Structure of MIS

Lai Prabhakar
Structure of MIS
 Operating Elements
 Management information system support for
decision making
 MIS Structure based on Management Activity
 MIS Structure based on Organization
Function

Structure of MIS 2
Operating elements of MIS
 Physical Components
- Hardware
- Software
- Database
- Procedures
- Operations personnel

Structure of MIS 3
Operating elements of MIS

 Processing functions
- Process transactions
- Maintain Master files
- Produce reports
- Process inquiries
- Process interactive support applications

Structure of MIS 4
 Files

Transaction
Transaction Process transaction
document

Process transactions

Structure of MIS 5
 Master
Files
Transac
tion data

Updated
Update master files Master
Files
Master file
changes

Maintain Master Files

Structure of MIS 6
 Report
Files Prepare report

Produce reports

Structure of MIS 7
 Inquiry
Inquiry
Handle inquiry response

Files Inquiry
response

Process inquiries

Structure of MIS 8
 Decision Model input Decision model
maker or and output processing
analyst

Process interactive support applications

Structure of MIS 9
Models
Strategy

Decision
100
80
60
40
20
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Actual Forecast

Output
1  1  x    2 
f ( x) 
 2  exp 2    
Model
Tactics

Data Operations
Company

Structure of MIS
 File: C08Fig08.xls

Understanding the
Why Build Models?


Process
 Optimization
 Prediction
 Simulation or "What If" Optimization
Scenarios
 Dangers Goal or output Maximum
variables

25

20 Model: defined
by the data points
Output 15 or equation
10
5 5

0 3
1 2 3
4 5 6 1
7 8 9 10
Input Levels

Control variables

Structure of MIS
 File: C08Fig09.xls

Prediction
25

20

Economic/
15
regression
Forecast
Output

10

Moving Average
0 Trend/Forecast
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Time/quarters

Structure of MIS
 File: C08Fig10.xls

Simulation
Goal or output
variables
25

20

15
Results from altering
Output

internal rules
10

0
1 2 3 4 5 6 7 8 9 10
Input Levels

Structure of MIS
 File: C08Fig11.xls

DSS: Decision Support Systems

Sales and Revenue 1994

300

Model 250
Legend
200 Sales
Revenue

lts
Profit
150 Prior

sales revenue profit prior su

re
100

154 204.5 45.32 35.72 50

163 217.8 53.24 37.23 0

Jan Feb Mar Apr May Jun
161 220.4 57.17 32.78
173 268.3 61.93 47.68
ze 143 195.2 32.38 41.25 Output
ly
na
181 294.7 83.19 67.52
a
to
t a
da

Database

Structure of MIS
 Transactions
Additional
Stores

Bank

Supplier

EDI
POS
Terminals/ Sales Reports
Registers

Customers Process Control

Central Computer

Structure of MIS
 Data Capture
Additional CEO Information
Stores
Strategy
Bank

Tactics Warehouse
Inventory
Management

Supplier
Operations
Sales Reports EDI
POS
Cash
Registers

Customers Process Control

Central Computer

Structure of MIS
Operating elements of MIS

 Output for users

- Transaction documents or screens
- Preplanned reports
- Preplanned inquiry responses
- Ad hoc reports and inquiry responses
- User machine dialog results

Structure of MIS 17
Transaction document type

 Informational – Report or confirms that action

will be or has been taken. e.g. sales order
 Action – Requests or instructions for action
e.g. purchase order
 Investigational – Reports exceptions, error, or
other conditions that may require
investigation. Used for control and future
reference.

Structure of MIS 18
Information Types of Report, inquiry,
dialog results
 Monitoring information – confirms that actions have
been taken, may provide a basis for problem finding
and diagnosis and may lead to action.
 Problem finding information – presented in a format
that promotes identification of problems
 Action information – presented with action specified
or implied
 Decision support – performing analysis and making
a decision

Structure of MIS 19
MIS support for decision making

 Structured, Programmable Decisions

 Unstructured, Nonprogrammable Decisions

Structure of MIS 20
Decision Levels
Decision Level Description Example Type of
Information
Strategic Competitive New product External events,
advantage, become that will rivals, sales, costs
a market leader. change the quality, trends.
Long-term outlook. industry.
Tactical Improving operations New tools to Expenses,
without restructuring cut costs or schedules, sales,
the company. improve models, forecasts.
efficiency.
Operations Day-to-day actions Scheduling Transactions,
to keep the company employees, accounting,
functioning. ordering human resource
supplies. management,
inventory.

