MIS Essentials PDF

Unit 2:
MIS & its Implementation- Essential

Understanding
•Two perspectives/ definitions of MIS
•MIS Levels
•Objectives/ Role of MIS in an organisation
•Three forms of MIS & their purpose in a Firm
•Benefits from an Effective MIS
•MIS Components/ Environment
•CSFs for MIS Development/ Implementation
•Putting Info Systems in place: 3 distinct approaches
Presentation content & material developed for exclusive use by V. Mohan. All rights reserved. No unauthorised copying or usage permitted. 1
MIS- 2 Perspectives/ Definitions
MIS is a subset of MSS MIS is synonymous with MSS
(Management Support Systems): (Management Support Systems):
A traditional & narrower view which has A modern & comprehensive view, in which the term
been (& still is) in existence: MIS includes IS such as EIS & DSS, which can go
beyond merely providing Information, into its deeper
A system using IT/ ICT, to generate &
analysis, generating & evaluating decision
make available, all Information
alternatives and recommending a decision. The role
required by personnel (supervisors
of MIS is to actively support the entire process of
& managers) in all functions and at all
decision-making; not merely facilitate the 1st step of
levels in the Firm, to effectively run
providing Information/ Intelligence:
day-to-day operations, effectively
control the organisation as a whole & A system using IT/ ICT, to generate & make
its performance. available, all Information required by personnel
(supervisors & managers) in all functions and at all
Info Systems like EIS & DSS are viewed levels in the Firm, along with additional analysis &
as distinct from MIS. Role of MIS in decision-making support, as required, to effectively
decision-making is to provide run day-to-day operations, effectively control the
Information/ Intelligence effectively, for organisation as a whole & its performance and
users to execute further activities & implement effective future strategies to grow the
reach decisions. business & its competitive edge, through decisions
that are significantly rational/ objective.
MIS Levels
Since MIS caters to supervisors & managers at all levels, 3 levels of MIS can be
conceived, in sync with the Management pyramid:
In-depth analysis of both internal

