Information Systems

Unit I
Introduction to MIS
 Information Systems
A set of interrelated components that collect (or
retrieve), process, store, and distribute
information to support decision making and
control in an organization.
 Definition of MIS
MIS can be defined as a system that

(a) provides information to support managerial functions like planning,

organizing, directing , controlling

(b) collects information in a systematic and a routine manner which is in

accordance with a well defined set of rules

(c) includes files, hardware, software and operations research models of

processing, storing, retrieving and transmitting information to the users.
 Concept of MIS
Management is a process of achieving an organization’s goals and objectives
by making the fullest use of available resources like men, materials, machines,
money, methods etc.

The various functions of management are briefly defined as follows :

(a)Planning : It is the process of deciding in advance the courses of action to be
followed, when and also, how to undertake these actions.
(b)Organising : It refers to the grouping of people and activities in order to
facilitate the achievement of the organizational objective.
(c)Controlling : Control is the mode of checking the progress of plans and also,
correcting any deviations that may occur along the way.
(d)Directing : It is the process of activating the plans, structure and group
efforts in the desired direction. It is needed for implementation of plans by
providing the desired leadership, motivation and proper communication.
(e) Staffing : It is a process of putting the right person at the right job. It includes
activities like defining staff requirements, selecting suitable staff, training and
developing them etc.
Data Processing
Logic Information
Decision making process
Data
Computers
decisions

Data Decision Implementation

Human Beings

Data
Database Performance

MIS
Feedback / Control

Concept of MIS
Management Hierarchy

Management can be grouped into three hierarchical levels –

top, middle and junior management levels.

Strategic management establishes the policies, plans and objectives of the

organization as well as a budget framework under which various departments will
operate.

Tactical management has the responsibility of implementing the policy and overall
plans of the top management.

Operational management has the responsibility of implementing day-to-day

operations and decisions of the middle management to produce goods and services
to meet the revenue, profit and other goals, which in turn will enable the
organization to achieve its overall plans and objectives.
Each organisation is made up of several levels.
These could be classified broadly into three categories :
top, middle and junior management levels.

The top management performs strategic planning and the other two levels provide
support in the form of processed information.
The middle management level performs tactical planning and control, and needs
information to discharge these managerial functions.
The junior level is involved in day-to-day operational control and needs information for
its working.

(a)Strategic Planning : This level develops the strategy for deciding the objectives of the
organization, planning resources to be used in order to attain those objectives,
formulating policies to govern, use and disposition of the resources

(b)Management Control : It is required by managers of various departments to measure

performance, decide on control actions, formulate new decision rules and also allocate
resources.

(c)Operational control : It is the process of ensuring that operational activities are carried
out to achieve optimum use of resources. It makes use of pre-established procedures and
decision rules.
Top

Strategic
Planning

Middle Management Control

Junior
Operational Control

Levels of Management
Information is considered as a valuable resource required by the management
in order to run a business organization. Information is data that is processed and
presented in a form which assists decision makers.

The relation of data to information is that of raw material to finished product is

depicted as follows :

Data Processing Information

Information for one person may be data for another. For eg. Withdrawal slip may be
information for the cashier of a bank but raw data for the branch manager.

The role of data and information may change over a perid of time. Information
today may be data after some period of time.
 Data Information
When data is processed,
Data is raw, unorganized facts
organized, structured or
that need to be processed. Data
presented in a given
Meaning can be something simple and
context so as to make it
seemingly random and useless
useful, it is called
until it is organized.
Information.
The class' average score
or the school's average
Each student's test score is one
Example score is the information
piece of data
that can be concluded
from the given data.

Latin 'datum' meaning "that

which is given". Data was the
plural form of datum singular Information is interpreted
Definition
(M150 adopts the general use of data.
data as singular. Not everyone
agrees.)
System may be defined as a set of elements which are joined together to achieve a
common objective. It is composed of subsystems which in turn are made up of
other subsystems.

The elements of a system may be understood as :

1. Input
2. Process
3. Output

When feedback and control elements are attached to any system to make it
self-regulating and self – monitoring it is known as a cybernetic system.

A system exists and functions in an environment . It is separated from its

environment by its boundary.

