Unit-1

An Overview MIS – Meaning of Management, Information and System,

Meaning, Objectives and Classification of MIS, Framework for MIS
organization and management, Information needs and its economics, System
approach, MIS and levels of Management, MIS design, Implementation of
MIS, Approaches of MIS development and Limitations of MIS.
Introduction
Definition of MIS
A system that collects, process, stores the data and distributes information to help in
decisionmaking for managerial function. It is also defined as the integrated user machine system
forproviding information to supports the decision making operations & achieving organizational
goal.
According to Jerome “A system that aids management in making, carrying out and controlling
decisions”.
According to Kelley , “A combination of human and computer based resources which results in
collection, storage, retrieval, communication and use of efficient management of operations and for
business planning.
Management Information System (MIS) is a study of people, technology, organizations, and the
relationships among them in a broader sense. However in precise terms MIS is a software system
that focuses on the management of information technology to provide efficiency and effectiveness
or strategy decision making. The term is often used in the academic study of businesses and has
connections with other areas, such as information systems, information technology, informatics, e-
commerce and computer science.
Management Information System is an accumulation of 3 different terms as
explained below.
Information: Information simply means processed data or in the layman
language, data which can be converted into meaningful and useful form for a
specific user.
System: The system can be explained in a following ways:
System can be defined as a set of elements joined together for a common
objective.
• A group of interrelated or interacting elements forming a unified whole e.g.,
business organization as systems.
• A group of interrelated components working together towards a common
• goal by accepting input and producing output in an organized transformation
process.
Management:
We can define management in many ways like, “Manage Man Tactfully” or
Management is an art of getting things done by others. However, for the purpose
of Management Information System, management comprises the process and
activity that a manager does in the operation of their organization, i.e., to plan,
organize, direct and control operations.
Management has been defined as a process of getting things done through
others.
This process is identified in a set of functions performed by managers to
accomplish the goals. A manager is thus someone who defines, plans, guides,
helps out, and assesses the work of others, frequently people for whom the
manager is accountable in an organization. The following mentioned
management functions will involve creative problem solving.
• Planning: According to Terry and Franklin, “planning is selecting information and
making assumptions concerning the future to put together the activities necessary to
achieve organizational objectives.” Planning includes both the broadest view of the
organization, e.g., its mission, and the arrowest, e.g., a tactic for accomplishing a
specific goal.
• Organizing: Organizing is the classification and categorization of requisite objectives,
the grouping of activities needed to accomplish objectives, the assignment of each
grouping to a manager with the authority necessary to supervise it, and the provisions
for coordination horizontally and vertically in the organization structure. The focus is
on separation, coordination, and control of tasks and the flow of information inside
the organization. It is in this function that managers allocate authority to job holders.
• Directing: Direction is telling people what to accomplish and seeing that they do it to
the finest of their capability. It includes making assignments, corresponding
procedures, seeing that mistakes are corrected, providing on the job instruction and,
of course, issuing orders.” The purpose of directing is to control the behaviour of all
personnel to accomplish the organization's mission and objectives while
simultaneously helping them accomplish their own career objectives.
• Staffing: Staffing function requires recognition of human resource
needs, filling the organizational structure and keeping it filled with
competent people. This function includes recruiting, training;
evaluating and compensating are the specific activities.
• Controlling: “Control is the course of action that measures present
performance and guides it towards some predetermined goal. The
quintessence of control lies in checking existing actions against some
desired results determined in the planning process.”
Data and Information
Data
• A “given,” or fact; a number, a statement, or an image
• Represents something (quantities, actions and objects) in the real
• world
• The raw materials in the production of information
Information
• Data that have meaning within a context
• Data that has been processed into a form that is meaningful to the
• recipient and is of real or perceived value in the current or in the
• prospective actions or decisions of the recipient.
Types and classification of Information
Characteristics of Useful Information
System
• System: A set of components that work together to achieve a
common goal. Computer-based Information Systems take data as raw
material, process it, and produce information as output.
Components of an Information System
Types of Information Systems
Operational-level systems support operational managers by keeping
track of the elementary activities and transactions of the organization,
such as sales, receipts, cash deposits, payroll, credit decisions, and the
flow of materials in a factory.
Management-level systems serve the monitoring, controlling, decision-
making, and administrative activities of middle managers. The principal
question addressed by such systems is this: Are things working well?
Strategic-level systems help senior management tackle and address
strategic issues and long-term trends, both in the firm and in the
