Unit 4: Management Information System (BBA 305)

Unit – IV
Syllabus
Unit – IV: Development of MIS: Development of long rage plans of the MIS. Ascertaining the class of
information, determining the Information requirement, Development and implementation of the MIS,
Management of quality in the MIS, organization for development of the MIS, MIS: the factors of
success and failure.

DEVELOPMENT OF MIS

Development of Long Range Plans of the MIS:

• The plan for development and its implementation is a basic necessity for MIS.
• In MIS the information is recognized as a major resource like capital, time and capacity.
• If information (resource) is to be managed well, it calls upon the management to plan for it and control
it for the appropriate use in the organization.
• With the advancement of IT, it is possible to recognize information as a valuable resource like money
and capacity.
• It is necessary to link its acquisition, storage, use and disposal as per the business needs for meeting the
business objectives.
• So we need MIS flexible enough to deal with the changing information needs of the organization. It
should be open system. The designing of such an open system is a complex task.
• It can be achieved if MIS is planned, keeping in view, the plan of the business management of the
organization.

Contents of the MIS plan

• A long range MIS plan provides direction for the development of the systems, and provides a basis for
achieving the specific targets or tasks against a time frame.

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MIS plan is linked to the Business plan

(a) MIS Goals & Objectives: Goals are to consider management philosophy, policy constraints,
business risks, internal and external environment of the organization and the business.

The typical goals are as under

• Provide online information on the stock, markets and the account balances
• The query processing should not exceed more than 3 sec.
• The focus of the system will be on the end user computing and access facilities
• Information support will be the first in the strategic areas of management such as marketing or
service or technology.

(b)Strategy for the Plan achievement:

•Development Strategy: An online, a batch, a real time technology platform.

• System development strategy: SSAD (Structured System Analysis & Design) or OOT (Out of
Trend), Database VS conventional etc.

• Resources for system development: In house VS external, customized development VS the

use of packages.
• Manpower composition: Analyst, programmer skills and know-how.

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(c)The architecture of the MIS: It provides a system structure and their input, output and linkages. It
also provides handling of systems & subsystems by way of simplification, coupling and decoupling of
subsystems.
(d) The system development schedule: A schedule is made for the development of the system. Unless
the systems are fully developed their integration is not possible.
(e) Hardware and software plan: Giving due regard to the technical and operational feasibility, the
economics if investment is worked out. Then the plan of procurement is made after selecting the
hardware and software.
The selection of the architecture, the approach to the development and choice of hardware and software
are the strategic decisions and needs to be taken very carefully.
Following points to consider-
• The organization’s strategic plan should be the basis for the MIS strategic plan.
• The IS development schedule should match with the implementation schedule of the business plan.
• The choice of information technology is a strategic business decision and not a financial decision.

Model of MIS Plan

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Ascertaining the class of information

Information is classified on the basis of its application and the user.

Functional Managerial Information:

• The functional information is defined as a set of information required by the functional head in
conducting the administration and management of the function.
• Functional information is largely factual, statistical and detailed in multi-dimensions of the function.
Such information is used for planning, budgeting and controlling the operations of the function.
Eg. If you take sales information, it can be processed in several ways such as product, product groups,
market segment, geographic zone, locations etc.
• The functional information can be assessed on the following three parameters:
• The work design
• The responsibility
• The functional objectives.

• Work design

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– For example, for the customer order scrutiny the available stock, the price, the terms of payment and
the probable delivery is an information set evolved out of the work design of customer order processing.
The procedure of the order processing requires this information.
• Responsibility
– The managers in the functional areas of management are responsible for achieving the targets and
accomplishing the goals and objectives. So important to inform and update the information on target at
regular intervals.
• Functional objective
– Each function has its own objectives which are derived out of the corporate goals.
– Some of the business plan objectives are given below based on which each function is the organization
derives its objectives
• The total sales per month is Rs. 10 million
• The finished goods inventory not to exceed Rs. 1 million
• The outstanding more than six months not to exceed Rs. 0.2 million
• The employee attendance per month should be 90 percent

Determining the Information Requirement:

• The sole purpose of the MIS is to produce information which will reduce uncertainty risk in a given
situation.
• The difficulty to determine a correct and complete set of information is on account of the factors given
below:
• The capability constraint of the human being as an information processor, a problem solver and
a decision maker
• The nature and the variety of information in précised terms
• Reluctance (unwillingness) of decision makers to spell out the information for the political and
the behavioural reasons
• The ability of the decision makers to specify the information

Methods of determining information:

There are four methods of determining the information requirements.
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They are:
1. Asking or interviewing
2. Determining from the existing system
3. Analysing the critical success factors
4. Experimentation and modeling