Input Processing Output

Environment

Feedback / Control
Boundary
 MIS Characteristics
System Approach
Systems approach means taking a comprehensive view or a complete look at
the interlocking sub – systems that operate within an organization.
Management Oriented
Because of management orientation of MIS, it is necessary that management
should actively direct the system development efforts. In order to ensure the
effectiveness of system designed, management should continuously make reviews
Need Based
MIS should cater to the specific needs of managers in an organization’s
hierarchy.
Exception Based
MIS should be developed on the exception based reporting principle which
means an abnormal situation, i.e. the maximum, the minimum or expected values
vary beyond tolerance level.
Future Oriented
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.
Integrated
 Integrated
The word 'integration' means that the system has to cover all the
functional areas of an organization so as to produce more meaningful
management information, with a view to achieving the objectives of the
organization.
It has to consider various sub systems, their objectives, information needs,
and recognize the interdependence, that these sub-systems have amongst
themselves, so that common areas of information are identified and
processed without repetition and overlapping.
For example, in the development of an effective production scheduling
system, a proper balance amongst the following factors is desired :
•set up costs
•manpower
•over time
•production capacity
•inventory level
•money available
•customer service etc.
Common data flows
Because of the integration concept of MIS, common data flow concept avoids
repetition and overlapping in data collection and storage, combining similar
functions, and simplifying operations wherever possible.

Heavy planning element

A management information system cannot be established overnight. It takes
almost 2 to 4 years to establish it successfully in an organization. Hence, long-term
planning is required for MIS development in order to fulfill the future needs and
objectives of the organization. The designer of an information system should
therefore ensure that it will not become obsolete before it actually gets into
operation.

Flexibility and ease of use

While building an MIS system all types of possible means which may occur in
future are added to make it flexible. A feature that often goes with flexibility is the
ease of use. The MIS should be able to incorporate all those features that make it
readily accessible to a wide range of users with easy usability.
 MIS Functions
Data Capturing
MIS captures data from various internal and external sources of an
organization. End users may record data about transactions manually or through
the computer.
Processing of Data
The captured data is processed to convert it into the required management
information. Processing is done through activities like calculating, comparing,
sorting, classifying and summarizing. These activities organize, analyze 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. Stored data is
commonly organized into fields, records, files and databases.
Retrieval of Information
MIS retrieves information from its stores as and when required by various
users. The retrieved information is either disseminated as such or it is processed
again to meet the exact MI demands.
Dissemination of Information
Information may be disseminated to the users in the organization periodically
through reports or online through computer terminals.
 User User
Source Source

Source

Data Capture Processing Dissemination User

Source
User
Source

Retrieval

Storage of
data

Functions of MIS
MIS as a tool for implementation of
management process
Data and Information required
The process of management requires a lot of data and information for execution of the
plan.

Requirement of Data & Information for management decisions

This requirement arises on account of the fact that in each step of management, a
variety of decisions are taken to correct the course of development.

The decisions or actions are prompted due to the feedback given by the control system
incorporated in the management system.

The control of overall performance is made possible by way of Budget Summarizes and
reports. The summary showing sales, costs, profit and return on investment throws light
on the direction the organization is moving to.
The exception reports identify the weaknesses in the system of management.

If effective management system is to be assured, it has to rest on business

information.
The management performance improves if the business risk and uncertainties are
handled effectively. If the information provided is adequate, one can deal with these
factors.

The information support improves the lack of knowledge, enriches experience and
improves analytical abilities leading to better business judgment.
So, if efficient information support is to be provided, it calls for a system with the goals
of generating management information.

A good MIS must furnish information to the managers to expand their knowledge
base. He must know the adverse trends in business, the shortfalls and failures in the
management process.
Questions :
1.Explain the concept of MIS
2. Draw a neat diagram to depict the concept of MIS.
3.Explain the concept of Information Systems.
4.Explain briefly the management hierarchy.
5.With a neat diagram explain the basic functions of management in an
organization.
6. Explain the basic functions of management in an organization.
7. Explain with an example the difference between data and
information.
8. What is a system? Explain the different elements/components of a
system.
9. With a neat diagram explain the elements of a system.
10.Explain the characteristics/features of MIS.
11.How does MIS serve as a tool for implementation of business
process?
 References
http://www.openlearningworld.com/books/Fundamentals%20of%20MIS/MANAGEMENT%20PR
OCESS/MIS%20-%20A%20Tool%20for%20Management%20Process.html