external environment.
Transaction Processing System
Transaction Processing Systems (TPS):
• Basic business systems that serve the operational level
• A computerized system that performs and records the daily routine
transactions necessary to the conduct of the business
Management Information System
Serve middle management
• Structured and semi-structured decisions
• Provide reports on firm’s current performance, based on data from TPS
• Past and Present Data
• Internal Orientation
• Provide answers to routine questions with predefined procedure for
answering them
• Typically have little analytic capability
Decision Support System
Serve middle management
• Support non-routine decision making. E.g. What is impact on production
schedule if December sales doubled?
• Often use external information as well as information from TPS and MIS
• Processing is interactive in nature
• Output in form of Decision analysis Example: Contract Cost Analysis
Executive Support Systems
Support senior management – Strategic Level
• Address non-routine decisions requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g. new tax laws or competitors) as
well as summarized information from internal MIS and DSS
• What if capabilities abound
• Input in form of Aggregate data
• Processing is interactive and output in form of projections
• Examples
• ESS that provides minute-to-minute view of firm’s financial performance as measured by
working capital, accounts receivable, accounts payable, cash
Interrelationship Among Systems
The various types of systems in the organization have
interdependencies. TPS are major producers of information
that is required by many other systems in the firm, which, in turn,
produce information for other systems. These
different types of systems are loosely coupled in most business firms,
but increasingly firms are using new
technologies to integrate information that resides in many different
systems.
MIS : Definition
• A management information system (MIS) is system of
• collecting, processing, storing, disseminating and utilizing
• data in the form of information needed to carry out the
• functions of management.
• Mis has been defined by Davis and Olson as an integrated user machine system design for providing information
to support operational control management control and decision making functions in an organization.
• Another notable definition of MIS is “ MIS is a computer based system that provides flexible and speedy access
to accurate data
• MIS support managers at different levels to take strategic (at top level) or tactical ( at middle level ) management
decisions to fulfill organizational goals.
• Nature of Management information system at different levels has different flavours and they are available in the
form of reports tables graphs and charts are in presentation format using some tools
• Management information system at the top level is much more comprehensive but is considered or summarized
compared to the infamy provided to those at metal level management management information system
panhandle unique ineffective structured reports relevant decisions of day to day operations these reports and
displays can be made available and demand.
Management Information
Systems Vs information systems
• The terms MIS and IS are often confused. IS may include systems
• that are not intended for decision making. In effect, MIS must
• not only indicate how things are going, but why they are not
• going as well as planned where that is the case
•  Information system applied to management context is called MIS.
• IS can be applied to any area of business while MIS is applicable
• for managerial decision-making.
•  IS means use of hardware and software for any business. MIS can
• be used in any form - even manual reports, which aid decisionmaking
•  MIS is used to analyze other information systems applied in
• operational activities in the organization.
•  MIS summarize and report on the company’s basic operations.
• The basic transaction data from TPS are compressed and reported
Outputs of MIS
• Scheduled reports
•  Produced periodically, or on schedule (daily,
• weekly, monthly)
•  Key Indicator Report
•  Summarizes the previous day’s critical
• activities
•  Demand Report
•  Gives certain report at manager's request
•  Exception Report
•  Automatically produced when a situation is
• unusual or requires management action
Advantages of Management Information
System
• Improved Decision-Making: MIS provides managers with timely and accurate
information, enabling them to make better-informed decisions. MIS can provide
insights into trends, patterns, and opportunities that can help managers to identify
problems, evaluate alternatives, and make the best decisions for their
organizations.
• Increased Efficiency: MIS automates many routine tasks, such as data entry,
processing, and reporting, reducing the time and effort required to perform these
tasks manually. This allows employees to focus on more valuable tasks, improving
overall efficiency and productivity.
• Improved Communication and Collaboration: MIS enables employees to share
information and collaborate more effectively, both within and between
departments. This improves communication and coordination, reducing errors and
delays and improving overall organizational performance.
• Enhanced Strategic Planning: MIS provides top-level managers with the
information they need to develop and implement effective strategic plans.
By analyzing data and information from different sources, managers can
identify opportunities and threats, evaluate different scenarios, and make
informed decisions about the future direction of their organizations.
• Competitive Advantage: MIS provide organizations with a competitive
advantage by enabling them to respond more quickly and effectively to
changes in the market and customer needs. By leveraging data and
information, organizations can identify new opportunities, develop
innovative products and services, and improve overall customer
satisfaction.
Classification of Management Information
System
• Based on the level of Management
• Based on the functional areas
