MIS & DSS

MANAGEMENT INFORMATION SYSTEM AND DECISION SUPPORT SYSTEM

Today the need for an updated information has become inevitable to arrive at an effective decision
in all walks of life. Whether it is industry, commerce, defence, banking, education, economics or
politics, information is needed everywhere. A significant part of an executive's working and
personal time is spent on recording, searching, absorbing and communicating information.

Information is 'live' as it is required to be updated all the time and is renewable. It is substitutable
and transportable and can be made to travel. The all round exponential growth of information
makes it necessary that information is collected, stored and retrieved in various fields so that it
could be usefully exploited as and when needed. For example : (a) In setting up a new industry,
information regarding the choice of technology (methods), skill (manpower), money and material
becomes an important requirement for its growth and smooth functioning. In the absence of such
information the proposed industry becomes sick over a period of time; (b) In a competitive market,
before deciding about the price of an item, the producer needs information about the pricing policy
of the competitors, specially of competitive products, sales techniques, etc. to effectively combat
the effect of competition; and (c) In defence, considerable amount of money is spent in gathering
information (intelligence) from all possible sources.
 MIS

The Management Information System (MIS) is an integrated man-machine system that provides
information to support the planning and control functions of managers in an organization.
MIS can also be defined as the combination of human and computer-based resources that
results in the collection, storage, retrieval, communication and use of data for efficient
management of operations and for business planning.
 MANAGEMENT

 Management is art of getting things done.

 Management can be defined as a process of getting the work or the task done that
is required for achieving the goals of an organisation in an efficient and effective
manner.
 Management (or managing) is the administration of organizations, whether they
are a business, a nonprofit organization, or a government body
 Management is how businesses organize and direct workflow, operations, and
employees to meet company goals.
 INFORMATION

 Information is data that has been processed into meaningful data to the user.

 Characteristics of Information : Relevance, Timeliness, Accuracy , completeness, easy to

access
 SYSTEM

 Systems are all around us.

 We live in systems, work in systems, function in systems, adhere to systems and in fact,
are also made up of systems.
 Our body itself is made up of several systems, like the respiratory system, endocrine
system, etc.
 The planet in which we live is itself a part of the solar system which has the Sun at the
centre.
 Organizations in which we work are systems (business systems) and indeed have
several subsystems.
 In short, we live in a systems world. It is therefore important to understand the meaning
• Systems and its management have today become a major objective in business
management. Business systems in general and information systems in particular have
become a major area of study and development. With the ever increasing competition
and changing market place, managers depend more and more on their systems for
decision- making.

• The need for analysis, conceptualization, design, creation, implementation and smooth
functioning of systems is today a major subject of study.

• System can be defined as a set of interacting entities with

interrelationships/interconnections amongst each other forming an
integrated whole.
• Most systems have at least one input and one output through which the system would
interact with the environment
 DECISION MAKING

• Decision-making is future oriented, as the sole objective of making a decision is to

guide organisational and human activities towards achieving the future objectives.
• In organisations, decisions are required to be taken to either solve problems or
achieve certain results.
• Decision-making process involves investing the organisational resources in realising a
predetermined goal or solving a problem by following a specific course of action.
• A decision is an end result that achieved by analysing the situation, formulating
alternative solutions and selecting the best one for achieving the desired results
 DECISION MAKING DEFINITIONS

• A Decision is one where there are different things we can do and you have to pick
one of them.
• Decision can be defined as the process of examining the available options,
comparing them, and choosing the best course of action.
• According to George R. Terry, "Decision-making is the selection based on certain
criteria from two or more alternatives"
• According to Mary Cushing Niles, "Decision-making takes place in adopting the
objectives and choosing the means and again when a change in the situation
creates a necessity for adjustments."
• According to Heinz Weihrich and Harold Koontz, "Decision-making is defined as
DECISION MAKING PROCESS
• Step 1: Definition of the Problem: Decision-making process is
conducted either to solve a problem or to achieve some goal. Hence,
identifying the problem or the objective is the starting point of
arriving at a decision. While defining the problem, it is the
responsibility of the decision-maker to identify in detail the possible
alternatives to the problem in structured format.