Strategic & external Data & Information, for
Top decisions related to longer-term
Mgt. strategic objectives/ goals.
Decision-
Periodic performance analysis Making
Middle & Tactical/ (Planned vs. Actual), for Support
Senior Control operations control decisions to at all the
Mgt. meet medium term goals. Management
levels
Lower Mgt. Exception reports/ alerts on
(Supervisors/ process malfunctions, for
Operational immediate corrective action,
1st Level Managers)
manual/ automated.
MIS Objectives/ Role in a Firm
Based on the modern & comprehensive perspective/ definition, MIS plays a very critical role in
any business organisation, at all levels of management and across all functions/ departments.
The role of a comprehensive & effective MIS in a Firm is to facilitate 4 goals/ objectives:
1. Day-to-day Control of Operations & Business Processes:
All business functions / departments (sales, marketing, customer service, finance,
procurement, inventory, order processing, manufacturing etc.) must be efficient &
run smoothly. In this regard, timely alerts & exception reports about “something
going wrong” is necessary, for first line supervisors / managers, to facilitate
immediate corrective decisions & actions, as required. Brings a process/
system back to “normal” functioning.
Some examples:
•Delay in response to a Sales Enquiry/ Request for Quote
•Delivery delay
•A huge amount Invoice payment delayed past due date
•Significant delay in delivery
•A critical machine in the plant being unproductive/ under maintenance
2. Monitor Performance of Business Functions Periodically:
Actual performance of a business function/ process such as Sales, Marketing, Accounting,
Inventory Control, Procurement, etc. is determined for a defined time period, by computing
performance related information, from all the relevant transactions in that period, for that
function/ process. This is compared with preset performance levels (Targets), to bring out
performance deviations & related analysis, for functional managers to take corrective decision
& actions as required, to reduce/ eliminate the same over time. For middle/ senior
management; decisions are Tactical (short-medium term). Some examples:
• Monthly/ Quarterly/ Half yearly/ Annual Sales: Target vs. Actual & % deviation: overall,
territory-wise, sales person wise, product wise, etc. Also, trends in performance deviation.
• Plant Capacity Utilization, Target vs. Actual, factory-wise, shop floor wise, etc.
• Customer Complaints Analysis, Trends.
• Marketing Campaign Effectiveness
• Periodic Financial Reports, Expense & Profit Analysis, etc.
• Employee attrition rate analysis & trends.
3. Formulate proactive & sound medium-long term strategies:
Each individual in the Top Management team is provided with timely, highly customized and
integrated Information (both internal & external), along with “Query Processing”, that enables
him/ her to:
• assess the status of the business at a glance
• identify opportunities & threats
• probe & analyze in-depth and in a highly flexible manner, on specific issues
• Initiate medium-long term plans/ strategies & related decisions/ actions
.Some examples:
Performance Dashboard, based on KPIs / KPPs
“Drill Down” analysis & Querying
High level alerts/ reports such as economic trends, specific competitor activity or
developments in the business environment that can impact the organisation. Can also
include “internal” escalations of complaints, positive & negative events etc.
4. Improve Decision-making at all levels:
An effective and comprehensive MIS should also include, wherever possible, Information
analysis tools that enable the decision-maker to evaluate & compare number of decision
alternatives, compare them and then make a choice as recommended by the decision support
tool or otherwise. Some examples:
• Plant Schedule for a specific period (day, week..), based on pending job cards, machine
availability, deadlines, personnel & other resources available, cost etc.
• Delivery plan (or job allocations to Customer Service staff) for the day, based on all the
pending deliveries, their locations, available resources, cost etc.
• Customer Waiting Time Optimization
• Preliminary Loan Sanction/ Rejection, based on various inputs & their evaluation
• Target list for a DM campaign; Prioritization of Sales Opportunities, Order Quantity for a
special offer or seasonal demand etc.
• Recommended solution for desired Cash Inflow/ Profitability gain
• Recommended person for a particular role to be filled internally
• Forecasts & Budgets (with what-if analysis, goal seeking & searching etc.)
Benefits from an effective MIS
The benefits that accrue for a Firm, from a comprehensive and effective MIS, are quite
obvious, derived from the role/ objectives expected from it:
1. Efficiency and performance of the organisation as a whole improves over time and this
translates into greater customer satisfaction & better supply chain management, growth in
revenue & profitability.
2. All resources of the Enterprise become productive and are managed effectively: Finance,
HR, Materials, Manufacturing facilities (if applicable).
3. The Firm, over time, becomes well equipped to retain/ enhance its position in the market,
tap market opportunities, monitor competition & maintain competitive edge, etc.
4. Supervisors & managers at all levels develop enhanced rational & objective decision-
making ability. Person dependence decreases in general, which is a significant gain.
5. Business processes & core competencies of the Firm continually improve due to
appropriate use of technology and automation. This further impacts productivity and the
bottom line positively.
MIS Components / Elements
• Often, the term “Application” is heard in relation to
Information Systems & MIS- Financial Analysis
Application, Inventory Control Application, ERP
Application, BI Application, etc. This actually refers to
only one sub-component of a system, when its viewed
physically, as consisting of different parts:
“Application Software” - the computer program(s)
corresponding to automation of various steps/
activities in one or more business processes.
• Application S/w is no doubt the “heart & soul” of any
IS/ MIS, since it defines & governs what it “does”.
Hence, there’s a tendency to consider these systems
as “Software Systems” and dilute focus/ attention
somewhat, on the other components/ elements,
without which the Application S/w cannot work!
• Its critical to view & understand the full set of
components/ elements of Information Systems in
totality. All these are necessary for the IS/ MIS to
work effectively!
MIS Components / Elements
From another perspective, MIS can be seen as having two
components/ elements: Front & Back End Systems.
1. Front End System (Client)
