MANAGEMENT INFORMATION SYSTEM

(MIS)
INTRODUCTION

Management Information System (MIS) is a combination of principles, theories and

practices of management, which play an important role in business organisation in the

planning and decision-making process. It provides information for the personnel at

various levels of management for performing their respective jobs. The management

information system can be compared with information technology (IT). IT can be

considered as a sub-system of MIS.

DEFINITION

MIS is defined as a system that consists of people, machines, procedures, data models

and databases as the elements of the system. The system performs the following actions:

1.Gathers data from the internal and external sources of an organisation

2.Processes the data

3.Supplies the processed data or management information to the managers to assist them

in the procedure of decision-making.

SIGNIFICANCE OF MIS

MIS is defined as the field of management where timely and reliable information plays a

very important role. This information is obtained through a logical and well-structured

method of collecting information and processing of the collected information, which

helps the decision-makers in carrying out the decisions. MIS is very significant these

days because the term information is considered equally important to the three M have

related to the business industry namely money, materials, men and machines [1].
The significance of a planned, analyzed, designed and maintained MIS is as follows:

 Helps in progress and growth of the business and management infrastructure in

increasing business complexities by providing timely, useful and reliable information.

This information is provided to the management for taking quick, rational and speedy

decisions.

 Helps in globalization and liberalization of the organisations that need to compete not

only locally but globally too.

MIS assists decision-makers in organisations by providing Management Information

(MI) at various stages of decision-making. Whereas MIS if in case is not maintained

properly may provide inaccurate or irrelevant information that may prove costly to the

organisation.

NATURE AND SCOPE OF MIS

MISis supposed to have borrowed the management concepts from various disciplines

such as accounting, computing, organizations, management and operations. Because of

this interdisciplinary nature of MIS, it is considered both as an art and a science.

CHARACTERISTICS OF MIS:
Following are the characteristics of MIS:

 System approach: MIS follows the system approach, which implies a step by step

approach to the study of system and its performance in the light of the objective for

which it has been constituted. It means taking a comprehensive view or a complete

look at the interlocking sub-systems that operate within an organisation.

 Management-oriented: The management-oriented characteristic of MIS implies that

top-down approach needs to be followed for designing MIS. The top-down approach

suggests that the system development starts with determining management

requirements and overall business objectives. In addition, the development plan of

MIS should be derived from the overall business plan. This MIS characteristic also
 implies that the management actively directs the system development efforts towards

the completion of the project.

 Need-based: The design and development of MIS should be as per the information

required by the managers. The required design and development information is at

different levels, viz., strategic planning, management control and operational control.

It means MIS should cater to the specific needs of managers in the hierarchy of an

organisation.

 Exception-based: The development of MIS needs to be on the exception- based

reporting principle. This exception-based reporting principle means an abnormal

situation such as the situation in which maximum, minimum or expected values vary

beyond tolerance limits. In these abnormal situations, the system needs to have

exception reporting to the decision-maker at the required level.

 Future-oriented: The design and development of MIS should also be future oriented

so that the system is not restricted to provide only the past information. It means that

the system should provide such useful information on the basis of the projections

based on which actions may be initiated.

 Integrated: MIS has ability to produce meaningful information because of the

integration concept. It means taking a comprehensive view or looking at the complete

picture of the interlocking sub-systems that operate within the company. For example,

to develop an effective production scheduling system, it is necessary to balance the

following factors:

A. Set-up costs

B. Work force
 C. Overtime rates

D. Production capacity

E. Inventory level

F. Capital requirements

G. Customer services

We can start developing an MIS by using a specific sub-system, but serious shortcomings

may result unless the identity of MIS is realized and properly reflected in the total

system. Thus, an integrated system, which blends information from several operational

areas, is a necessary characteristic of MIS [1].

• Common data flows: Duplication and redundancy in data collection, storage and

dissemination could be avoided by using the integration concept of MIS. The

common data flow concept supports numerous basic views of system analysis such as

avoiding duplication, combining similar functions and simplifying operations. The

development of these common data flow concepts is an economically sound and

logical concept.

