Managemen

t
Information
System
Lecture 1: Introduction
A Business - MIS
Supplie Sales
r

Material

Customer

Warehouse

Production
Accounts

Quality
BRINGING THE ORGANIZATION TOGETHER

ERP – The organization before ERP

BRINGING THE ORGANIZATION TOGETHER
ERP – bringing the organization together
HISTORIC DEVELOPMENT
HISTORIC DEVELOPMENT
 MIS
Chapter I – Manager Information System
I. MANAGEMENT INFORMATION SYSTEMS
 A. Management: What is
management?
 B. Information: What is information?
 C. Systems: What are systems?
MANAGEMENT INFORMATION SYSTEMS

A. Management: What is management?

“Management is group of individuals who does :
1. Planning - Goal setting, Environmental scanning, Forecasting and Data
collection
2. Organizing - Staffing, Coordinating, Delegating, Understanding,
Procedures/ Policies
3. Leading- Authority, Motivating, Directing ( Delegation of
responsibilities
) activating, Supervising, Negotiation and Persuading
4. Controlling - Controlling: Resources- Money (capital), manpower
(people), materials, machines, movement (Distribution, flow), and
Information. Measuring, Evaluating , Reporting, corrective action and
feed back
5. Communicating: Goals/Objectives, standards of desirability.
Informing, Persuading, Negotiation, Corrective action, Listening
MANAGEMENT INFORMATION SYSTEMS

B. Information: What is information?

“ A definition: Information is data that has been processed into a form
that is meaningful to the recipient (USER) and is of real or perceived
value in current or prospective actions or decisions.
1. Data (raw material)- Alpha-numeric and Symbolic : Stored facts,
inactive (they
exist), technology based and gathered from various places
2. Processed data :meaningful, perceived value, motivating action, HAS SURPRISE
VALUE, HAS NEWS VALUE, Presented facts, active (it enables doing), business
based (Domain based) and transformed form data
3. Model : entity, attribute and relationship
4. Reduces Uncertainty
5. Reduces Equivocal (ambiguity)
6. Knowledge/Power
7. Send/Receive Messages
MANAGEMENT INFORMATION SYSTEMS

C. Systems Concepts: What are systems?

“physical system is a set of components (subsystems or elementary
parts) that operate together to achieve a common objective (or
multiple objective).

1. Input-process-output an orderly arrangement of interdependent ideas or

constructs (ABSTRACT SYSTEM)
2. a set of elements which operate together to accomplish an objective
(PHYSICAL SYSTEM)
 Transforming Data Into Information

Data Inputs Information Outputs

Query Response
ExternalInternal Capture
Data Data
D
e
c
i
s
i
o
n
at User Location
Report
O
Organization Information Systemu 14

Environment t
c
DATA, INFORMATION, AND SYSTEMS

 Generating Information
 Computer-based ISs take data as raw material, process it,
and produce information as output.
MIS
 Data vs. Information

 Data
 A “given,” or fact; a number, a statement, or a picture

 Represents something in the real world

 The raw materials in the production of information

 Information
 Data that have meaning within a context

 Data in relationships

 Data after manipulation

 Data Analyses:

 Example: customer survey

 Reading through data collected from a customer survey with questions in

various categories would be time-consuming and not very helpful.

 When manipulated, the surveys may provide useful information.
MIS

 Information in Context
Meaning of MIS

1. An organized approach to the study of the information

needs of an organization's management at every level in
making operational, tactical, and strategic decisions. Its
objective is to design and implement procedures, processes,
and routines that provide suitably detailed reports in an
accurate, consistent, and timely manner.

2 .In a management information system, modern,

computerized systems continuously gather relevant data,
both from inside and outside an organization. This data is
then processed, integrated, and stored in a centralized
database (or data warehouse) where it is constantly
updated and made available to all who have the authority
to access it, in a form that suits their purpose.
Meaning of MIS

3. MIS is the system, which makes available the right

information to the:
 Right Person
 At Right Place
 At right time
 In the right format/form
 At right cost.
Definition of MIS

 Lucey, defines MIS as

“a system to covert data from internal and

external sources into information to communicate
that information in an appropriate form to
managers at all levels, in all functions to make
timely and effective decisions for planning,
directing and controlling the activities for which
they are
responsible”
TYPES OF MIS
There are as many types (and subtypes) of management
information systems as there are business functions. Some of the
most popular types of MIS are as follows:

 --Customer relationship management

--Marketing, particularly target marketing efforts, directed at
specific groups of potential customers or selling niche products
--Financial management
--Strategic plan development
--Inventory management systems
--Optimal investing strategy creation
--Projected sales volume
--Projected operating expenses and cost control

 Other types of MIS systems calculate projected tax revenue for

governments; statistical evaluations of all types for business,
researchers and universities; scientific purposes in all
disciplines; and cost/benefit relationships for decision-making
purposes.
BENEFITS OF MIS

The benefits of MIS systems to businesses, governments,

scientists, universities, students, nonprofits and all other
entities are diversified. Some examples of the most often
realized benefits include the following:
 --Implementation of Management by Objectives (MBO)
techniques: MIS allows all participants, both management
and staff, to view, analyze, and interpret useful data to set
goals and objectives.
 --Generates competitive advantages: Businesses succeed or
fail based on how they face competitive challenges. MIS, if
implemented properly, provides a wealth of information to
allow management to construct effective plans to meet, and
beat, their competition.
 --Fast reaction to market changes: The victory often goes to
the quick, not necessarily the best. MIS can deliver facts, data
and trends to businesses with lightning speed. Having this
information allows companies to react quickly to market
changes, regardless of the type (positive or negative) of
volatility.
Need, Purpose and Objective of MIS

 Decision making
 Problem Solving

 Controlling

 Getting competitive edge

Contemporary (modern) Approaches to MIS

Contemporary MIS systems involve one or more computers, working in concert, to achieve the
stated goals of an organization. The function is always the same, but the desired results
fluctuate with the specific goals and needs of individual organizations. Since the universal
language of commerce is numbers, using the incredible speed of computers, MIS systems
achieve their function amazingly well.

 Technical Approach:
 It includes mathematical and normative
 Rely on physical technology and formal capabilities of systems
 Computer science, management science and operation research contributes significantly.

 Behavioral Approach:
 Depends on Developer consider- behavioral aspects political science, psychology,
sociology and organizational behavior.

 Socio-Technical Approach.- it include both technical as well as behavioral approaches.

The most important features of contemporary MIS systems involve flexibility and reasonable
cost. In the world of business, it matters little what industry you are in, how large or small the
company may be and how computer savvy the management is. There are MIS systems that are
easy to use, affordably priced and immensely reliable available to all businesses.
CLASS 2: CHAPTER I - PART II
CLASS 2: CHAPTER I - PART II

1. Characteristics of MIS
2. Information as Strategic resource
3. Use of Information for competitive advantages
4. MIS as an instrument for the Organizational
Change
CHARACTERISTICS OF MIS
I.Management-oriented: The basic objective of MIS is to provide information support to the management in the
organization for decision making. So an effective MIS should start its journey from appraisal of management needs,
mission and goal of the business organization. It may be individual or collective goals of an organization. The MIS is
such that it serves all the levels of management in an organization i.e. top, middle and lower level.

II.Management directed: When MIS is management-oriented, it should be directed by the management because it
is the management who tells their needs and requirements more effectively than anybody else. Manager should guide
the MIS professionals not only at the stage of planning but also on development, review and implementation stages so
that effective system should be the end product of the whole exercise in making an effective MIS.

III.Integrated: It means a comprehensive or complete view of all the sub systems in the organization of a company.
Development of information must be integrated so that all the operational and functional information sub systems
should be worked together as a single entity. This integration is necessary because it leads to retrieval of more
meaningful and useful information.

IV.Common data flows: The integration of different sub systems will lead to a common data flow which will further
help in avoiding duplicity and redundancy in data collection, storage and processing. For example, the customer
orders are the basis for many activities in an organization viz. billing, sales for cashing, etc. Data is collected by a
system analyst from its original source only one time. Then he utilizes the data with minimum number of processing
procedures and uses the information for production output documents and reports in small numbers and eliminates
the undesirable data. This will lead to elimination of duplication that simplify the operations and produce an efficient
information system.