• Enables various Users to concurrently access Information
and/ or analysis/ decision support tools for further
processing.
• Generally consists of PCs/ notebooks/ mobile devices etc.,
with various Software such as User Interface Applications
(also called Client S/w), stand alone applications, etc.
2. Back End System (Server)
• All the data from across the organisation resides at the
Back End, in Databases shared by various Users as
required. All Application S/w related to transaction
processing & data analysis/ information generation also
resides here.
• Consists of Servers & Storage Systems, with associated
S/w for Transaction Processing, MIS Applications, DBMS,
etc. Called Server End, since it serves Front End.
The entire set up is referred to as a Client-Server Environment.
MIS – Critical Success Factors
1. Info Systems & MIS don’t come free of cost! Can entail
massive investments. ROI is from the various benefits that
can potentially accrue & it materializes only when the MIS
development & implementation is successful- timely,
relevant & meaningful to the Users, fulfilling its role/
objectives, etc.
2. Success with MIS is not a “given”; has to be “engineered
properly”. Many cases exist, of success with MIS not being
as expected, not worth the investments and so on. Its also
very important to understand that the benefits have a
“gestation” period. They don’t accrue overnight!
3. To improve chances of success with MIS, its necessary to
understand the CSFs – the most important issues that
contribute to success and which if not favourable, will
certainly lead to failure with MIS!
4. Since no meaningful MIS is possible today w/o Information
& Communications Technology (ICT), MIS development &
implementation often tends to overly focus on this aspect,
resulting in subsequent hassles. Putting in place a
successful MIS is actually a synergy between 4 entities:
PPT&M – People, Process, Technology & Management!
MIS – Critical Success Factors
MANGEMENT PEOPLE
• Implementation process must be Top Management driven. • Probably the most critical factor is the “Quality” and “Participation”
of Users. Besides being capable of properly articulating
• Top Mgt. must have approved a broad IS implementation
information needs/ reports/ alerts & support needed for better
plan, including budget allocations, milestones, realistic ROI
functioning & decision making, the Users must devote necessary
expectations & plan etc.
time for this task, communicating effectively to the s/w provider(s),
• A Steering Committee is highly desirable, with cross Users must also participate & contribute effectively in the “System
functional composition and chaired by a Top Management Testing” phase.
team member, to periodically monitor & review progress, • An appropriately staffed & equipped IT function must exist.
usage, benefits etc.
• A reliable “Technology Consultant” is highly desirable.
PROCESSES TECHNOLOGY & TOOLS
• The organisation must have well defined & meaningful • It may not be important to have the “best/ latest” technology.
process flows, without needless delays, bottlenecks etc. Rather, technology must be “appropriate & relevant”.
There must also be ample willingness for process • Reliable technology providers for hardware, networking, software
improvements & changes, which can be necessitated due to & their implementation and System Integrators (SI)
automation & technology usage. • Appropriate System Engineering methodologies, to ensure that
• Reliable & accurate data capture mechanisms must exist. various applications get developed/ implemented as per a clear
Raw data and processed data must be available on time, plan, without much of “rework”.
when needed. • To the extent possible, the Firm must not get “tied up” with specific
• Transaction Processing Systems (TPS) must be in place. suppliers/ service providers, due to Technology.
3 Approaches for Info Systems
Today, a business organisation can adopt and also combine three distinct
approaches or methods to set up (put in place) Application Software and
Information Systems in general, including one or more forms of MIS. This has
been made possible by numerous advancements in Software Development
technology and Wide Area Networking (WAN), including the huge changes
brought about by the Internet:
1. Fully Customized Application S/w Development & Implementation – by
Inhouse team or contracted to one or more “Software Developers”.
2. Procure use license for 3rd party “Application Software Products /
Solutions at site”. This is emerging as the most adopted method for medium
to large organisations, since its a “middle-of-the-road” approach and partially
offers advantages of the other two “extreme” approaches.
3. Use 3rd party “Application Software Products/ Solutions” remotely, under
license, as a “managed service” from the Provider. Also called “SaaS
(Software as a Service) or Cloud Computing”.
3 Approaches for Info Systems
Approach Brief Description
Fully customised Only approach till early/ mid 90s. Firm creates own Application S/w, exactly as required.
Application S/w Needs full-fledged IT function, including infrastructure & S/w Dev. resources, if done In-
Development/ house. Expensive & time consuming. Also, significant investments are in what may not be
Implementation- the Firm’s Core Competence area. Though much less evident today, approach is still used
Inhouse or by large Firms particular about fully tailored S/w & ownership/ exclusive use. In-house
contracted Dev. has given way to use of external S/w service providers.
Rapidly becoming the default approach. Technology advancements brought in the “S/w
Procure &
Manufacturing & Implementation” sector. Application S/w became largely available as an
Implement 3rd
item/ product which can be procured on license, for installation/ use in a Firm, with some
Party “Software
degree of customization (based on Firm-specific functional requirements) of the standard
Product/ Solution”
product. Much cheaper & faster than (a). Not without cons like the need to change
at site (Firm’s
business flows & processes based on the Product, no S/w ownership, heavy dependence
premises)
on S/w Provider etc.
Use 3rd Party “S/w Suitable for small-medium Firms, which can’t afford the above approaches. Involves very
Product/ Solution” little investment in IT. The Firm acquires license to use 3rd party Application S/w through
remotely, as a web-based login to the Service Provider’s server. No customization whatsoever. Use as-is,
Managed Service pay as per usage levels and storage space requirements.

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Unit 2:

MIS & its Implementation- Essential

In-depth analysis of both internal

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