• Long-term planning: MIS cannot be developed in a short interval of time because it

involves heavy planning that could be done in relatively long periods. While

developing MIS, the designer has the future objectives and needs of the company in

mind. The designer should avoid the possibility of the system going outdated before

its time.
• Sub-system planning: The MIS development process is quite complex and thus the

system needs to be broken down into digestible sub-systems. These digestible sub-

systems of a single system are more meaningful at the planning stage.

• Central database: A central database is the vessel that holds various different

functional systems together with each system requiring access to the master file of

data. This database covers information related to inventory, personnel, vendors,

customers, etc. If the data stored in the database is stored efficiently and with

common usage in mind, one master file can provide the data needed by any of the

functional systems. It is logical to gather data once, to properly validate it and to

place it on a central storage medium, which can be accessed by any other sub-system.

FUNCTIONS OF MIS

The prime objective to set up MIS in an organisation is to use the management

information by its managers for decision-making. Thus, MIS needs to perform the

following functions to meet its objectives:

• Capturing data: MIS performs usage of data whether manual or through computer

terminals by using various internal and external sources of an organisation. The data

related to transactions that take place in the organisation is stored in some physical

medium such as a paper form or entering it directly into a computer system by the end

users.

• Processing data: Processing data includes converting the captured data into the

required management information. To process the data, you need to perform various

activities such as calculating, comparing, sorting, classifying and summarizing the data.
These data processing activities organizeanalyses and manipulate captured data by using

various statistical, mathematical, operations research and other business models.

• Information storage: MIS saves the less frequently used information as an

organizational record and thus stores the processed or unprocessed data for future use.

While performing this storage activity, data and information are reserved and organized

in the form of fields, records, files and databases for future use.

• Information retrieval: Information retrieval includes retrieving the stored information

as per the requirements of the management users. In such cases, the retrieved information

is used as such or is processed again to meet the exact Management Information (MI)

demands.

• Disseminating management information: Disseminating Management Information,

which is a finished product of MIS is divided and distributed to the users in an

organisation. This information could be periodic, through reports or online through

computer terminals. Figure shows various functions performed by MIS.

Source [1]
COMPONENTS OF MIS
MIS is a system that takes data as input, processes it to generate information that can help the

management of an organisation in decision-making and strategic planning. Today, most

organisations implement the MIS so as to achieve the organizational goals. The MIS has various

components, which are as follows:

Hardware: The hardware components of MIS include various input and output devices that helps

in feeding data as well as displaying the information when required. The input devices include the

keyboard, scanners and mouse. The output devices may be the monitor, printer, network devices,

and so on. The hardware devices are the physical parts of MIS that helps in maintaining the data

of an organisation.

Software: The programs and applications that convert data into machine-readable language are

known as software. There are various types of software that are used for processing the

information of an organisation such as ERP and CRM. ERP is software package that combines all

data and processes of an organisation. It uses multiple components of computer software and

hardware to achieve the integration. The main advantage of an ERP system is that it uses a single,

unified database to store data for the various systems. An ERP system helps in controlling all the

functions of an organisation. CRM is also a software package that includes the capabilities,

methodologies and technologies in order to support an organisation in managing the customer

relationships. The general purpose of CRM is to enable organisations to manage their customers

through the introduction of reliable systems, processes and procedures.

Procedures: Procedures are sets of rules or guidelines that an organisation establishes for the use

of a computer-based information system. The procedures may vary from one organisation to

another. It may also vary from one department to another as per the requirement. For example,

the working of production department is different from the working of sales department. The

production department requires information regarding the raw material or quantity of goods to be
produced. So, the production department sets its procedures in such a way that the MIS system

helps in retrieving the information required by the department. In the similar way, the sales

department requires information regarding the quantity of goods sold and the other expenses that

occurred during the sales of the product. Therefore, the sales department sets the procedures in

such a way that they get only that information which is required from the MIS.

Personnel: Personnel of MIS are the computer experts, managers and users who utilise the

computer-based information system for achieving the organizational goals. The various personnel

of the organisation use the information stored in MIS for performing different functions such as

planning and decision-making.