1. Asking or interviewing: A designer of the MIS puts questions or converses with the user of the
information and determines the information requirements. Putting the questions is an art and it should be
used properly to seek information. When multiple users or several decision makers in similar functions
or positions are involved, a brain storming session is performed to cover. The experts or experienced
users are asked to give their best answers. This approach is called the Delphi method.
2. Determining from the existing system: In a number of cases the existing system, which has been
evolved after a number of years, and has been designed out of experience give you the requirement of
information. Moreover, systems from other companies can give additional information requirements.
3. Analysing the critical success factors: Every business organisation performs successfully on
efficient management of certain critical success factors. Eg. In a high technology business, the
management of the technology becomes the critical function. In a consumer industry, marketing and
service becomes the critical functions.
4. Experimentation and modeling: When there is total uncertainty, the designer and the user of the
information resort to this method for determining the information requirement. The experimentation
would decide the methodology for handling the complex situation. Test marketing of a product is an
approach of the experimentation to decide the correct marketing strategy.

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Development & Implementation of MIS

• The development strategy determines where to begin and in what sequence the development can take
place with the sole objective of assuring the information support.
• The designer first develops systems independently and starts integrating them with other systems,
enlarging the system scope and meeting the varying information needs.
• Determining the position of the system in the MIS is easy. The real problem is the degree of structure,
and formalization in the system and procedures which determine the timing and duration of development
of the system.

[A]Prototype Approach
• When the system is complex, the development strategy is Prototyping of the system.
• Prototyping is a process of progressively ascertaining the information needs, developing methodology,
trying it out on a smaller scale with respect to the data and the complexity, ensuring that it satisfies the
needs of the users, and assess the problems of development and implementation.
• This process therefore identifies the problem areas, inadequacies in the prototype, fulfillment of the
information needs. The designer then takes steps to remove the inadequacies.

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[B]Life Cycle Approach

• There are many systems or subsystems in the MIS which have a life cycle that is they have birth and
death.
• Their emergence may be a sudden or may be a part of the business need, and they are very much
structured and rule-based.
• They have 100% clarity of inputs and their sources, a definite set of outputs in terms of the contents
and formats.• Eg. are payroll, share accounting etc.
• These systems have a fairly long duration of survival.

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Implementation of the MIS

• The implementation of the system is a management process. It brings about organizational change, it
affects people and changes their work style.
• The process evokes a behaviour response which could be either favourable or unfavourable depending
upon the strategy of system implementation.
• In the process of implementation, the system designer acts as a change agent or a catalyst.
• Certain guidelines system designer should take care of:
– Not question beyond a limit the information need of the user.
– Not to forget that his role is to offer a service and not to demand terms.
– The designer should respect the demands of the user.
– Not to mix up technical needs with the information needs
– Impress upon the user the global nature of the system design which is required to meet the
current and prospective information need.
– Not to challenge the application of the information in decision making.
– Impress upon the user that the quality of information depends on the quality of input
•Impress upon the user that you are one of the users in the organization and that the information is a
corporate resource so contribute to MIS.

• Ensure that the user makes commitment to all the requirements of the system design specification.
• Ensure that the overall system effort has the management’s acceptance
• Enlist the user’s participation from time to time, so that he is emotionally involved in the process of
development
• Realise that through serving the user, he is the best guide on the complex path of development
• Not to expect perfect understanding and knowledge from the user as he may be the user of a non-
computerised system.
• Impress upon the user that the change, which is easily possible in manual system, is not as easy in the
computer system
• Impress upon the user that perfect information is non-existent, his role therefore still has an importance
in the organization.
• Ensure that other organization problems are resolved first before the MIS is taken for development
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• Conduct periodical user meetings on systems

• Train the user in computer appreciation and systems analysis.

Lewin’s model of implementation process

Three steps in this process
1.Unfreezing: To make the people more receptive and interested in the change.
2.Choosing: To choose a course of action where the process begins and reaches the desired level of
stability
3.Refreezing: Where the change is consolidated and equilibrium(balance) is reinforced.

Management of information quality in MIS

The quality of information is the result of the quality of the input data, processing design, system design,
system and procedures which generate such a data, and the management of the data processing
function.

Quality Parameters of information:

1. Complete data of all the transactions: This achieves integrity of data with respect to the time
period.
2. Valid transaction and input data: Ensures the validity of the data and in turn, assures a valid
information.
3. Accuracy and precision: Assures that the results are accurate and precisely correct based on rule,
act or law using complete data.
4. Relevance to the user/decision maker/Stake holder: Strong link between business goal and MIS
goal.
5. Timely information: Useless if received late.
6. Meaningful and complete information: incomplete information forces the user to interpret
erroneously leading to a wrong decision
The quality of the parameters is assured if following steps are taken
– All the input is processed and controlled
– All updating and corrections are completed
– Inputs are subjected to validity checks

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– Data files is protected and secured

– Immediate processing checks are introduced
– Proper file selection for processing
– Back-up of the data and files
– System audit is conducted from time to time
– The system modifications are approved
– Systems are developed with a standard specification of design and development
– IS is controlled through programme control, process control and access control.
– Ensure MIS model confirms consistency to business plan