Structure of MIS 21
Making Decisions

Decision Process
 Collect Data
 Identify Problems & Opportunities
 Make Choices

2 3
1

Structure of MIS
 MIS structure based on management
activity
 Strategic planning Activities
Definition of goals, policies,
Determination of objectives
Market strategy
Product mix
Long term planning
Choice of business direction

Structure of MIS 23
Mission Reason for being – it is a statement of the
basic purpose or purposes for which the
organization exists. e.g. “ to supply the
energy to the consumer”

Goals General statement of what is to be

accomplished. e.g. “reduce time to
respond to service request without
increasing number of service personnel”

Strategies General approaches to achieving goals.

e.g. “becoming low cost producer in its
industry”

Structure of MIS 24
Objectives Statement of measurable results to be
achieved. e.g. “specific increases in earning
per share”

Tactics More specific guides to actions that would

implement strategies. e.g. “increasing
investment in automation”

Policy General guidelines that direct & constrain

decision making within a organization. e.g.
“promoting from within”

Rules & More specific statements that direct decision

Procedures making. e.g. “hiring employees, rules
protecting employees jobs”

Structure of MIS 25
 MIS structure based on management
activity
 Porter’s External Agents
 Customers
 Suppliers
 Competitors
 Government

Structure of MIS
 Executive IS
Sales
Production Costs Production Costs
Distribution Costs South
Executives
Fixed Costs North
Overseas

5000
4500
4000
3500
3000

r EIS
South
2500
North

t a fo 2000
Overseas

Da
1500
1000

Central Management 500

0
1993 1994 1995 1996

Production: North
Data Item# 1995 1994
Data 1234 542.1 442.3
2938 631.3 153.5
Sales Data 7319 753.1 623.8

Production
Distribution Data

Structure of MIS
 MIS structure based on management
activity
 Management Activities
control and Acquisition of resources,
tactical planning Organization of resources
Structuring of work
Acquisition and training of personnel
Acquisition tactics, new products,
new plants
Monitoring of budgets

Structure of MIS 29
 MIS structure based on management
activity
 Operational planning Activities
and control Use of existing facilities
and resources to carry
out activities within
budget constraints
Pricing
Production levels
Inventory levels

Structure of MIS 30
 Information requirements by level of
management activity
Characteristics Operational Management Strategic
of information control control planning
Source Largely internal External
Scope Well defined, Very wide
narrow
Level of Detailed Aggregate
aggregation
Time horizon Historical Future
Currency Highly current Quite old
Accuracy High Low
Frequency of Very frequent infrequent
use
Structure of MIS 31
 MIS based on Organizational Function

 Marketing System
 Production System
 Logistics System
 Personnel System
 Finance and Accounting System
 Information Processing System

Structure of MIS 32
Marketing System
Transaction Operational Management Strategic

Sales order Hiring and training Comparison of New markets

Promotion orders of the sales force, overall New marketing
day-to-day performance strategies
scheduling of against a
Customer
sales and marketing plan
analyses
promotion efforts Data on
Competitor
Periodic analyses customers,
analyses
of sales volumes competitors,
consumer survey
by region, competitors
information,
product, products, sales
income
customers. force requirements
projection,
technology
projections

Structure of MIS 33
Production System
Transaction Operational Management Strategic

Production orders Reports Summary reports Alternative

Assembly orders comparing actual which compare manufacturing
Finished parts performance to overall planned or approaches
tickets the production standard Alternative
schedule performance to approaches to
Scrap tickets actual performance
Highlighting areas automation
Time keeping where bottlenecks
tickets occur

Structure of MIS 34
Logistic System
Transaction Operational Control Management Strategic

Purchase Reports such as - Comparison New distribution

requisitions Past due purchase between planned strategies
Purchase orders Past due shipment and actual New policies with
Manufacturing to customers inventory levels regard to venders
orders Out of stock items Cost of Make versus buy
Receiving Overstocked items purchased items Distribution
reports Shipping Inventory turnover Inventory alternatives
orders Bills of reports turnover
lading Vendor
performance
summaries