HIERARCHY OF MANAGEMENT ACTIVITY

There are three levels of management activities, which are operational control,

management control and strategic planning. Operational control is the process of

ensuring that specific tasks are carried out effectively and efficiently. Management

control is the process by which managers ensure that the resources are obtained and used

effectively and efficiently in order to achieve the organizational goals. Strategic planning

is the process of deciding the objectives of the organisation, changes required in

achieving these objectives, resources used to obtain these objectives and the policies that

are used in the acquisition, use and disposition of these resources. These levels of

management activities are described in detail as follows.

• Strategic Planning: Strategy consists of making choices among alternative action

programmes, commitment to specific product markets, competitive moves and business

approaches, on the part of the managers to achieve organizational goals. Strategic

planning is necessary for the management all levels from top level to the bottom level.

Strategic planning facilitates smooth operational activities in the organisation. Top level
needs strategic planning to define the objectives of the organisation. It helps the

organisation to see its future in the long run and thus helps the management to steps

accordingly. It helps in policy formulation to clear the goals organisation. Middle level

management is benefited from strategic planning through smooth application of the

policies formulated by the top management. It includes setting of organizational goals,

designing policyand plans so that the goals set by the organisation can be easily achieved.

• Management Control: The management control activities are performedbythe people

at middle management. Management control facilitates smooth operational activities in

the organisation. It is important for the management to keep a check on the operations

and people involved in operations to avoid any wastage of resources and helps in utilizing

the resources efficiently effectively. It includes making plans that are required to control

the various activities required in the proper management of the organisation. It includes

the management of various projects that the organisation ishandling.

• Operational Control: The operational control activities are performed by the people at

the low-level management. Operational control helps in utilization of the resources

available without any wastage. It requires proper handling of machines with reduced

costs and depreciation. It also helps managing the workers involved in operations through

proper supervision directions. It helps the organisation to produce quality products in

desirabletime. It includes administration of routine operations such as updating and

handling user inquiries that belong to the operational control level below Figure shows

the hierarchy of management activities.

 Hierarchy of Management Activities

MIS is an important part of an organisation as it helps in gathering information required

for planning and decision-making. It also helps in performing other functions of an

organisation such as staffing, directing and controlling. MIS performs various functions

in an organisation such as collection and processing data for information. It also helps in

storing information and retrieving it as and when required.

Implementation and evaluation of MIS

Implementation is a process of placing a newly developed MIS into operation or

functioning at the user's workstation. Steps to implement MIS are:

• Planning for implementation

• Acquisition of facilities and space planning

• Developing MIS organisation and procedure

• User training

• Acquisition of hardware and software

• Creating forms and database

• Testing

• Change over

Implementation is the process of ensuring that the information system is operational and

allowing users to take over its operation for use and evaluation. This involves training the

users to handle the system. The analyst needs to plan for a smooth conversion from the

old system to the new one. Once the information system has been developed and

acceptance testing is completed, the implementation process starts. Users must be trained

on the use of the new system, focusing on its requirements and its capabilities. Many

organisations combine testing and training in the same stage. This works well because

users can become familiar with the new information system as well as ensure that it can

handle errors at the same time. Training, like testing and documentation, is ultimately a

management responsibility.
SELECTION OF HARDWARE AND SOFTWARE

We need to select hardware and software products for installing an MIS. For selecting the

hardware and software products, following steps are taken into consideration:

1. Requirement analysis

2. Preparing tender specifications

3. Inviting tenders

4. Technical scrutiny and short-listing

5. Detailed evaluation of short-listed vendors

6. Negotiations and procurement decision

7. Delivery and installation

8. Post-installation review

EVALUATION OF MIS
Evaluation of MIS is a process in which the performance of an organizational MIS is

determined. According to the performance results, the organisation evaluates and

implements the necessary modifications in MIS. Various terms related to the evaluation

of MIS are:

• Evaluation approaches

• Evaluation classes

• Product-based MIS evaluation

• Cost/benefit-based evaluation

 Evaluation Approaches

Various approaches are used to evaluate the organizational MIS performance. The most

common approaches are:

 Quality Assurance Review

The quality assurance review is also known as technical review. It determines the

technical quality performance of MIS. The quality assurance review determines

the data transmission rate, main or secondary storage and CPU capacity.