• Based on the nature of the information
• Based on the mode of delivery
• Based on the organizational level
Based on the level of Management
• Management Information Systems (MIS) can be classified into three categories
based on the level of management that uses them. Some types of MIS based on
the level of management are:
• Operational MIS
It is a type of information system that supports day-to-day operational activities
and decision-making at the operational level of an organization. It provides real-
time information on operational activities such as inventory levels, order
processing, and production schedules. The main purpose of operational MIS is to
improve the efficiency, productivity, and quality of operational activities.
Some examples of operational MIS are:
• Sales and Inventory Management System
• Production Scheduling System
• Customer Service System
• Tactical MIS
It is a type of information system that supports decision-making at the
tactical or middle management level of an organization. It provides
information on key performance indicators (KPIs) such as sales, expenses,
and customer satisfaction. The main purpose of tactical MIS is to help
managers monitor performance, identify trends, and make tactical
decisions. Tactical MIS provides summarized data and reports that are used
by middle managers to monitor performance and make decisions.
Some examples of tactical MIS are:
• Supply Chain Management System
• Human Resource Management System
• Sales and Marketing System
• Strategic MIS
Strategic MIS (Management Information System) is a type of information
system that supports decision-making at the strategic level of an organization.
It provides information on the external environment, market trends, and long-
term goals of the organization. The main purpose of strategic MIS is to
help top executives make strategic decisions that shape the direction and
future of the organization. It helps in identifying new opportunities, managing
risks, and aligning resources to achieve the long-term goals of the organization.
Some examples of strategic MIS are:
• Business Intelligence System
• Enterprise Performance Management System
• Strategic Planning System
• Based on the Functional Area
• Management Information Systems (MIS) can also be classified based
on the functional areas they support. Each type of MIS supports a
different functional area of the organization and helps to improve
decision-making, increase efficiency, and optimize performance. A
well-designed MIS system should integrate all functional areas to
ensure that information flows smoothly and supports decision-making
across the organization. Some types of MIS based on their function
area are:
• Financial MIS
It provides financial data and reports to support decision-making in
financial management and accounting functions. It helps in
monitoring financial performance, analyzing financial data, and
making informed decisions on budgeting, resource allocation, and
investment. Financial MIS provides summarized data and reports on
financial transactions, assets, liabilities, and equity.
Some examples of Financial MIS are:
• General Ledger System
• Accounts Payable System
• Accounts receivable system
• Marketing MIS
It helps in monitoring marketing performance, analyzing marketing data,
and making informed decisions on product development, pricing,
promotion, and distribution. Marketing MIS provides summarized data and
reports on marketing activities such as sales, customer behavior,
advertising, and market research. It enables marketing managers to
monitor the effectiveness of marketing campaigns, identify growth
opportunities, and make informed decisions.
Some examples of marketing MIS are:
• Sales Analysis System
• Customer Relationship Management System
• Market Research System
• Manufacturing MIS
It helps in monitoring production performance, analyzing manufacturing data,
and making informed decisions on production planning, inventory management,
quality control, and resource allocation. Manufacturing MIS provides
summarized data and reports on manufacturing activities such as production
schedules, inventory levels, quality control, and resource utilization. It enables
manufacturing managers to monitor the performance of production processes,
identify areas for improvement, and make informed decisions.
Some examples of manufacturing MIS are:
• Inventory Management System
• Production Management System
• Quality Control System
• Human Resources MIS
it is a software system designed to manage human resource information and
processes within an organization. It integrates human resource management
functions such as recruitment, training, payroll, performance evaluation, and
employee benefits into a single system. It enables organizations to automate HR
processes, improve efficiency, and streamline administrative tasks. It also
provides HR professionals with access to accurate and up-to-date information on
employee data, enabling them to make informed decisions and support strategic
business goals.
Some examples of Human Resources MIS are:
• Employee Data Management System
• Compliance Management System
• Performance Management System
• Logistic MIS
It is a software system designed to manage and streamline logistics and supply
chain management processes within an organization. LMIS helps in managing
logistics operations such as procurement, transportation, inventory
management, and warehouse management. LMIS enables organizations to
automate logistics processes, improve efficiency, and reduce costs. It also
provides logistics professionals with access to accurate and up-to-date
information on inventory levels, order status, and shipping information,
enabling them to make informed decisions and support strategic business goals.
Some examples of Logistic MIS are:
• Procurement Management System
• Warehouse Management System
Based on the Nature of Information
• MIS (Management Information System) can also be classified into different types based on the
nature of the information they process and manage. Here are some types of MIS based on the
nature of information:
• Internal MIS
Internal MIS (Management Information System) refers to a system that processes and manages