• Step 2: Collection of Data: After the problem has been defined, the
next step is to collect the required data for evaluating the problem.
Correct and accurate data is the basis of sound decision-making.
Data on the issue at hand gives a total and complete picture and
enables correct and proper evaluation and the tight choice of
alternatives. Data is either obtained from internal sources or external
sources like reports, journals, sales trends, etc. However, it has to be
ensured that the data collected is relevant, reliable and up-to-date.
There are certain problems for which relevant data may not be
available. In such cases, primary data should be collected for proper
Step 3: Formulation of a Model: Models help in evaluating alternatives.
Based on the data available and possible scenarios, various alternative
models are prepared to get a real life feel and arrive at the best choice.
The decision-maker must try to establish a relationship between several
alternatives for visualising different outcomes. In several scenarios,
models are a very effective tool for arriving at a decision.

Step 4: Evaluation: In the previous step the models were formulated and
evaluated on the basis of hypothetical variables. But in this step the
decision-maker must analyse the model on the basis of realistic
components. Here the model and its assumptions are put to a reality
check for evaluating their utility and feasibility.
Step 6: Follow-up Actions: Perhaps the most important consideration in
arriving at a decision is anticipating its likely impact or reaction on the
concerned areas. Hence, the decision-maker must have follow-up plans or
strategies for dealing with the reactions of implementing the selected
decision. Strategies to counter the reactions, both immediate and long
term have to be put in place. Decision-making is termed as a continuous
process as one decision often leads to a state where further decisions are
required to be made.
 TYPES OF DECISIONS

Although decision-making is one of the most significant functions of a manager, not all
decisions are equally important or significant. Some have a limited impact, while others
have far reaching impact. Different types of management decisions are as follows:

1. Programmed decisions: These are the types of decisions that keep repeating and
also follow some rules and guidelines. Ex. Raw material reorder
2. Non programmed decision: non-programmed decisions need creativity and deep
thought, and they usually deal with complicated situations. With nonprogrammed
decisions, information is more likely to be ambiguous or incomplete, and the decision
maker may need to exercise some thoughtful judgment and creative thinking to reach
a good solution. These are also sometimes referred to as nonroutine decisions or
as high-involvement decisions because they require greater involvement and thought
on the part of the decision maker. For example, consider a manager trying to decide
whether or not to adopt a new technology.
 MAJOR AND MINOR PROJECT

Major and Minor Decisions: Decisions can also be major or minor.

Major decisions are those that carry a high risk or involve a heavy cost,
e.g., opening a new factory. Decisions are termed as minor when they
involve low risk or low cost, e.g., replenishment of cleaning supplies in
the organisation. They are generally taken by the low level
management.
Major decisions are made up by the top management.
Minor decisions are made by the lower level management.
 INDIVIDUAL AND GROUP DECISIONS

Individual and Group Decisions: As the name implies, individual

decisions are taken by individuals on the basis of rules, procedures,
policies and standard operating procedures of the organisation. These low
risk and low cost decisions can be easily evaluated by the decision-
maker. Decisions that require due deliberation and diligence are known as
group decisions. They are generally taken by the Board members or a
specially formulated committee. They are extremely significant for the
success of the organisation and require willing involvement of the group
members.
Ex. A group of managers at a company decides whether to outsource a
product.
 ROUTINE AND STRATEGIC DECISIONS

Routine and Strategic Decisions: Routine decisions are those common

day to day decisions that do not require any great evaluation or
deliberation. Being low on risk, they also do not involve any substantial
cost. They do not require a lot of time and are monotonous in nature.
Strategic decisions are also known as basic decisions and involve high risk
and cost. They are related to the formulation and implementation of
strategies and policies. They are non- monotonous in nature and are taken
keeping in mind a particular problem or situation. Such vital decisions are
in the hands of the top management
 MANAGERIAL DECISION MAKING

Management decision-making identifies problems, evaluates alternatives,

and makes choices to attain organizational goals. It's a crucial aspect of
running a business or organization effectively, as management decisions
can significantly impact various aspects such as operations, finances,
human resources, and overall performance.
It is important to recognize that managers are continually making
decisions, and that the quality of their decision-making has an impact-
sometimes quite significant -on the effectiveness of the organization and
its stakeholders. Stakeholders are all the individuals or groups that are
affected by an organization (such as customers, employees, shareholders,
etc.).
Members of the top management team regularly make decisions that
affect the future of the organization and all its stakeholders, such as
deciding whether to pursue a new technology or product line. A good
decision can enable the organization to thrive and survive long-term,
while a poor decision can lead a business into bankruptcy.