The MIS development personnel or a quality assurance group performs the quality

assurance review.

 Evaluation Classes

To evaluate the performance of MIS, the following two classes are used: • Effectiveness •

Efficiency

 Effectiveness

The effectiveness class determines the quality of the MIS output. MIS is effective,

if the quality of its output is good and the process of producing output is right.

 Efficiency

The efficiency class specifies the total amount of resources required by MIS to

obtain the output.

The relationship between effectiveness and efficiency can be defined as effectiveness is a

measure of quality of an MIS output, while efficiency is a measure of the resources

required to achieve the output.

 Product-based MIS evaluation

The product-based MIS evaluation is also known as effectiveness evaluation. Determines

the effectiveness of an MIS output. For assessing the effectiveness of MIS output, a

model structure may be used.

 Model Structure

A model structure is a structure that contains various information attributes such as

timeliness and relevance. To determine the MIS effectiveness in an organisation, need to

determine the information attributes for the MIS output.

Some of commonly used attributes are:

• Timeliness

• Relevance

• Accuracy

• Completeness

• Adequacy

• Explicitness

• Exception-based
SYSTEM MAINTENANCE
The evaluation process helps an organisation to analyses whether or not MIS is effective

and efficient. On the basis of the evaluation results, an organisation performs system

maintenance. System maintenance is a process of monitoring, analyzing and modifying

the existing MIS to make some desired or specific improvements. The system

maintenance includes removing errors, which may be due to environment change,

organisation change or system design. In the system maintenance process, various tasks

are performed that are categorized into the following categories:

• Corrective maintenance

• Adaptive maintenance

• Perfective maintenance

Corrective Maintenance

In the corrective maintenance, the processing or performance failures are repaired. These

failures are due to faulty design or wrong assumptions during the MIS design and

implementation process.

Adaptive Maintenance

In the adaptive maintenance, MIS is repaired according to some organizational changes.

The organizational changes include:

• Change in the organizational procedures

• Change in organizational objectives, goals and policies

• Change in forms

• Change in system controls and security needs

Perfective Maintenance

In the perfective maintenance, MIS is repaired to enhance its performance. The perfective

maintenance includes adding new program and modifying the existing programs in an

MIS system.

Classification of MIS

The discipline of MIS can be categorized in the following 6 classes:

i) Transaction Processing System (TPS)

ii) Management Information System (MIS)

iii) Decision Support System (DSS)

iv) Executive Support System (ESS)

v) Office Automation Systems (OASs), and

vi) Business Expert Systems (BESs)

Transaction Processing System

TPS processes transaction and produces reports. It represents the automation of the

fundamental, routine processing used to support business operations. It does not provide

anyinformation to the user to his/her decision-making. TPS uses data and produces data

as shown in the following diagram.

Previously, TPS was known as Management Information System. Prior to computers,

data processing was performed manually or with simple machines. The domain of TPS is

at the lowest level of the management hierarchy of an organization.

Management Information System (MIS)

MIS is an information system, which processes data and converts it into information. A

management information system uses TPS for its data inputs. The information generated

by the information system may be used for control of operations, strategic and long-range

planning. Short-range planning, management control, and other managerial problem

solving. It encompasses processing in support of a wide range of organizational functions

& management processes. MIS is capable of providing analysis, planning & decision

making support. The functional areas of a business may be marketing, production, human

resource, finance and accounting.

Decision Support System (DSS)

A decision support system (DSS) is an information system application that assists

decision-making. DSS tends to be used in planning, analyzing alternatives, and trial and

error search for solution. The elements of the decision support system include a database,

model base & software. The main application areas of DSS are Production, finance and

marketing.
DSS can be differentiated from MIS on the basis of processing the information. MIS

processes data to convert it into information. DSS processes information to support the

decision making process of a manager.