information generated within an organization. Internal MIS helps organizations to manage their
internal operations by providing accurate, relevant, and timely information to support decision-
making and business operations. Internal MIS helps organizations to improve their operational
efficiency and effectiveness by providing managers and decision-makers with the information
they need to make informed decisions. By automating and streamlining internal processes,
organizations can save time and resources, reduce costs, and improve productivity.
Some examples of Internal MIS are:
• Enterprise Resource Planning
• Customer Relationship Management System
• Inventory Management System
• External MIS
External MIS (Management Information System) is a system that
processes and manages information from external sources that are
outside of an organization. The main purpose of External MIS is to
help organizations to gather, analyze, and interpret information about
the external environment to make informed decisions and gain a
competitive advantage
Some examples of External MIS are:
• Market Research Systems
• Economic Analysis System
• Social Media Monitoring System
Based on the Mode of Delivery
• MIS (Management Information System) can be classified based on the mode of delivery
of the information. Here are some types of MIS based on the mode of delivery:
• Online MIS
Online MIS (Management Information System) is a system that provides real-
time information to users through web-based applications. Online MIS enables users to
access the system from anywhere, anytime, and on any device that has an internet
connection. The system uses a client-server architecture, where the server provides data
and services, and the client accesses and interacts with the data through a web browser.
Some examples of Online MIS are:
• Business Intelligence Systems
• Dashboards
• Customer Relationship Management System
Based on the organizational level
• Transaction Processing System: TPS processes transactions and produces reports. It refers to the
automation of basic, repetitive processing that underpins business operations. It does not afford
any information to the user for his/her decision-making.
TPS uses data and produces data as proposed in the coming after or as a result of the diagram.
Previously, TPS was invited as the administration Information System. Data processing was used
by manual processes or with simple machines prior to the invention of computers. The TPS
domain is located at the bottom of an organization's management hierarchy.
• Management Information System (MIS): As MIS is a well-known information system to organize
the information, which processes data and converts it into meaningful information. A supervision
information system uses TPS for its data inputs. The information generated by the information
system may live used for sources of operations, strategic and long-range planning. Short-term
planning, supervision control, and other managerial problem solving encompass processing in
assist of a wide range of organizational functions & management processes. MIS is capable of
providing analysis, planning & decision developing support. Marketing, manufacturing, human
resources, finance, and accounting are some of the functional areas of a company.
• Decision Support System (DSS): A decision help system (DSS) is an information system
a formal request to be considered for a position or to be allowed to do or have
something. That assists decision-making. DSS be inclined with planning, analyzing
alternatives, and trial and error search for the solution. The elements of the decision
support system include a database & software. Finance, Production, and marketing are
some of the main application areas of DSS.
Based on how information is processed, DSS can be distinguished from MIS. MIS
processes data to restyle it into information. DSS processes information to support the
decision creating process of a manager.
• Executive Support System (ESS): Executive Support System (ESS) is a reference of the
management information system, which is a special kind of DSS; An ESS is specially
tailored for the ownership of the chief executive of an association to support his
decision-making. It includes various types of decision-making but it is more specific and
adult-oriented.
• Office Automation Systems (OAS): Office automation is referenced to the application of computes
and communication technology to office functions. Office automation systems are meant to
improvements the productivity of frameworks at various levels of management by providing
secretarial assistance and better communication facilities.
Below mentioned are the two main classes to categories Office activities, namelyActivities executed
by clerical staff like clerks, secretaries, typist etc
• Activities performed by the executives (managers, engineers or other experienced like economist,
researches etc.)
• The major functional activities of OAS are -
• Typing
• Mailing
• Scheduling of meetings and conferences,
• Calendar keeping, and
• Retrieving documents
• Below is a list of activities in the moment category (managerial category)
• Conferencing.
• Controlling output and producing information (messages, memos, reports, and so on).
• An individual who is employed in or trained for a job is referred to as a
businessperson. Systems: These systems are one of the leading types of knowledge-
based information systems. These systems are based on artificial intelligence, and
are contemporary information systems. A business professional system is a strategic
based information system that uses its strategic about a specific, complex application
area to act as an expert. The main components of a professional system are:
• Knowledge Base
• Interface Engine
• User Interface
Framework for Management
Information Systems
What is Framework?
• A framework is a brief set of ideas for organizing a thought process
about a particular type of thing or situation. Any useful framework
helps make sense of the world’s complexity by identifying topics that
should be considered and showing how these topics are related.

