The Basic characteristics of an effective Management Information System are as follows:

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 ie top! middle and lower
level
II. Management directed: "hen MIS is management#oriented! it should be directed by the
management because it is the management who tells their needs and re$uirements 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 e%ercise 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 &evelopment 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 duplicacy and redundancy in data
collection! storage and processing 'or e%ample! the customer orders are the basis for
many activities in an organization viz billing! sales for cashing! etc &ata 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 e%ercise It
usually takes ( to ) years and sometimes a much longer period So the system e%pert has
to keep * 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 that his MIS will not be
obsolete before it gets into action
VI. Sub System concept: "hen a problem is seen in * sub parts! then the better solution to
the problem is possible -lthough 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 .riorities will be set and phase of implementation will
be made easy "hile 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 /ommon database means a 0Super file or Master file1 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 $ueries can be handled
more $uickly and efficiently with the computerized MIS The other benefits are accuracy!
storage capacity and timely information
IX. User friendly/le!ibility: -n MIS should be fle%ible ie there should be room for
further modification because the MIS takes much time in preparation and our
environment is dynamic in natureMIS should be such that it should be used
independently by the end user so that they do not depend on the e%perts
X. Information as a resource: Information is the major ingredient of any MIS So! an MIS
should be treated as a resource and managed properly
Structure of MIS
MIS for decision ma"ing:
&ecision making can be classified into two types:
2 Structured! programmable decisions
"hen a decision can be programmed! an organization can prepare a decision rule or a decision
procedure This can be e%pressed as a set of steps to follow! a flowchart! a decision table! or a
formula The decision procedure will also specify the information to be ac$uired before the
decision rules are applied Since structured programmable decisions can be pre specified! many
of these decisions can be handled by lower level personal with little specialized knowledge This
procedure can also be completely automated although human review may be re$uired The
process of structured decision making includes entering the re$uired input data! validation
procedure to check the input! processing of the input using decision logic and output of the
programmed decision in a form that is useful for action
* 3nstructured! non programmable decisions
The unstructured decision has no pre#established decision procedure either because the decision
is too in fre$uent to justify the cost involves in preparing the decision procedure! or because the
decision process in not understood well enough! or is too changeable to establish a decision
procedure The support re$uirements for an unstructured decision making include access to data
and a variety of analysis 4 decision procedures The data re$uirements are not completely know
in advance hence data retrieval must allow ad hoc retrieval re$uests
MIS Structure based on Management activity:
MIS supports management activities This means that the structure of an information system can
be classified in terms of hierarchy of management planning and control activities
5ierarchy of Management activities +
1. Strategic .lanning + &efinition of goals! policies! objectives and general guidelines for an
organization
* Management control and tactical planning + -c$uisition of resources! tactics! plant
location! new products 6stablishment and monitoring of budgets
( 7perational planning and control + 6ffective and efficient use of e%isting facilities and
resources to carry out activities within budget constraints
The following ( sections summarize the characteristics of information system support for the (
levels of hierarchy of Management planning and control
1. 7perational /ontrol + This is a process of ensuring that the operational activities are
carried out effectively and efficiently - large 8 of decisions are programmable and the
procedure used is $uite stable It makes use of pre#established procedures and decision
rules Individual transactions are often important9 hence the system must be able to
respond to both individual transactions and summaries of transactions The data re$uired
for this process is generally current and the se$uence of processing is often significant
.rocessing support for operational control consists of
# Transaction processing + Inventory withdrawal transaction can e%amine balance on
hand! calculate order $uantity! produce action document
# 6n$uiry processing + -n en$uiry for personal files describing the re$uirement for a
position
# :eport processing + - report showing orders still outstanding after (; days
2. Management /ontrol + This system is re$uired by managers of departments! profit
centers to measure performance! decision on control actions! formulate new decision
rules and allocate resources Summary information is needed and it must be processed so
that trends may be observed! reasons for performance variations and solutions may be
suggested
The control process re$uires the following types of information:
# .lanned performance + To assist managers in finding problems and reviewing plans
and budgets It projects the effect of current action
# <ariance from planned performance + This report shows performance and variations
from planned performance
# .roblem analysis models to analyze data to provide input for decision making
# &ecision models to analyze a problem situation and provide possible solutions
# In$uiry model to provide assistance to en$uiries
3. Strategic .lanning + The purpose of strategic planning is to develop strategies by which
an organization will be able to achieve its objectives These activities do not occur on a
periodic basis &ata re$uired for strategic planning are generally for processed
summarized data from a variety of sources Information system support can provide
substantial aid to the process of strategic planning
# 6valuation of current capabilities based on internal data
# Internal projection of future capabilities by analyzing past data
# 'undamental market data on the industry and the competitors
# &atabanks of public information regarding industry and competitors
MIS structure based on #rganizational functions:
The structure of information system can also be described in terms of organizational functions
which use information There are no standard classifications of functions but a typical set of
functions in an organization includes .roduction! Sales 4 Marketing! 'inance 4 -ccounting!
=ogistics and .ersonal information system Top management can also be considered as a
separate function 6ach of these functions has uni$ue information needs and each re$uires
information system support designed for it
1. Sales 4 Marketing + The transactions involved in this subsystem are Sales order!
promotion order! etc 7perational activities include hiring and training of sales force! day
to day scheduling of sales and promotion effort! periodic analysis of sales volume by
region! product! customer! etc Managerial control concerns comparison of overall
performance against planned Strategic planning involves new markets and marketing
strategies
2. .roduction + It includes planning! scheduling and operation of production facility!
employment and training of production personnel! $uality control and inspection
Transactions include production order! assembly order! finished parts tickets! scrap
tickets 7perational control re$uires reports comparing actual performance to the
production schedule Management control re$uires summary report comparing oval
planned performance to standard performance Strategic planning includes alternative
manufacturing approach and approach to automation
3. =ogistics + Transaction process includes purchase! manufacturing and receiving report
Tickets for inventory! shipping and orders 7perational control includes past#due
purchases! shipment! out of stock items Strategic planning involves analysis of new
distribution strategy! policies! etc
4. 'inance 4 -ccounting + Transaction involves credit applications! sales! payment
vouchers! checks! ledgers! stock transfer! etc 7perations include e%ception reports!
records of processing delays and reports of unprocessed transactions Managerial control
utilizes information on budget vs actual costs of financial resources and processing
accounting data Strategic planning includes accounting policies for minimizing ta%
impact! long run strategies to ensure ade$uate financing
Conceptual Structure
The conceptual structure of an information system consists of a group of information subsystems
for different functions 6ach subsystem provides support for transaction processing! operational
control! management control and strategic planning The conceptual structure includes some
uni$ue files for each subsystem plus a common database There is uni$ue software for each
subsystem and there is common software used by all subsystems! ie a data management system!
some software routines! planning 4 decision models
$%ysical Structure
The actual organizational information system will defer from the above model because certain
elements are not cost justified The physical structure of an information system is affected by the
use of common modules for many processing operations It is designed as an informational
system with a number of small sets of processing instructions called modules These modules can
be written and tested separately allowing more efficient maintenance by identification of the
boundaries of the module being changed