Management Information System

Information System

What is Data?
Raw Fact and and Figure

What is Information?
Processed data is called Information

What is Knowledge?
Ability to make inference from Information

What is Wisdom?
Why Information is required?
Running Day-to- day activity

Decision Making

Better Communication
What is System?

To work together to achieve the goal

or

Try to make the equilibrium between the

actual one and expected one.
 System

Control

Feedback

Input Process Output

System Stakeholder
Importance of Information
• Information is an aid in decision making, policy making
needed for the policy makers, decision makers, managers
etc.

• Information will have a reinforcing/ transforming effect on

human beings on receiving it. A great deal for change can be
perceived in the human minds/ attitudes on obtaining the
information, as it increases the ability of personal knowledge
for the recipient.

• Information generates new information. This is the existing

knowledge/ information helps in generating new
information; new knowledge; new theories, etc.
Why Information System is required?
Business Operational Excellence
• Businesses can constantly improve their efficiency of their
operations in order to achieve higher profitability.
• They can do this by constantly having the correct amount
of stock in store so consumers can always get want they
want.
New product services and business models
• I.S systems play a major role for businesses in creating new
products and services.
• New business models can be created and these can
describe how a company produce, create and sell there
products. 
Why Information System is required?
Customer and Supplier intimacy
• The better services a company provides its consumers with
more likely they are too come back to them and as result the
more they will buy off the supplier therefore creating a good
relationship with both parties. 

Improved decision making

I.S systems make it possibly for managers to use real time
data when making a decision to therefore make better decisions
and not have to waste time looking for  information.
When you have accurate, up-to-date information, you can
make the choice with confidence.
Competitive advantage
if companies achieve any of these 6 reasons to use I.S they will
generally create a competitive advantage over their rivals.
Why Information System is required?
Business Communication Systems
• Gathering and distribution of information is the part of
management and information systems can make this process
more efficient by allowing managers to communicate rapidly.

• Email is quick and effective, but managers can use information

systems even more efficiently by storing documents in folders
that they share with the employees who need the information.

• Each employee can communicate additional information by

making changes that the system tracks. The manager collects
the inputs and sends the newly revised document to his target
audience.
Why Information System is required?
Day to Day survival
Business invest in these systems to make their jobs as easy as
possibly. an example is Citibank introduced the first ATM machine
to make it easier for customers to access their money and to cut
down queues in their banks. 
 Information System
An information system is an organized combination of

people, hardware, software, communications

Networks and data resources that collects, transforms,

and disseminates information in an organization

(Ref. MIS- James O'Brien)

 Information System
Information systems help managers and workers to
analyze problems, visualize complex subjects, create
new information products and take actionable
decision.

Information systems contain information about

significant people, places, and things within the
organization or in the environment surrounding it.

Ref. MIS Laudon & Laudon)

How Information Systems are Transforming
Business
• Changes in technology and new innovative business models
have transformed social life and business practices.

• Smartphones, social networking, texting, emailing, Web 2.0,

Wikis and Webinars have all become essential tools of business
because that’s where your customers, suppliers, and colleagues
can be found.

• Businesses are using information technology to sense and

respond to
 rapidly changing customer demand,
 Reduce inventories to the lowest possible levels, and
 achieve higher levels of operational efficiency.
How Information Systems are Transforming
Business
• Supply chains have become more fast-paced, with companies
of all sizes depending on just-in-time inventory to reduce their
overhead costs and get to market faster.

• As newspaper print readership continues to decline, more than

168 million people read a newspaper online, and millions more
read other news sites.
 About 83 million people watch a video online every day,
 66 million read a blog, and
 25 million posts to blogs,

creating an explosion of new writers and new forms of customer

feedback that did not exist five years ago.
How Information Systems are Transforming
Business
• Social networking site Facebook attracted over 1 billion
monthly visitors in 2014 worldwide.

• Businesses are starting to use social networking tools to

connect their employees, customers, and managers worldwide.

• Many Fortune 500 companies now have Facebook pages,

Twitter accounts, and Tumblr sites.

• E-commerce and Internet advertising continues to expand.

Google’s online ad revenues increased

• Internet advertising continues to grow at more than 15 percent

a year,
 The Behavioral and Technical Approach
Information Technology
The study of information systems is a field with multiple disciplines
and therefore, no single theory or perspective governs.

