Information processing is a major societal activity. A significant part of an individual's ‘working and personal time is spent recording. searching for, and absorbing information. ‘As much as 80 percent of a typical executive s time is spent in the processing and communication of information. More than 50 percent of the United States work force is employed in jobs that primarily involve some form of information processing. A large proportion of these employees are “*knowledge workers"; their duties involve the production and use of information outputs—documents, reports, analyses, plans, etc ‘Computers have becorne an essential part of organizational information processing because of the power of the technology and the volum of data to be processed. The application of computers to information processing began in 1954 when one of the first computers was programmed to process payroll. Today, computerized processing of transaction data is a routine activity of large organizations. Morcover, the capability 10 automate information processing has permitted an expansion in the scope of formalized organizational information use. The current challenge in information processing is to use the capabilities of computers to support knowledge work, including managerial activities and decision making. The wide variety of computer resources to perform transaction processing, to provide processing for a formal information and reporting system, and to accomplish managerial-decision support are broadly classified as the organization's management information system or MIS. ‘The focus of this text is management information systems rather than routine data processing. MIS is a broad concept rather than a single system. Some MIS activities are highly integrated with routine data processing, while other MIS applications are designed for a particular knowledge work activity or decision-making function. The office use of computer and communication technology to support person-to-person communications and clerical support functions is also included in this text as part of ‘management information systems. ‘The design and implementation of management information systems in an organiza- tion necessitates the identification of information requirements. The requirements for routine transaction processing tend to be stable and relatively easy to identify; information requirements for management and decision making activities are more changeable and more difficult to define. The content of this text is useful both for those wno design, implement, and manage information systems and for those who specify information requirements and use the systems. The text can help systems analysts to understand the structure of a management information system and the type of requirements to be included; it can aid information systems executives in planning and management; it can help users to understand how their information requirements fit into the system and how to analyze and formulate those requirements. It can also aid users who develop their own systems.DEFINITION OF A MANAGEMENT INFORMATION SYSTEM ‘There is no consensus on the definition of the term "‘management information system.”” ‘Some writers prefer alternative terminology such as “‘information processing system, “‘information and decision system," ‘organizational information system,” or simply formation system'” to refer to the computer-based information processing system which supports the operations, management, and decision-making functions of an organization. This text uses "MIS" because itis descriptive and generally understood; it also frequently uses “‘information system” instead of ‘“MIS"* to refer to an organiza- tional information system. A definition of a management information system, as the term is generally understood, is an integrated, user-machine system for providing information 10 support operations, management, and decision-making functions in an organization, The system uilizes computer hardware and software; manual procedures; models for analysis, planning, control and decision making; and a database The fact that itis an integrated system does not mean that it is a single, monolithic structure: rather, it means that the parts fit into an overall design. The elements of the definition are highlighted below. DEFINITION OF A MANAGEMENT INFORMATION SYSTEM _—-Aeenesragerent inforration system is © An integrated user-raachine system ‘© For providing information ‘= To support the operations, management, analysis, and decision-making functions In an organization The system uiiizes ‘© Computer hardware and softwere » Manual procodures ‘Models for analysis, planning, control, and decision making, and database ‘The management information system has been described as a pyramid structure (Figure 1-2) in which the bottom layer consists of information for transaction processing, status inquiries, etc.; the next level consists of information resources in support of day- to-day operations and control; the third level consists of information system resources to aid in tactical planning and decision making for management control; and the top level consists of information resources to support strategic planning and policy making by higher levels of management. Each level of information processing may make use of data provided for lower levels; but new data may also be introduced. For example, some of the information to support management and decision making is provided by the data ‘obtained for transaction processing, while some may be new data about activities external to the organization.Integrated System Management information systems typically provide the basis for integration of organiza- tional information processing. Individual applications within information systems are developed for and by diverse sets of users. If there are no integrating processes and mechanisms, the individual applications may be inconsistent and incompatible. Data items may be specified differently and may not be compatible across applications that use the same data. There may be redundant development of separate applications when actually a single application could serve more than one need. A user wanting to perform analysis using data from two different applications may find the task very difficult and sometimes impossible. The first step in integration of diverse information system applications is an overall information system plan. Even though application systems are implemented one at 2 time, their design can be guided by the overall plan, which determines how they fit in with other functions. In essence, the information system is designed as a planned federation of small systems. Information system integration is also achieved through standards, guidelines, and procedures set by the MIS function. The enforcement of such standards and procedures permits diverse applications to share data, meet audit and control requirements, and be shared by multiple users. For instance, an application may be developed to nin on a particular small computer. Standards for integration may dictate that the equipment communication with the centralized database. ‘The trend in information system design is toward separate application processing from the data used to support it. The separate database is the mechanism by which data items are integrated across many applications and made consistently available to a variety of users. The need for a database in MIS is discussed below.