, it would be the duty roster of various
personnel. This information is mostly internal to the organization.

Database Information: Database information construes large quantities of

information that has multiple usage and application. Such information

is stored, retrieved and managed to create databases. For example,
material specification or supplier information is stored for multiple
users.
Quality of Information

Information is a vital resource for the success of any organization.

Future of an organization lies in using and disseminating information
wisely. Good quality information placed in right context in right time
tells us about opportunities and problems well in advance.
Good quality information: Quality is a value that would vary according
to the users and uses of the information.
According to Wang and Strong, following are the dimensions or elements of
Information Quality:

Intrinsic: Accuracy, Objectivity, Believability, Reputation

Contextual: Relevancy, Value-Added, Timeliness, Completeness, Amount

of information

Representational: Interpretability, Format, Coherence, Compatibility

Accessibility: Accessibility, Access security

Various authors propose various lists of metrics for assessing the quality of
information. Let us generate a list of the most essential characteristic
features for information quality:

Reliability - It should be verifiable and dependable.

Timely - It must be current and it must reach the users well in time, so

that important decisions can be made in time.

Relevant - It should be current and valid information and it should

reduce uncertainties.

Accurate - It should be free of errors and mistakes, true, and not

deceptive.

Sufficient - It should be adequate in quantity, so that decisions can be

made on its basis.

Unambiguous - It should be expressed in clear terms. In other words, in

should be comprehensive.

Complete - It should meet all the needs in the current context.

Unbiased - It should be impartial, free from any bias. In other words, it

should have integrity.

Explicit - It should not need any further explanation.

Comparable - It should be of uniform collection, analysis, content, and

format.

Reproducible - It could be used by documented methods on the same

data set to achieve a consistent result.

Information Systems for Managers
Managers make decisions. Decision-making generally takes a four-fold path:

Understanding the need for decision or the opportunity,

Preparing alternative course of actions,

Evaluating all alternative course of actions,

Deciding the right path for implementation.

MIS is an information system that provides information in the form of

standardized reports and displays for the managers. MIS is a broad class of
information systems designed to provide information needed for effective
decision making.

Data and information created from an accounting information system and

the reports generated thereon are used to provide accurate, timely and
relevant information needed for effective decision making by managers.
Management information systems provide information
management decision making, with the following goals:

Pre-specified and preplanned reporting to managers.

Interactive and ad-hoc support for decision making.

Critical information for top management.

to

support

MIS is of vital importance to any organization, because:

It emphasizes on the management decision making, not only

processing of data generated by business operations.

It emphasizes on the systems framework that should be used for

organizing information systems applications.

MIS - Knowledge Management System

A knowledge management system is not radically different from all
these information systems, but it just extends the already existing
systems by assimilating more information.
As we have seen, data is raw facts, information is processed and/or
interpreted data, and knowledge is personalized information.
What is Knowledge?

expertise

Personalized information
State of knowing and

A process of applying

A condition of access to
information

understanding

An object to be stored and

manipulated

Potential to influence action

Sources of Knowledge of an
Organization

Intranet

Decision support tools

Groupware for supporting

collaboration

Networks of knowledge
workers

Data warehouses and

knowledge repositories

Internal expertise

Definition of KMS
A knowledge management system comprises a range of practices used
in an organization to identify, create, represent, distribute, and enable
adoption to insight and experience. Such insights and experience
comprise knowledge, either embodied in individual or embedded in
organizational processes and practices.
Purpose of KMS

Improved performance

Competitive advantage

Innovation

Sharing of knowledge

Integration

Continuous improvement by:

o Driving strategy
o Starting new lines of business
o Solving problems faster
o Developing professional skills
o Recruit and retain talent

Activities in Knowledge Management

Start with the business problem and the business value to be delivered
first.

Identify what kind of strategy to pursue to deliver this value and

address the KM problem.

Think about the system required from a people and process point of
view.

Finally, think about what kind of technical infrastructure are required

to support the people and processes.

Implement system and processes with

management and iterative staged release.

Level of Knowledge Management

appropriate

change