Technical Approach
• Computer Science
• Management Science
• Operation Research
Behavioral Approach
• Sociology
• Economics
• Psychology
Technical Approach Information Technology
The technical approach to information systems puts emphasis on
mathematically based models to study information systems, The
disciplines that play a role in the technical approach are computer
science, management science, and operations research.
Computer science has to do with
 Creating theories of computability,
 Means of computation, and
 Approaches to effective access and
 Storage of data.
Management science highlights
 the Growth of models for decision-making and
 Management procedures.
Operations research deals with
 Mathematical methods for optimizing business issues
 Such as inventory control, transportation, and transaction costs
Behavioral Approach Information Technology
• A very important element of the information systems field is
involved with behavioral issues that surface in the development
and preservation of information systems. Problems like
 Strategic business design,
 Implementation and utilization, and
 Management cannot be fully explored with the models
using a technical approach.

• Behavioral disciplines such as economics, psychology, and

sociology can also contribute vital concepts and processes.

Economists study
information systems mainly interested in what impact systems have
on cost structures within the business and within its particular
market.
Behavioral Approach Information Technology
• Psychologists are interested in how human decision makers
comprehend and use information. Finally,

• Sociologists study information systems with an eye toward how

groups and organizations shape the development of systems and
also how systems affect individuals, groups, and organizations.

• Economists study information systems with an interest

in what impact systems have on control and cost structures within
the firm and within markets.
Component of Information System
Classification of IS
 Transaction Processing System
• TPS Supports the monitoring, collection,
storage, processing, and dissemination of
organizational basic business transaction.
or
• TPS are those system which process day –to-
day transaction of an organization to carry out
business operation.
 Objective of TPS
The main Objective of TPS is to provide all the information
required for running business properly and effectively.
Some objective as follow
• Effective and efficient operation
• Timely document and reports.
• Increase competitive advantage.
• Provide necessary data for tactical and strategic system
• Ensure accuracy and integrity of data
• Safeguard assets and security.
• Provide framework for analyzing organizational activity.
 Transaction Processing Cycle
• Data Entry
• Transaction Processing
• File and Database Updating
• Report and document preparation
• Inquiry Processing
Components of TPS

• Input
• Storage
• Processing
• Output
• Backup & Recovery
Components of TPS

• Input
The input function accepts the data from outside . Data entered
into the system is checked for error called data validate. Data
can be processed inside the system.

Data Validation involves checking input data for all possible

error. Data validation application against following

 Missing Data
 Valid Size data
 Composition Error
 Invalid Value
 Comparison with stored data
Components of TPS

• Storage
Data in TPS must be stored in data files or
databases. It stores data in two type of file
 Master Data
 Transactional Data
Components of TPS

• Processing
Processing converts data into information. data in TPS
can be process in two ways
1. Batch Processing
• Transaction are collected and then processed in Batch
Advantage- efficient Processing
Disadvantage Not Up-to-date Data / Query processing
2. Online Processing
• Allows data to be processed immediate and provide the
output to user.
Advantage Up-to-date Data / Query processing
Disadvantage Slow Processing
Components of TPS

• Output
Output obtained from TPS in Three Type
1. Updated Master Data
2. Consists of Operational Results
3. Operational and Summery Report
 Action Report
 Information Report
 Turnaround Report
Components of TPS

• Backup and Recovery

Way to ensure security against loss of stored data is to use
the backup process.
Management Information System
Management Information System

Management information System is an integrated man-

machine for providing information that support
managerial activity( Like controlling, Planning, staffing,
Decision making..etc. ) using business data as input ( 5
M’s, Information, Energy Land etc ) and functional
model base to get organizational objective with
common database.
Characteristics of an Effective MIS

• • Brevity
Economy
• • Sub-System Concept
Flexible
• Consistency
• Relevance
• • Accuracy
Reliability
• • Integrated
Computerised
• Data base
• Heavy planning element
• • Management Oriented
Simplicity
• Versatile • Management Directed
• Analytical
• Communication
Characteristics of an Effective MIS
Economy
• The MIS should be cost effective.
• There are many hidden costs in the design, development
and operation of the systems.
• Costs should be carefully monitored once the system is
working and should be compared with the original planned
costs
Flexibility
• All organization's are dynamic and changes occur for a
wide range of reasons.
• A good MIS must be able to adapt to meet these changes.
• Flexibility, in the way the system is designed, is crucial
Characteristics of an Effective MIS