Executive Support System (ESS)

Executive Support System (ESS) is an extension of the management information system,

which is a special kind of DSS; An ESS is specially tailored for the use of chief executive

of an organization to support his decision-making. It includes various types of decision-

making but it is more specific and person oriented.

Office Automation Systems (OAS)

Office automation refers to the application of computes and communication technology

to office functions. Office automation systems are meant to improve the productivity of

managers at various levels of management of providing secretarial assistance and better

communication facilities.

Office activities may be grouped under two classes, namely

i) Activities performed by clerical personnel (clerks, secretaries, typist, etc.,) and

ii) Activities performed by the executives (managers, engineers or other professionals

like economist, researches etc.)

 In the first category, the following is a list of activities.

a) Typing

b) Mailing

c) Scheduling of meetings and conferences,

d) Calendar keeping, and

e) Retrieving documents

The following is a list of activities in the second category (managerial category)

a) Conferencing.

b) Production of information (messages, memos, reports, etc.) and controlling

performance

Business Expert Systems: These systems are one of the main types of knowledge-based

information systems. These systems are based on artificial intelligence, and are advanced

information systems. A business expert system is a knowledge based information system

that uses its knowledge about a specific, complex application area to act as an expert. The

main components of an expert system are:

a. Knowledge Base

b. Interface Engine

c. User Interface
The discipline of MIS can be categorized in the following 6 classes:
i) Transaction Processing System (TPS)
ii) Management Information System (MIS)
iii) Decision Support System (DSS)
iv) Executive Support System (ESS)
v) Office Automation Systems (OASs), and
vi) Business Expert Systems (BESs)

Transaction Processing System

TPS processes transaction and produces reports. It represents the automation of the
fundamental, routine processing used to support business operations. It does not provide
any information to the user to his/her decision-making. TPS uses data and produces data
as shown in the following diagram.

Previously, TPS was known as Management Information System. Prior to computers,

data processing was performed manually or with simple machines. The domain of TPS is
at the lowest level of the management hierarchy of an organization.

Management Information System (MIS)

MIS is an information system, which processes data and converts it into information. A
management information system uses TPS for its data inputs. The information generated
by the information system may be used for control of operations, strategic and long-range
planning,short-range planning, management control and other managerial problem
solving. It encompasses processing in support of a wide range of organizational functions
& management processes. MIS is capable of providing analysis, planning & decision
making support. The functional areas of a business may be marketing, production, human
resource, finance and accounting.

Decision Support System (DSS)

A decision support system (DSS) is an information system application that assists

decision-making. DSS tends to be used in planning, analyzing alternatives, and trial and
error search for solution. The elements of the decision support system include a database,
model base & software. The main application areas of DSS are Production, finance and
marketing.

DSS can be differentiated from MIS on the basis of processing the information. MIS
processes data to convert it into information. DSS processes information to support the
decision making process of a manager.

Executive Support System (ESS)

Executive Support System (ESS) is an extension of the management information system,

which is a special kind of DSS; An ESS is specially tailored for the use of chief executive
of an organization to support his decision-making. It includes various types of decision-
making but it is more specific and person oriented.

Office Automation Systems (OAS)

Office automation refers to the application of computes and communication technology

to office functions. Office automation systems are meant to improve the productivity of
managers at various levels of management of providing secretarial assistance and better
communication facilities.

Office activities may be grouped under two classes, namely

i) Activities performed by clerical personnel (clerks, secretaries, typist, etc.,) and

ii) Activities performed by the executives (managers, engineers or other professionals

like economist, researches etc.)