Organisation for Development of an Appropriate MIS for A Business Organization

Following steps are involved in the development of an appropriate MIS for a business organisation:
1. Defining and analysing various types of decisions made in the organization:
The MIS designers should thoroughly analyse the existing decisions- making system of the organisation.
This requires a study of different levels of decision makers and the priorities of these decision makers.
The purpose of this study is to ensure the collection, analysis and dissemination of right information for
different decision makers in the organisation.
2. Comparison of costs and benefits of the system:
The MIS of the organisations should be designed in such a manner so that the benefits out-weight the
cost of collecting, analysing and presenting information. Depending upon the size of the organisation,
alternative means of providing information for managerial decision making should be studied and
evaluated in terms of their costs and benefits.
An effective MIS not only evaluates information for presentation but also eliminates unnecessary data.
The MIS should summarise and condense information so that it can be easily absorbed and used for
decision making.
3. Pre-Testing of the systems and training of operators:
MIS should be pretested before it is put to use. If the system is not pretested then problems are likely to
arise and changes in the system at that time may prove to be very expensive. Also proper training should
be imparted to the managers to understand the system so that they can make proper use of the system.
4. Proper planning for storage of information:

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Proper arrangement should be made for storage of information. Ail information should be stored in
disaggregated files. New data should be added to the existing data in a given category as it is received.
Different decision makers with similar information needs should be identified so that they can be
grouped together for dissemination of information. This would avoid duplication and waste.
5. Mechanism for gathering and processing data:
Proper methods for information processing must be selected. This requires determination of steps for the
purpose of collecting, storing, sorting, evaluating, transmitting and retrieving information. A system of
controls should also be developed so as to identify and correct any deficiency that might occur in the
system.
6. Proper arrangement for dissemination of information:
Proper arrangement should be made for the dissemination of information at the right time to various
decision makers. Information delayed is information denied. Proper formats should be designed for the
dissemination of information to various decision makers having regard to their information needs.
7. Review of MIS at periodical intervals:
Functioning of the MIS should be reviewed at periodical intervals. This review helps in identifying
deficiencies in the existing MIS and making appropriate changes to overcome such deficiencies.

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MIS - The factors of Success and Failure:

Many organizations use MIS successfully, others do not. Though the hardware and the software is the
latest and has appropriate technology, its use is more for the collection and storage of data and its
elementary processing. There are some factors which make the MIS a success and some others, which
make it a failure. These factors can be summarized as follows:

Factors Contributing to Success: If a MIS is to be success then it should have all the features listed as
follows:

 The MIS is integrated into the managerial functions. It sets clear objectives to ensure that the
MIS focuses on the major issues of the business.

 An appropriate information processing technology required to meet the data processing and
analysis needs of the users of the MIS is selected.

 The MIS is oriented, defined and designed in terms of the user's requirements and its operational
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viability is ensured.

 The MIS is kept under continuous surveillance, so that its open system design is modified
according to the changing information needs.

 MIS focuses on the results and goals, and highlights the factors and reasons for non achievement.

 MIS is not allowed to end up into an information generation mill avoiding the noise in the
information and the communication system.

 The MIS recognizes that a manager is a human being and therefore, the systems must consider
all the human behavioral factors in the process of the management.

 The MIS recognizes that the different information needs for different objectives must be met
with. The globalization of information in isolation from the different objectives leads to too
much information and information and its non-use.

 The MIS is easy to operate and, therefore, the design of the MIS has such features which make
up a user-friendly design.

 MIS recognizes that the information needs become obsolete and new needs emerge. The MIS
design, therefore, has a basic potential capability to quickly meet new needs of information.

 The MIS concentrates on developing the information support to manager critical success factors.
It concentrates on the mission critical applications serving the needs of the top management.

Factors Contributing to Failures: Many a times MIS is a failures. The common factors which are
responsible for this are listed as follows:

 The MIS is conceived as a data processing and not as an information processing system.

 The MIS does not provide that information which is needed by the managers but it tends to
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provide the information generally the function calls for. The MIS then becomes an impersonal
system.

 Underestimating the complexity in the business systems and not recognizing it in the MIS design
leads to problems in the successful implementation.

 Adequate attention is not given to the quality control aspects of the inputs, the process and the
outputs leading to insufficient checks and controls in the MIS.

 The MIS is developed without streamlining the transaction processing systems in the
organization.

 Lack of training and appreciation that the users of the information and the generators of the data
are different, and they have to play an important responsible role in the MIS.

 The MIS does not meet certain critical and key factors of its users such as a response to the query
on the database, an inability to get the processing done in a particular manner, lack of user-
friendly system and the dependence on the system personnel.

 A belief that the computerized MIS can solve all the management problems of planning and
control of the business.

 Lack of administrative discipline in following the standardized systems and procedures, wrong
coding and deviating from the system specifications result in incomplete and incorrect
information.

 The MIS does not give perfect information to all the users in the organization.

************The End*************

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