V.Heavy planning-element: The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 years
and sometimes a much longer period. So the system expert has to keep 2 things in mind – one is that he has to keep
future objectives as well as the firm’s information well in advance and also he has to keep in mind t ha t his MIS will
not be obsolete before it gets into action.
CHARACTERISTICS OF MIS

VI.Sub System concept: When a problem is seen in 2 sub parts, then the better solution to the problem is
possible. Although MIS is viewed as a single entity but for its effective use, it should be broken down in small
parts or subsystems so that more attention and insight is paid to each sub system. Priorities will be set and phase
of implementation will be made easy. While making or breaking down the whole MIS into subsystems, it
should be kept in mind that the subsystems should be easily manageable.

VII.Common database: This is the basic feature of MIS to achieve the objective of using MIS in business
organizations. It avoids duplication of files and storage which leads to reduction in costs. Common database
means a “Super file or Master file” which consolidates and integrates data records formerly stored in many
separate data files. The organization of the database allows it to be accessed by each subsystem and thus,
eliminates the necessity of duplication in data storage, updating, deletion and protection.

VIII.Computerized: MIS can be used without a computer. But the use of computers increases the effectiveness
and the efficiency of the system. The queries can be handled more quickly and efficiently with the computerized
MIS. The other benefits are accuracy, storage capacity and timely information.

IX.User friendly/Flexibility: An MIS should be flexible i.e. there should be room for further modification
because the MIS takes much time in preparation and our environment is dynamic in nature.MIS should be such
that it should be used independently by the end user so that they do not depend on the experts.

X. Information as a resource: Information is the major ingredient of any MIS. So, an MIS should be treated
as
a resource and managed properly
INFORMATION AS STRATEGIC RESOURCE
Yes…. Information is Strategic Resources. Because Information helps in
taking Strategic, Tactical and operational Decisions. It is one of critical
and importance resource.

1. It helps us understand Cost, Quality, price, technology, productivity

and product.
2. It helps to smooth following of business process and there by smooth
managing of business operation.
3. It helps to maintain the business standards like ISO, QS, CMMI,
Six Sigma etc.
4. It helps to be ahead in the competition
5. It helps company in analyzing their own SWOT
6. It helps in maintaining it’s own profitability.
7. It will help in taking new business decisions like new plant, new
product, new business line etc.
8. It protects company from business cycles.
9. It provides future direction to the organization.
10. It provides the competitive edge.
USE OF INFORMATION FOR COMPETITIVE ADVANTAGES
A. According Porter Miller: Information helps in following:
1. Change in industry structure: this includes Five Forces:
1. Customers’ bargaining power

2. Suppliers’ bargaining power

3. Threats of new entrant in market

4. Pressure from substitute products and services and

5. Existing Industry competitors

2. Birth of new business/new business initiatives

3. New ways of doing business
B. Functional Use:
1. Lower the cost
2. Information and information system facilitate value chain e.g. product delivery, quality
3. In increased the speed, accuracy and timeliness of the organization
4. It helps in simplifying the business processes
5. It helps organization in meeting the standards and benchmarks
C. Strategic Use
1. New way of doing the work
2. New way of dealing in Product differentiation
3. It helps in new way of developing strategies, planning, forecasting and monitoring
4. It helps in problem solving and decision making by extensive internal and external data
analysis.
5. It improves the ability to perform
6. It helps in getting advantages of market situation and keeps ahead in the competition.
7. It helps in eliminating waste, inefficiencies and gaps in the business operations
8. Provides the flexibility and helps manage the uncertainties
9. Analysis external information and making use of business
MIS AS AN INSTRUMENT FOR THE ORGANIZATIONAL CHANGE

 External Change
1. MIS has made world smaller
2. Worldwide reorganization environment and attempt to control the calamity.
3. Health conscious among the group leading less sufferings
4. Change in the work lifestyle for better result
5. Creating Knowledge is an assets
 Internal Change
1. MIS will change the Business Process
2. MIS will change the old standards and set new standards
3. MIS key for Continuous improvement Process
4. MIS will reduce the hierarchy and hence less operation cost
5. MIS focus on “Shared information”
6. MIS will accelerate restructure work flow for both line and staff functions.
7. MIS will bring change in Authority and power by merit and not by age or number of
years of experience.
8. MIS brings cultural change.
9. MIS measures the results and performance.
10. MIS brings Continuous addition to Organizational knowledge base.

Is MIS instrument for Changes ?

“Yes”