Relevance
• The information given to each manager should be relevant
to his responsibilities and authorities.
• The flow of information should be from one level to
another in the direction where the decision is to be taken.
• If information is being sent from top level to the middle
level management then it should be sent to the proper
responsibility
Reliability
• Reliability is crucial to performance and can be ensured
only by thorough checking and testing.
• Good standards help to make the MIS reliable as do
validation and security routines.
Characteristics of an Effective MIS

Computerised
• It is possible to have an MIS without using a
computer, but its use increases the effectiveness of
the system.
• In-fact, its use equips the system to handle a wide
variety of applications by providing quickly their
information requirements.
• necessary attributes of the computer to MIS are
accuracy and consistency in processing data and
reduction in clerical staff.
• Management information system make the computer
a prime requirement.
Characteristics of an Effective MIS
• Heavy planning element
• An MIS usually takes 3 to 5 years and sometimes even longer.
• A heavy planning must be present in MIS development.
• It means that MIS designer should keep in view the future
objectives and requirements
• The designer must avoid the possibility of system
obsolescence before the system gets into operation.
• Simplicity
• Simplicity in design will find its way through the system.
• it takes real skill and experience to design simple systems
which are easy to operate and control.
• Systems are abstracts and therefore not apparent in
complicated MIS.
Characteristics of an Effective MIS
• Brevity
• Information should not only be clear but should also be brief.
• Brevity does not mean that certain matters be left out but it
means that maximum information should be communicated
in minimum words.
• Graphs, charts, tables, figures and other such media help in
making the information brief.
• Sub-system concept
• information system is viewed as a single entity, it must be
broken down into digestible sub-systems which can be
implemented at the time by developing a phasing plan.
• The breakdown of MIS into meaningful sub-systems sets the
stage for this phasing plan.
Characteristics of an Effective MIS
• Consistency
• Information system should be consistent.
• There must be a link between all the data.
• Data should be collected by the same method and scale and
should be presented at equal intervals and same Units.
• There must be consistency in all the information given.
• Accuracy
• Information should be accurate as far as possible and if
not, then the level of inaccuracy should be within limits.
• For example, in reports, if undue emphasis is laid on the
accuracy, then the reports cannot be submitted in time.
• Delayed submissions increase its cost. Under such
circumstances, it is better to permit tolerable inaccuracy
Characteristics of an Effective MIS

• Data base
• Data base is the mortar that holds the functional
systems together.
• It is defined as a superfine who consolidates and
integrates data records formerly stored in many
separate data files.
• The organization of a data base allows it to be
accessed by several information sub-systems and thus
eliminates the necessity of duplication in data storage,
updating, deletion and protection.
• it is possible to achieve the basic objectives of MIS
without a common data base,
Characteristics of an Effective MIS

• Integrated
• Developed system of information should be an integrated
one.
• It means that all the functional and operational information
sub-system should be tied together into one entity.
• An integrated information system has the capability of
generating more meaningful information to management.
• The word integration here means taking a comprehensive
view or a complete picture
Characteristics of an Effective MIS

• Management Orientation
• It means that the development of the information system effort should
start from an appraisal of management needs and overall business
objectives.
• A system is not necessarily for top management only.
• It may also meet the information requirements of middle level or
operating level of management as well.
• Management directed
• it is necessary that management should actively direct the system’s
development efforts.
• Their mere one time involvement is not enough.
• For system’s effectiveness, it is necessary for management to devote
their sufficient time not only at the stage of designing the system but for
its review as well,
• to ensure that the implemented system meets the specifications of the
designed system
Advantages of MIS
1. It Facilitates planning:
MIS improves the quality of plants by providing relevant
information for sound decision - making. Due to increase in the size
and complexity of organizations, managers have lost personal contact
with the scene of operations.

2. In Minimizes information overload:

MIS change the larger amount of data in to summarize form and
there by avoids the confusion which may arise when managers are
flooded with detailed facts.