In the first category, the following is a list of activities.

a) Typing

b) Mailing

c) Scheduling of meetings and conferences,

d) Calendar keeping, and

e) Retrieving documents

The following is a list of activities in the second category (managerial category)

a) Conferencing.

b) Production of information (messages, memos, reports, etc.) and controlling

performance

Business Expert Systems: These systems are one of the main types of knowledge-based
information systems. These systems are based on artificial intelligence, and are advanced
information systems. A business expert system is a knowledge based information system
that uses its knowledge about a specific, complex application area to act as an expert. The
main components of an expert system are:

a. Knowledge Base
b. Interface Engine

c. User Interface
UNIT - II
TRANSACTION PROCESSING SYSTEM
A transaction processing system is a type of information system. TPSs collect, store,

modify, and retrieve the transactions of an organization. A transaction is an event that

generates or modifies data that is eventually stored in an information system. To be

considered a transaction processing system the computer must pass the ACID test. The

essence of a transaction program is that it manages data that must be left in a consistent

state, e.g. if an electronic payment is made, the amount must be both withdrawn from one

account and added to the other; it cannot complete only one of those steps. Either both

must occur, or neither. In case of a failure preventing transaction completion, the partially

executed transaction must be 'rolled back' by the TPS. While this type of integrity must

be provided also for batch transaction processing, it is particularly important for online

processing: if e.g. an airline seat reservation system is accessed by multiple operators,

after an empty seat inquiry, the seat reservation data must be locked until the reservation

is made, otherwise another user may get the impression a seat is still free while it is

actually being booked at the time. Without proper transaction monitoring, double

bookings may occur. Other transaction monitor functions include deadlock detection and

resolution (deadlocks may be inevitable in certain cases of cross-dependence on data),

and transaction logging (in 'journals') for 'forward recovery' in case of massive failures.

DECISION SUPPORT SYSTEMS (DSS)

Decision support systems (DSS) are interactive software-based systems intended to help

managers in decision-making by accessing large volumes of information generated from

various related information systems involved in organizational business processes, such

as office automation system, transaction processing system, etc.

DSS uses the summary information, exceptions, patterns, and trends using the analytical

models. A decision support system helps in decision-making but does not necessarily

give a decision itself. The decision makers compile useful information from raw data,

documents, personal knowledge, and/or business models to identify and solve problems

and make decisions.

Programmed and Non-programmed Decisions

There are two types of decisions - programmed and non-programmed decisions.

Programmed decisions are basically automated processes, general routine work, where:

 These decisions have been taken several times.

 These decisions follow some guidelines or rules.

For example, selecting a reorder level for inventories is a programmed decision.

Non-programmed decisions occur in unusual and non-addressed situations, so:

 It would be a new decision.

 There will not be any rules to follow.

 These decisions are made based on the available information.

 These decisions are based on the manger's discretion, instinct, perception and

judgment.
For example, investing in a new technology is a non-programmed decision.

Decision support systems generally involve non-programmed decisions. Therefore, there

will be no exact report, content, or format for these systems. Reports are generated on the

fly.

Attributes of a DSS

 Adaptability and flexibility

 High level of Interactivity

 Ease of use

 Efficiency and effectiveness

 Complete control by decision-makers

 Ease of development

 Extendibility

 Support for modeling and analysis

 Support for data access

 Standalone, integrated, and Web-based

Characteristics of a DSS

 Support for decision-makers in semi-structured and unstructured problems.

 Support for managers at various managerial levels, ranging from top executive to line

managers.
 Support for individuals and groups. Less structured problems often requires the

involvement of several individuals from different departments and organization level.

 Support for interdependent or sequential decisions.

 Support for intelligence, design, choice, and implementation.

 Support for variety of decision processes and styles.

 DSSs are adaptive over time.

Benefits of DSS

 Improves efficiency and speed of decision-making activities.

 Increases the control, competitiveness and capability of futuristic decision-making of

the organization.

 Facilitates interpersonal communication.

 Encourages learning or training.

 Since it is mostly used in non-programmed decisions, it reveals new approaches and

sets up new evidences for an unusual decision.

 Helps automate managerial processes.

Components of a DSS

Following are the components of the Decision Support System:

 Database Management System (DBMS): To solve a problem the necessary data

may come from internal or external database. In an organization, internal data are

generated by a system such as TPS and MIS. External data come from a variety of

sources such as newspapers, online data services, databases (financial, marketing,

human resources).

