Management Information

System
BCA – Sem 5
UNIT - 1
What is MIS and Why MIS ?
› MIS – An acronym of Management Information System
› Can’t we do without MIS?
– Today’s Manager is confronted with TWO main challenges. He /
She has to :
› Take quick decisions
› Process a large voluminous information
What is Management ?
› Management is to get the work done through and with the
help of people, by performing basic functions of
management.
› In fact, 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.
› “Management is the art of getting things done through and
with the people in formally organized groups”
- Koontz, 1972
Key Aspects of Management
› Management is a process
› Managers achieve goals using resources
› Managers play many roles and engage in organizing,
making decisions, leading, and controlling
Basic Functions of Management
› Basic functions of managements are POSDC :
Planning
Organizing
Staffing
Directing
Controlling
Basic Functions of Management
› Basic functions of managements are POSDC :
Planning
The process of deciding in advance, the course of action to be
followed, when and also, how to undertake those actions. We can
say the planning as the decision making for the path for "From
where → to where we have to reach". The planning function should
answer some basic questions, such as :
– What to do?
– When to do?
– Who is it to do?
– How is it to be done?
– Where is it to be done?
– Why is it to be done?
Basic Functions of Management
› Basic functions of managements are POSDC :
Organizing
The grouping of people and activities in order to facilitate the achievement
of the organizational objective. The managers organize tasks by dividing
activities, assigning duties and delegating authority for effective operation
and achievement of goals.

Staffing
The process of putting right people, at right job, at the right time. The
activities like defining the requirements, selecting suitable executives are
done in this function.

Note: Staffing and Organizing are most often confused. Organizing involves foussing on
structure formation and process of allocation whereas, staffing relates to the selection of
people for that particular job and is executive oriented.
Basic Functions of Management
› Basic functions of managements are POSDC :
Directing
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.

Controlling
The mode of checking the progress of plans and also, correcting any
deviations that may occur along the way.
Management as a Control System
› POSDC steps prior to a control are necessary nut not
necessarily self assuring the results unless it is followed by
a strong control mechanism
› Control, is the process through which managers assure
that actual activities conform to the planned activities,
leading to the achievement of the stated common goals.
› The control process measures a progress towards those
goals, and enables the manager to detect, the deviations
from the original plan in time to take corrective actions
before it is too late.
Management as a Control System
Management as a Control System
› A reliable and effective control system has the following
features:
Early warning mechanism
This is a mechanism of predicting the possibility of achieving the
goals and standards before it is too late and allowing the manager to
take corrective actions.

Performance standard
The performance standard must be measurable and acceptable to
all the organizations. The system should have meaningful standards
relating to the work areas, responsibility, managerial functions and
so on.
Management as a Control System
› A reliable and effective control system has the following
features:
Strategic controls
In every business, there are strategic areas of control known as the
critical success factors. The system should recognize them and
have controls instituted on them.

Feedback
The control system would be effective, if it continuously monitors the
performance and sends the information to the control center for
action. It should not only highlight the progress but also the
deviations.
Management as a Control System
› A reliable and effective control system has the following
features:
Accurate and timely
The feedback should be accurate in terms of results and should be
communicated in time for corrective action.

Realistic
The system should be realistic so that the cost of control is far less
than the benefits. The standards are realistic and are believed as
achievable. Sufficient incentive and rewards are to be provided to
motivate the people.
Management as a Control System
› A reliable and effective control system has the following
features:
Information flow
The system should have the information flow aligned with the
organization structure and the decision makers should ensure that
the right people get the right information for action and decision
making.

Exception principle
The system should selectively approve some significant deviations
from the performance standards on the principle of management by
exception.
Levels of Management
Levels of Management
› Top Level - 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
› Middle Level - 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
› Lower/ Shop floor Level - Operational Control
It is the process of ensuring that operationalactivities are carried
out to achieve optimum use of resources. It makes use of pre-
establishedprocedures and decision rules.
Levels of Management
› The interaction between three levels of management, as
summarized by Jerome Kanter (1996)
Management as a Control System
› Essence of Management is:
Whatever a manager does, he/she does it through Decision
Making

“Decision making is an essence of management”