3. MIS Encourages Decentralization:

Decentralization of authority is possibly when there is a system for
monitoring operations at lower levels. MIS is successfully used for
measuring performance and making necessary change in the
organizational plans and procedures.
Advantage of MIS
4. It brings Co-ordination:
MIS facilities integration of specialized activities by keeping
each department aware of the problem and requirements of
other departments. It connects all decision centers in the
organization.
5. It makes control easier:
MIS serves as a link between managerial planning and control.
It improves the ability of management to evaluate and
improve performance. The used computers has increased the
data processing and storage capabilities and reduced the cost.

6. MIS assembles, process, stores, Retrieves, evaluates and

disseminates the information.
Other advantages of MIS

• Better Decision Making

• Data Accessing from Remote Location
• Data Storage
• Fast Computation
• Data Security
• Data Confidentiality
• Easy Access using Non-Procedural Language
• Flexibility
• User Friendly
Factors contributing to success of MIS

If MIS is to be success, then it should have all the features listed

below: 
1. MIS is integrated into the management function. It sets clear
objectives to ensure that MIS focuses on the major issues of
the business. Also adequate development resources are
provided and human & organizational barriers to progress
are removed. 
2. An appropriate information processing technology required
to meet the data processing and analysis needs of the users
of MIS is selected. 
3. MIS is oriented, defined and designed in terms of the user's
requirements and its operational viability is ensured. 
Success of MIS

4) MIS is kept under continuous surveillance, sot that its open

system is modified according to the changing
information needs 
5) MIS focuses on results and goals, and highlights the factors
and reasons for non achievements. 
6) MIS is not allowed to end up into and information generation
mill avoiding the noise in the information and the
communication system. 
7) MIS recognizes that a manager is a human being and
therefore, the systems must consider all the human
behavioral aspects in the process of management. 
8) MIS is easy to operate and therefore, the design of MIS has
such good features which make up a user friendly design.
Success of MIS

9) MIS recognizes that the information needs become obsolete

and new needs emerge. The MIS design, therefore, has a
potential capability to quickly meet newer and newer needs
of information.

10) MIS concentrates on developing the information support to

manage critical success factors. It concentrates on the
mission critical applications serving the needs of the top
management. 
Factors contributing to Failure of MIS

1) MIS is conceived as a data processing and not as an

information system.
2) MIS does not provide that information which in needed by
managers but it tends to provide the information generally
the function calls for. MIS then becomes an impersonal
function.
3) Understanding the complexity in the business systems and
not recognizing it in the MIS design leads to problems in the
successful implementation.
4) 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 MIS.
Failure of MIS

5) MIS is developed without streamlining the transaction

processing systems in the organizations..
6) 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 role in the MIS.
7) 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.
8) A belief that the computerized MIS can solve all the
management problems of planning and control of the
business.
Failure of MIS

9) systems and procedures, wrong coding and deviating from

the system specifications result in incomplete and incorrect
information.
10) MIS does not give perfect information to all users in the
organization. Any attempt toward such a goal will be
unsuccessful because every user has a human ingenuity, bias
and certain assumptions not known to the designer. MIS
cannot make up these by providing perfect information.
Limitation of MIS

• MIS is not a substitute for effective management, which

means that it cannot replace managerial judgment in making
decisions in different functional areas. It is just a tool in the
hands of management to make decisions.

• It may not have the required flexibility to quickly update

itself with the changing needs of the time, especially in a fast-
changing business environment.

• MIS cannot provide tailor-made information

packages suitable for every type of decision made by
management.
Limitation of MIS

• MIS takes into account mainly quantitative factors, thus it

ignores the non-quantitative factors like morale and attitude
of members of the organization, which have an important
bearing on the decision making the process of executives or
senior management
• MIS is less useful for making non-programmed
decisions. Such decisions are not routine and thus require
information, which may not be available from existing MIS

• MIS effectiveness decreases due to frequent changes in top

management, organizational structure, and operational team.
Disadvantages of MIS

1. Highly sensitive requires constant monitoring.

2. Buddgeting of MIS extremely difficult.
3. Quality of outputs governed by quality of inputs.
4. Lack of flexibility to update it.
5. Effectiveness decreases due to frequent changes in top
management
6. Takes into account only qualitative factors and ignores non-
qualitative factors like morale of worker, attitude of worker
etc...