 Model Management System: It stores and accesses models that managers use to

make decisions. Such models are used for designing manufacturing facility, analyzing

the financial health of an organization, forecasting demand of a product or service,

etc.

Support Tools: Support tools like online help; pulls down menus, user interfaces,

graphical analysis, error correction mechanism, facilitates the user interactions with the

system.

Classification of DSS

There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS as

follows:

 Text Oriented DSS: It contains textually represented information that could have a

bearing on decision. It allows documents to be electronically created, revised and

viewed as needed.

 Database Oriented DSS: Database plays a major role here; it contains organized and

highly structured data.

 Spreadsheet Oriented DSS: It contains information in spread sheets that allows

create, view, modify procedural knowledge and also instructs the system to execute

self-contained instructions. The most popular tool is Excel and Lotus 1-2-3.

 Solver Oriented DSS: It is based on a solver, which is an algorithm or procedure

written for performing certain calculations and particular program type.

 Rules Oriented DSS: It follows certain procedures adopted as rules.

 Rules Oriented DSS: Procedures are adopted in rules oriented DSS. Export system is

the example.

 Compound DSS: It is built by using two or more of the five structures explained

above.

TYPES OF DSS

Following are some typical DSSs:

 Status Inquiry System: It helps in taking operational, management level, or middle

level management decisions, for example daily schedules of jobs to machines or

machines to operators.

 Data Analysis System: It needs comparative analysis and makes use of formula or

an algorithm, for example cash flow analysis, inventory analysis etc.

 Information Analysis System: In this system data is analyzed and the information

report is generated. For example, sales analysis, accounts receivable systems, market

analysis etc.
  Accounting System: It keeps track of accounting and finance related information,

for example, final account, accounts receivables, accounts payables, etc. that keep

track of the major aspects of the business.

 Model Based System: Simulation models or optimization models used for decision-

making are used infrequently and creates general guidelines for operation or

management.

EXECUTIVE INFORMATION SYSTEM (EIS)

An executive information system (EIS) is a decision support system (DSS) used to assist

senior executives in the decision-making process. It does this by providing easy access to

important data needed to achieve strategic goals in an organization. An EIS normally features

graphical displays on an easy-to-use interface.

Executive information systems can be used in many different types of organizations to

monitor enterprise performance as well as to identify opportunities and problems.

Early executive information systems were developed as computer-based programs on

mainframe computers to provide a company’s description, sales performance and/or market

research data for senior executives. However, senior executives were not all computer literate

or confident. Moreover, EIS data was only supporting executive-level decisions but not

necessarily supporting the entire company or enterprise.

Current EIS data is available company- or enterprise-wide, facilitated by personal computers

and workstations on local area networks (LANs). Employees can access company data to
help decision-making in their individual workplaces, departments, divisions, etc.. This allows
employees to provide pertinent information and ideas both above and below their company
level.

Executive support systems are intended to be used by the senior managers directly to provide
support to non-programmed decisions in strategic management.

These information are often external, unstructured and even uncertain. Exact scope and context of
such information is often not known beforehand.

This information is intelligence based:

 Market intelligence

 Investment intelligence

 Technology intelligence

Examples of Intelligent Information

Following are some examples of intelligent information, which is often the source of an ESS:

 External databases

 Technology reports like patent records etc.

 Technical reports from consultants

 Market reports

 Confidential information about competitors

 Speculative information like market conditions

 Government policies

 Financial reports and information

FEATURES OF EXECUTIVE INFORMATION SYSTEM

Advantages of ESS

 Easy for upper level executive to use

 Ability to analyze trends

 Augmentation of managers' leadership capabilities

 Enhance personal thinking and decision-making

 Contribution to strategic control flexibility

 Enhance organizational competitiveness in the market place

 Instruments of change

 Increased executive time horizons.