- Peter Drucker
“Management is imperfect without decision making”
- Hitesh Gupta
INFORMATION
› Information is a vital resource in development activities of
any business. All the economic and social progress
depends very significantly in the transfer of commercial,
scientific and technical information. Managers in different
situations require information on a subject in different forms
and with different emphasis.
PROPERTIES AND SCOPE OF
INFORMATION
› Information has following general properties:
– Information is not consumed in use. This is an extremely
important property of information.
– Information can be shared by many and can be used
simultaneously without any loss of any one.
› The scope of information may vary. It can be in detail or in
summary form. It can either be a complete set of data or
only specific exceptions. The information scope depends
on the managerial level. Information could be hard
objective,relying heavily on facts.
INFORMATION ECONOMICS
› Information is an available resource in any organization.
However the preparation of formal information is not free; it
costs money. How much should an organization spend for
information? Some type of cost - effective analysis should
be undertaken.
› Difficulties occur in measuring the cost of providing the
information and measuring the value of information.
Information is theoretical in nature and possibly has, hardly
any tangible characteristics except symbolic
representations.
› Main aspects of information economics are cost and value.
COST OF INFORMATION
› An information system is a key place for information generation,
storage and use. With the advances in information technology they
are increasingly used in day-to-day applications. So the cost of
operation of information system is:
› Hardware Cost :
This is normally a fixed or one time cost over a relevant range. In case
of computer based information system, with the development in
technology, hardware costs are coming down drastically.

System Analysis, Design and implementation cost:

› This is also a one time cost. This function includes formulating a
methodology for overall electronic data processing procedure. This
should include the cost for preparation of programs and purchase of
software.
COST OF INFORMATION
› Cost of Space and Environmental Control Factors:
This cost may vary from time to time. Examples of this cost
are floor space, air-conditioning, power control units,
generator, security.
› Operation Costs:
This is basically a variable cost and includes costs of
personnel, systems maintenance, supplies and support
facilities.
TYPES OF INFORMATION
› Environmental Information
› Environmental information requirement can be further
classified and described as follows:(
– Government policies - Information about Government policies or
financial and tax affairs, political stability, etc. is required and may
have a significant effect on future planning decisions.(
– Technological environment - The information on technological
changes or advancements is necessary for forecasting such
changes in the firm and their probable effects on the same. It is
also desirable to assess the effect of technical changes on new
products and processes.
TYPES OF INFORMATION
› Environmental Information
– Economic trends - It includes information about
› (a) Economic indicators like employment, productivity, capital investment;
› (b) Prices and wage levels which affect all, regardless of product or services;
› (c) GNP level, trend and consumer disposable income.
– Factors of production - These include information about the
source, cost, location, availability, accessibility and productivity of
the major factors ofproduction such as labour, materials and spare
parts as well as capital.
TYPES OF INFORMATION
› Competitive Information
› Competitive information requirement can be classified and
described as follows:
– Industry demand - This refers to the demand forecast of the
industry for the product manufactured or about the area in which
the firm is operating.
– Firm demand - This implies assessment of the firm's capabilities,
activities and potentialities to meet demand relative to the
capabilities and actions of the competing firms.
TYPES OF INFORMATION
› Competitive Information
› Competition - This includes information about competing firms
for forecasting own product demand and making decisions and
plans to achieve the forecast. Such information falls into three
categories:
– (a) Past performance - It encompasses information concerning
profitability, return on investment, market share etc, which helps to
provide a yardstick for setting performance objectives for future.
– (b) Present activity - Here comes the information concerning
competitor's price strategies, advertising campaigns, product mix,
changes in distribution channels, etc. which help to evaluate one's own
weaknesses or strengths.
– (c) Future plans Information concerning new products, R&D efforts,
availability of raw materials, etc. which help to decide future plans,
comes under this head.
TYPES OF INFORMATION
› Internal Information
› It is the by-product of the normal operations of a business.
Generally, it is historical or static in nature. Internal information
is aimed at identification of the firm's strengths and
weaknesses. It includes the following:
– Policies - Long-term basic policies on product range, marketing, finance
and about personnel do not permit flexibility in developing alternative
courses of action in the short run.
– Financial plan - Information on financial or budget plan is important
because it represents a quantitative and time bound commitment about
the allocation of total resources like employees, plant, materials,
overheads, administrative expenses of the firm. It provides information
about a number of sub-plans of the organization and it acts as an
important link between all activities of the firm.
TYPES OF INFORMATION
› Internal Information
› It is the by-product of the normal operations of a business.
Generally, it is historical or static in nature. Internal information
is aimed at identification of the firm's strengths and
weaknesses. It includes the following:
› Sales forecast - Since all other internal plans of the firm are
guided by the sales plan, it is considered as the dominant
planning premise internal to the firm.
› Supply factors - Information concerning availability and
limitations of certain supply factors such as labour, capital, plant
and equipment is important as these factors play a vital role in
developing the financial and subsidiary plans for achieving,
organization's objectives.
INFORMATION CLASSIFICATION
› Action information: Information (or data) when processed
and used in some context is called action information.
› Non action information: The information (or data) lying
unnoticed is known as nonaction information.
› Documentary information: Information which is available in
some document form, i.e., either in some written form or on
microfilms, magnetic tapes, floppy disks etc. is
calleddocumentary information.
› Non documentary information: All information which are not
documented are categorized as non documentary (or oral)
information.
INFORMATION CLASSIFICATION
› Recurring information: Information which is generated at regular
intervals of time is called recurring (or repetitive) information.
› Non recurring information: A particular type of information which
is arrived at through some special kind of study and which helps
in management decisions is called anon-recurring (or non-
repetitive) information.
› Internal information: Information which is obtained from various
sources within the organization is termed as internal
information.
› External information: Information which is obtained from various
sources outside the organization is termed as external
information.
CHARACTERISTICS OF INFORMATION
› The primary characteristics, which an information must
possess are:
› (i) Relevance
› (ii) Availability
› (iii) Timeliness.
BASIC FOUR PRINCIPLES OF
INFORMATION
› Data + Relevance + Purpose = Information
› Information + Insight = Understanding
› Understanding + Communication = Intelligence
› Intelligence + Action = Effectiveness
WHAT IS SYSTEM ?
› The term system is derived from Greek word systema,
which means an organized relationship among functioning
units or components.
› A system is an orderly grouping of interdependent
components linked together according to a plan to achieve
a specific objective.
CHARACTERISTICS OF SYSTEM
› ORGANIZATION
› INTERACTION
› INTERDEPENCE
› INTEGRATION
› CENTRAL OBJECTIVE
CHARACTERISTICS OF SYSTEM
› ORGANIZATION
– Organization implies structure and order. It is the arrangement
ofcomponents that helps to achieve objectives.
– In the design of a business system, for example, a computer
system is designed around an input device, a central processing
unit, an output device, and one or more storage units. When linked
together they work as a whole system for producing information.
– Likewise, the hierarchical relationships starting with the president
on top and leading downward to the blue-collar workers represents
the organization structure. Such an arrangement portrays a
system-subsystem relationship, defines the authority structure,
specifies the formal flow of communication, and formalizes the
chain of command.
CHARACTERISTICS OF SYSTEM
› INTERACTION
– Interaction refers to the manner in which each component
functions with other components of the system.
– In an organization, for example, purchasing must interact with
production, advertising with sales, and payroll with personnel.
– In a computer system, the central processing unit must interact
with the input device to solve a problem. In turn, the main memory
holds programs and data that the arithmetic unit uses for
computation.
CHARACTERISTICS OF SYSTEM
› INTERDEPENCE
– Interdependence means that parts of the organization or computer
system depend on one another. They are coordinated and linked
together according to a plan.
– One subsystem depends on the input of another subsystem for
proper functioning; that is, the output of one subsystem is the
required input for another subsystem.
– Note: No system can function in isolation because it is dependent
on the data (inputs) it receives from other subsystems to perform
its required tasks.
– For example, a decision to computerize an application is initiated
by the user, analyzed and designed by the analyst, programmed
and tested by the programmer, and run by the computer operator.
CHARACTERISTICS OF SYSTEM
› INTEGRATION
– Integration refers to the holism of systems. Synthesis follows
analysis to achieve the central objective of the organization.
– Integration is concerned with how a system is tied together. It is
more than sharing a physical part or a location. It means that parts
of the system work together within the system even though each
part performs a unique function.
– Successful integration will typically produce a synergistic effect
and greater total impact than if each component works separately.
CHARACTERISTICS OF SYSTEM
› CENTRAL OBJECTIVE
– The last characteristic of a system is its central objective.
Objectives may be real or stated.
– Although a stated objective may be the real objective, it is not
uncommon for an organization to state one objective and operate
to achieve another.
– The important point is that users must know the central objective
of a computer application early in the analysis for a successful
design and conversion.