Managers at lower levels of the organization generally have a smaller

impact on the organization's survival, but can still have a tremendous
impact on their department and its workers. Consider, for example, a
first-line supervisor who is charged with scheduling workers and ordering
raw materials for her department. Poor decision-making by lower-level
managers is unlikely to drive the entire firm out of existence, but it can
lead to many adverse outcomes
Factors that affect Managerial Decision making
A firm is always surrounded by internal environment and external
environment.
Organizational Culture: The organization's values, beliefs, and norms can
influence decision-making processes.
Organizational Structure: The hierarchy, division of labor, and
communication channels affect how decisions are made and
implemented.
Resources: The availability of financial, human, and technological
resources can limit or expand decision-making options.
Leadership Style: The leadership approach of top management influences
decision-making processes and outcomes.
Externally, Economic Conditions: Factors such as inflation, unemployment rates, and GDP
growth can impact decision-making, especially in areas like budgeting and investment.

Market Conditions: Customer preferences, competition, and industry trends affect

decisions related to marketing, pricing, and product development.

Legal and Regulatory Environment: Laws and regulations at local, national, and
international levels influence decisions regarding compliance, risk management, and
business operations.

Technological Changes: Advances in technology can create opportunities or threats that

require managerial decisions related to innovation, automation, and digital
transformation.

Political Environment: Government policies, stability, and geopolitical factors can affect
decision-making, particularly in international expansion and trade.

Decision-Maker Characteristics: Personal traits, experiences, biases, and cognitive

limitations can influence how managers perceive and analyze information, leading to
different decision outcomes.
 INFORMATION – A QUALITY PRODUCT

Previously information was thought of as a by product of business activities.

Most recently information has become a very important component of the organisation.
The quality of information is high, if it creates managerial impact leading to attention,
quality decisions.
the quality of information is measured in four dimensions:
• Utility
• Satisfaction
• Error and biases
Utility dimension has 4 facets:
They are form, the time, the access and the posession
If the information is presented in a form the manager requires, then its
utility increases.
If the information is available when needed, its utility increases.
If the information is easily and quickly accessible, its utility is high.
If the information is possessed by the manager who needs it, its utility is
the highest.
Satisfaction: one of the common key of measuring the utility of
information is satisfaction of the decision maker.
The degree of satisfaction would determine the quality of information.
The users of the same information could be different users in the
organisation.
If the organisation has high degree of satisfaction, then we can say that
the information systems are designed properly to meet the information
needs of the managers at all levels
 ERROR AND BIAS

It is the third dimension of the quality of information. The errors creep in because of a
number of factors like :
• An incorrect data measurement
• An incorrect data collection method.
• Loss of data or incomplete data
• Poor data validation and control systems
• A deliberate falsification
The processing of data for information should be allowed only after a thorough validation
of the transactions and the contents, as a whole, on a logical plane.
Care should be taken that the data is processed only after ensuring the correctness of
the data in the terms of number of documents.
The data should be checked against the master data wherever possible
Measures such as system auditing, the use of test data and conducting a physical audit
of the record versus the reality would help considerably to control the errors arising out
of wrong processing
 ITES –INFORMATION TECHNOLOGY ENABLED
SERVICES
WEB ENABLED SERVICES OR REMOTE SERVICES
• ITES is a term that refers to the use of information technology (IT) to deliver a range
of services to businesses and organizations. It includes a wide range of activities.
• ITES includes a variety of business processes that are delivered electronically or
through the use of IT tools and platforms.
• Information Technology Enabled Services (ITES) refers to a broad category of
business activities that involve the use of information technology (IT) to enable and
enhance the delivery of services.
• The history of ITES can be traced back to the early days of computing, when
organizations began using computers to automate and streamline their operations. In
the 1960s and 1970s, companies started using computers to process data and
perform other routine tasks, such as payroll and accounting. This led to the
development of the business process outsourcing (BPO) industry, where companies
outsourced these types of tasks to specialized service providers.
ITES are Information Technology that enables the
business by improving the quality of service is IT-
enabled services.
• Call centers
• E- governance
• Data management
• Data digitization
• Website services.
A call center is a customer
service that handles all
types of customer inquiries,
complaints, and orders, as
well as chat and email
support.
• A call center is sometimes defined as a telephone
based shared service center for specific customer
activities and are used for number of customer-
related functions like marketing, selling,
information transfer, advice, technical support and
so on.
• A call center has adequate telecom facilities,
trained consultants, access to wide database,
Internet and other on-line information support to
provide information and support services to
customers.
• It operates to provide round the clock and year
round service i.e.24 x 365 service.
• Computers help us to look
at government websites
and the services provided
by them.
• The various websites
provided by the
government give the
details about the
departments, specific
functions, special schemes,
documents, contacts, links,
IAS intranet, site map,
search, what's new, press
releases, feedback.
• The basic purpose of e- governance is to simplify
processes for all.i.e. government , citizens,
businesses.
• In short, it is the use of electronic means, to promote
good governance. It connotes the implementation of
information technology in the government processes
and functions so as to cause simple, moral,
Accountable and transparent governance. It entails
the access and Delivery of government services,
dissemination of information. Communication in a
quick and efficient manner.
Data Management
• Data Management is a category of IT Enabled Services
pertaining to collection, digitization and processing of data
coming from various sources.
• Traditional data processing services comprise punching data
from manually filled forms, images or publications; preparing
databases and putting them together.
• However, with the advent of multimedia and internet, sources
have increased to include manually printed documents,
images, sounds and video.
• Equally diverse are the new output media which include
databases on servers, hard copy publications, CD-ROM
records emanating from internet based queries.
DATA DIGITIZATION
• Digitization refers to the conversion of non-digital material to digital
form. A wide variety of materials as diverse as maps, manuscripts,
moving images and sound may be digitized.
• Data digitization is the process of taking data that exists in a digital
format and making it more accessible and useful for the business.
Digitalization can make data more accessible and useful by making it
easier to search, sort, and analyze. It can also make data more portable
and shareable.
• One of the key benefits of digitization is that it can make it much easier
to store, search, and share the data. Once data is in a digital format, it
can be easily copied and transferred to other devices or computers.
Additionally, digital data can be compressed, which takes up less space
than analog data.
• Another benefit of digitization is that it can make it easier to analyze and
process data. For example, if you have a large database of customer
information, you can use software to quickly analyze this data and
generate reports.
 E-BUSINESS

