Chapter 1

Introduction to Management
Information System
ChapterIndex

S.No ReferenceNo Particulars Slide

From-To

1 Learning Objectives 3

2 Topic1 Concept of Information System(IS) 4-5

3 Topic2 Management Information System 6-13

(MIS)
4 Topic3 Structure of MIS 14-18

5 Topic4 MIS Reports and its Types 19

 Learning Objectives

 Discuss the concept of information systems

 Explain different aspects of MIS

 Discuss about the function of MIS

 Describe the structure of MIS

 Concept of Information System (IS)

Information system (IS) is designed to support business

operations for providing necessary information.

Information can be defined as a well-structured data

with a specific meaning.

A system is an arrangement that takes input and

provides output after completing the required process.

IS is defined as an arrangement that processes data and

provides meaningful information through the
application of various tools.
Information system is a set of interrelated components that collects, stores,
processes, generates and disseminates information for effective business
functioning.

Information
System Model
 Management Information System (MIS)
Management Information System (MIS) provides information to the
management, which helps in decision making and effective business
management.

According to Schwartz, “MIS is the system of people, equipment,

procedures, document and communication that collects, validates,
operates on, transforms, stores, retrieves and presents data for use in
planning, budgeting, accounting, controlling and other management
processes.”
According to Davis and Olson, “MIS is an integrated user-machine system
designed for providing information to support operational control,
management control and decision making functions in an organisation. ISs
make use of resources such as hardware, software, men, procedures as well
as suppliers.”
 Structure of MIS

Information Management
(Planning, Management
System (Data, Information
Process, Organising,
Directing, System
Information)
Controlling)

MIS refers to a set of interrelated MIS collects data from various

components that collects, stores, resources, processes it and
processes, generates and transforms that data into
disseminates information for meaningful and useful information.
effective business decision
making.
Nature and Scope of MIS

Nature of MIS

It refers to the approach of input, process and output involved

System approach
in business decision making.

Technology-based This concept explains the utilisation of various technologies

concept for data processing in the system.

This encompasses all business disciplines such as accounting,

Interdisciplinary
concept computer science, operational research, statistics, behavioural
science and management.

MIS provides useful information to managers for making various business

decisions.

MIS helps in analysing and organising unstructured data collected from

various resources.

Information technology has significantly broadened the scope of MIS.

Characteristics of MIS

Management
orientation

Flexibility of
process Need based

Characteristics
of MIS

Growth
orientation Integration
Need for MIS

Need for MIS in the organisation are as follows:

Fulfils information
requirements of the Facilitates effective
organisation in setting decision-making measures
goals

Ensures the efficiency of

Organises data from
planning in the
various resources
organisation

Facilitates the flow of

Provides an effective
information among
control on operational
employees of different
functions
levels
Functions of MIS

MIS serves the information needs of managers to make various

management decisions.

Functions
of MIS
Adopting MIS in Organisations
AdoptionofISinorganisations
Timeframe MajorAdoptions SkillsRequiredtobe
AcquiredorDeveloped
1970s •Main focus was to automate existing processes ProgramminginCOBOL
•Use of Mainframe computers
•Centralization of computers and data
•Systems tie up with a few business functions: payroll, inventory, billing.

1980s •Main focus was on automating existing processes. PCsupport,basic

•Installation of PCs and LANs Networking
•Setup of separate computer systems for separate departments.
• End-user computing with word processors and spreadsheets making individual
departments less dependent on the IT department.

1990s •Main focus was on central control and corporate learning. Networksupport,systems
• Adopting Wide Area Networks (WANs) as corporate standards. integration,database
• System integration and data integration efforts by senior management. administration
• Reduction in stand-alone systems.

2000s •Main focus is on efficiencies and speedy business processes in inventory, manufacturing, Globalnetworksupport,
distribution. systemsintegration
• Expansion of Wide Area Networks to the Internet.
• Introduction of global enterprises and business associates for more efficient supply
chain and distribution practices.
• Senior management looks for data sharing across systems.
MIS and Small Business

MIS can help small businesses in performing their core operations

efficiently by generating accurate and relevant reports.

These core operations are as follows:

Customer
Finance and Human resource Inventory
relationship
accounting management management
management

Purchasing and Orders and

Production E-commerce
merchandising delivery

Reports created for these core operations help in developing business,

aiding extraction of meaningful information from the business data
and thus enhancing the business decision-making process.
 Structure of MIS

•Hardware •Analysing data

•Software •Maintaining files
•Database •Processing queries
•Network •Producing reports
•People

Physical Information
Components Processing
Decision Management
Support Functions

•Planning
•Organising •Strategic level functions
•Tactical Level functions
•Directing
•Operational Level
•Controlling
functions
Physical Components

The MIS components that can be physically examined fall under this
category. These includes:

Hardware Software Database Network People

Information Components

The information processing component of MIS includes the following

elements:

Management Processing of Report

Data analysis
of files queries generation
It refers to It involves It involves It involves
activities such creating and extracting data preparing
as calculating, maintaining and analysing reports
sorting, records of data it for required manually or in
classifying and and operations to an electronic
comparing information produce form for the
data. obtained in information for reference of
previous the query. managers.
processes in
folders or files
for future
reference.
Management Functions

MIS Structure at Different Levels of Management

Strategic-Level Top-Level Unstructured

Functions Management Decision

Middle-Level Semi Structured /

Tactical-Level Functions
Management Structured Decision

Operational-Level Lower-Level
Structured Decision
Functions Management
Decision Support

A decision can be of two types, namely structured and unstructured.

Structured Decisions Unstructured Decisions

Structured decisions are Unstructured decisions are those

dependent on previous decisions that do not relate to any previous
and are operational in nature. decisions and are administrative
in nature.

Apart from these two categories, there can be semi-structured decisions, which are
taken by middle management but are indirectly related to the top management.

Examples of Management Decisions

UnstructuredDecisions Semi-structuredDecisions StructuredDecisions
(Planning) (Organising) (DirectingandControlling)
•Financial planning •Financial forecasting •Cash management
•Portfolio management •Financial budgeting •Purchase decisions
•Ratio analysis
 MIS Reports and its Types
MIS reports are an essential tool required by the management to assess the
performance of an organisation in order to allow faster decision making.

MIS reports can be classified under four major heads which are as follows:

Scheduled These reports are produced periodically i.e., daily, weekly,

reports fortnightly etc. or on any particular schedule.

Key
indicator These reports are primarily available at the beginning of the day
and summarise the previous day’s critical activities.
reports

Demand These reports are generally given at the request of any key person
reports or the manager.

Exception These reports are produced automatically when arises a situation

reports that seems unusual or any situation that requires an action of
management.