Structure of MIS 35
Personnel System
Transaction Operational Control Management Strategic

Employment Requires decision Reports and Evaluating

requisition procedures for analyses showing alternative
Job description action such as – the variances strategies for
Training Hiring, training, between planned recruiting, salary,
specification termination, and actual training, benefits
changing pay rates, performance
Personnel data such as – cost of
issuing benefits
Hours worked recruiting,
Paychecks number of hired
Benefits employees, cost
of training, salary
Termination
paid
notice

Structure of MIS 36
 HRM Management

Compile
Merit Management
Managers
Evaluations Reports
& Salary Merit
Changes Produce
Evaluations
Management
Government
Employee
Reports Produce
Merit & Government
Salary Reports
Government
Salary Employee
Reports
Summaries
EEO
Process Data
Employee
Payroll Employee Data
Data
Benefits Files
Vacation Screen
Jobs &
Job & Applications
Employee Applicant
Applicant
Data Data
Sales Data & Data
Commission
Employees
Job
Customers Applicants

Structure of MIS
Accounting

 Financial data and reports

 What do things really cost?
 The accounting cycle
 Inventory
 Checks and balances
 Double-entry
 Separation of duties
 Audit trails

Structure of MIS
 General Ledger



Sample chart of accounts
Automatic posting
Accounting Software
 Accounts payable
 Automatic entry of vendors
 Fiscal years
 Check reconciliation
 Keep past data books open  Automatic recurring entries
 Post to prior years  Monitor payment discounts
 Allocate department expenses  Select bills from screen
 Accounts Receivable
 Pay by item, not just total bill
 Automatic early discounts
 Interest on late payments  General Features
 Multiple shipping addresses  Printer support
 Sales tax  Use of preprinted forms
 Automatic reminder notices
 Custom reports
 Automatic monthly fees
 Keep monthly details
 Custom queries
 Security controls
 Technical support costs

Structure of MIS
 Banks Management
Accounting
and
Creditors Loans & Notes Planning Reports Shareholders
Cash Management
Management, Reports Shareholder
Strategic
Investments, Reports
& Tactical
Foreign Planning
Exchange Capital Acct
Produce Governments
Departments
Planning Shareholder
& Employees
Data Reports

Payroll & Produce Equity Tax Filings

Expenses Employee Management
Benefits Tax data Tax
Payroll Accounting
Filing &
Reports
Planning
Receivables
Inventory &
Sales Tax
Orders & Assets
Sales &
Accounts Payables Inventory
Accounts
Payable Management, Sales & Receivables
Receivable
& Fixed Asset
& Cost Acct. Customers
Purchases &
Payables Inventory Changes Inventory Changes
Supply & Product
Suppliers In-process Inventory
Inventory

Structure of MIS
The Role of Accounting

 Transaction Data
 Purchases, Sales, Loans, and Investments
 Inventory Control
 Process and Controls
 Double-Entry Systems
 Separation of Duties
 Audit Trails

Structure of MIS 41
Traditional Management

CEO Condensed reports

Commands

VP VP VP VP VP
Finance Marketing Accounting HRM MIS
Analyze data

Layers of middle managers

Collect
data
Customers

Structure of MIS
Decentralization
Management Team
CEO
VP VP VP VP VP
Fin Mrkt Acct HRM MIS
Strategy

Corporate
Finance Marketing Accounting HRM
Team Team Team Team Database
&
Network

Sales Methodology/Rules
Franchise
Team

Customers

Structure of MIS
Business Integration
Design feasibility Design &
Designs and Quality
& production costs Engineering
Marketing Quality control
product planning
& Custom orders
planning
Manufacturing planning
& monitoring
& monitoring
Vendors Customers
Purchasing Demand-pull Mass Distribution
Customization Quick
Just-in-Time Response

partnerships partnerships
Administration & Management
& joint & joint
development development
HRM Accounting Finance MIS

Structure of MIS
 Synthesis Structure of MIS

Application Common

uctio
Prod

stics
Sales

Logi
eting
Mark

Acc
Fin
software for programs

&
n
&
Strategic Model D
base
Management B
Operational M
control Com S
mon
Transaction Applic
processing ations

Unique files

Common data Database

files

Structure of MIS 45
Thank you