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 The Gorry and Scott-Morton Framework
for Management Information Systems
• This framework was first discussed in 1971. The term Management
Information Systems refers to the broad category we now refer to simply
as Information Systems.
• At the time, (1971), the framework provided a much needed perspective
on the role of MIS in organizations.
• It is more a framework on managerial activities and a way of looking at
decisions in an organizations. The framework helps us understand the
role of MIS in organizations.
• Focuses on the nature and characteristics of managerial decisions made
at different levels in an organization.
• Also Focuses on the characteristics of information that pertains to the
decisions made at these levels 43
 Structural Outline
• Combines the works of Robert Anthony and Herbert Simon
• Robert Anthony’s taxonomy for Managerial Activity (1965).
• Herbert Simon’s Categorization of Decision Types (1960).
• The works of Anthony and Simon are important foundations of
Organizational Theory today.

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 Information Requirements by
Management Level
Characteristics Operational Management Strategic
of Information Control Control Planning
Source Largely Internal Internal and
Largely External
Scope Well defined, Very wide
narrow
Level of Detailed Aggregate
Aggregation
Time Horizon Historical Future

Currency Highly current Need not be up to

the minute
Required High Lower, Estimates
Accuracy are acceptable
Frequency of Use Very frequent Infrequent, ad-hoc
 A FRAMEWORK FOR DECISION MAKING

Type of Operational Management Strategic Planning Support Needed

Decision/Task Control Control
1 2 3
Structured Inventory reordering Budget Analysis, Plant Location, Clerical, MIS, OR
short-term forecasting, Financial Models, Transaction
Make or Buy Analysis Management Processing Systems
(investment),
Distribution Systems.

4 5 6
Semi- Bond trading, Credit Evaluation, Building New Plant, Decision Support
structured Production Scheduling Budget Preparation, Mergers & Systems
Plant Layout, Project Acquisitions, New
Scheduling, Reward Product Planning,
Systems Design Compensation
Planning, Quality
Assurance Planning
7 8 9
Selecting a Cover for a Negotiating, Recruiting R & D Planning, Human Intuition,
Unstructured Magazine, Approving Executives, Lobbying Expert Systems,
Loans, Buying Software
New Technology Executive Support Systems
Development, Social
Responsibility
Planning

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Need of MIS(Management Information
System)

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Need of MIS(Management Information
System)

1.Flexibility and Ease of Use:

The MIS is designed flexible enough to accommodate new requirements.
system is easy to operate so that not much computer skills are required on the
part of the user to access databases.

2.Common Databases:
MIS stores transaction data for present and future uses. Application--ess
this database for relevant data to process transaction or to generate
information1e system maintains general databases so that any functional
subsystem can access the database
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