• E-business, or electronic business, refers to conducting business

activities using electronic technology. This includes various online
transactions such as buying and selling products and services over the
internet. With the rapid growth of technology and the internet, e-
business has become an essential part of modern-day commerce.
• E-business, short for electronic business, encompasses all commercial
activities conducted through computer-mediated networks. This
includes online sales, customer support, marketing campaigns, and
supply chain management, among others. It enables organisations,
regardless of size or type (for-profit, governmental, nonprofit), to
streamline operations and reach global markets efficiently. With the
widespread adoption of internet technologies, e-business has become
integral to modern commerce, offering accessibility and cost-
• E-business or Online business means business transactions that take
place online with the help of the internet. The term e-business came into
existence in the year 1996. E-business is an abbreviation for electronic
business. So the buyer and the seller don’t meet personally.
• Advantages of e business
 INFORMATION SYSTEMS

• Information systems are an integrated set of components used for

gathering, processing, storing and communicating multiple types of
information for improved organisational efficiency.
• The different types of information systems are divided and classified
according to their level in the organization and can be visualized in
that of a pyramid model (see illustration).
• Each system level focuses on the type of data and how it is to be used
within the organization. Starting with this entry and the next four,
these levels will be briefly discussed as to their basic function, some
examples of systems and their possible role within the system level.
• The levels that will be discussed are, from bottom to top, the
Operational level, Managerial level and Strategic level.
• The base of the pyramid, the Operational level, the information a
system is a Transactional Processing System (TPS) generally focused on
data processing and is used by lower level employees as well as some
supervisory levels.

• At the middle of the pyramid is the Managerial (Tactical) level system

which is comprised of Management Information Systems (MIS) and
Decision Support Systems (DSS). These generally focus on gleaning
information for short term to medium term projects by evaluating the
organizations performance.

• Lastly, at the top of the pyramid, the Strategic levels use Executive
Support Systems (ESS) and can also be termed Executive Information
Systems (EIS). These are executive and senior management level
systems that allow for the analyzation of how the organization is
operating giving the users to evaluate the past performance and plan
 TPS

• A transaction processing system (TPS) is a type of data management

information-processing software used during a business transaction to
manage the collection and retrieval of both customer and business
data.
• TPS records every sale, updating inventory, managing accounts
payable, and ensuring smooth financial flow.
• Data storage is a key activity within a TPS, ensuring that all
transaction data is securely kept and easily accessible. These data
transactions are crucial for the fundamental operations of an
organization, involving recording, retrieving, and modifying data. For
example, when you make a purchase online, the TPS processes your
order, updates the inventory, and credits the seller’s account.