 Better reporting system

 Improved mental model of business executive

 Help improve consensus building and communication

 Improve office automation

 Reduce time for finding information

 Early identification of company performance

 Detail examination of critical success factor

 Better understanding

 Time management

 Increased communication capacity and quality

Disadvantage of ESS

 Functions are limited

 Hard to quantify benefits

 Executive may encounter information overload

 System may become slow

 Difficult to keep current data

 May lead to less reliable and insecure data

  Excessive cost for small company

Expert System

An expert system is the highest form of management computing office automation which allows

the communication and manipulation of documents.

Decision support systems aid in problem solving by allowing for manipulation of data and

models.

Expert systems go beyond traditional manipulation of this type as they allow experts to ‘teach’

computers about their fields so that the system may support more of the decision making process

for less expert decision makers.

Expert systems represent one of the most advanced facts of information technology. That is, they

aid people in some of the most complex and least understood human information handling tasks,

i.e., decision making, problem solving, diagnosis and learning. They do this by storing a large

amount of factual information on a subject area, together with lines of reasoning employed by

human experts in that area.

Components of Expert System MIS

The components are:

1. Knowledge Acquisition Subsystem

2. Knowledge Base
3. Interference Engine

4. User Interface.

Components of expert system

1. Knowledge Acquisition Subsystem:

Knowledge represented in the knowledge base has to be acquired from the expert.

Knowledge Acquisition program is used by an individual, who has expertise in the problem to,

creates, add to or change the knowledge base. Potential sources of knowledge include human

expert, research reports, textbooks, databases and the user’s own experience.

2. Knowledge Base:

This is the most important element of an expert system since it holds the expert’s problem

solving knowledge. It is where the knowledge elicited from the expert is stored. It contains rules,
facts and descriptions of objects etc. With newer expert system products, the knowledge base is

always stored in data. The information in knowledge base is everything that is necessary for

understanding & formulating the problem & then solving it.

3. Interference Engine:

The interference engine is that part of the program which regains & determines how to apply the

knowledge in the knowledge base to the facts & premises presented at the user interface. It

performs this task in order to deduce new facts which are subsequently used to draw further

conclusions. The interference engine is the active component of an expert system. It is the Brain

of the expert system.

4. User Interface:

Expert system contains a language processor for friendly problem oriented-communications

between the manager-user & the computer. This communication is best carried out in a natural

language and in some cases; it is supplemented by the graphics.

Advantages and disadvantages

Advantages:

 Provides consistent answers for repetitive decisions, processes and tasks

 Holds and maintains significant levels of information

 Encourages organizations to clarify the logic of their decision-making

 Never "forgets" to ask a question, as a human might

Disadvantages:

 Lacks common sense needed in some decision making

 Cannot make creative responses as human expert would in unusual circumstances

 Domain experts not always able to explain their logic and reasoning

 Errors may occur in the knowledge base, and lead to wrong decisions

 Cannot adapt to changing environments, unless knowledge base is changed

OFFICE AUTOMATION

Office automation refers to the application of computer and communication technology to office

functions. Office automation systems are meant to improve the productivity of managers at

various levels of management by providing secretarial assistance and better communication

facilities.

Office automation system is the combination of hardware, software and people

in information system that process office transactions and support office activities at all levels of

the organization. These systems include a wide range of support facilities, which include word

processing, electronic filing, electronic mail, message switching, data storage, data and voice

communications, etc.

Office activities may be grouped under two classes, namely.

1) Activities performed by clerical personnel (clerks, secretaries, typists, etc) and

2) Activites performed by the executives (manages, engineers or other professionals like

economists, researchers etc.)

In the first category, the following is a list of activities

a) Typing

b) Mailing
c) Scheduling of meetings and conferences,

d) Calendar keeping and

e) Retrieving documents

The following is a list of activities in the second category (managerial category)

a) Conferencing

b) Production of information (messages, memos, reports, etc) and

c) Controlling performance

As already discussed, information technology facilitates both types of activities. A wide variety

of office automation devices like fax machine, copier, phones etc. are used in officer.

Some of the applications of office automation systems are discussed, in brief.

WORD PROCESSING

This refers to the computer –assisted preparation of documents (like letters, reports, memos, etc)

from textual data. Data once entered can be manipulated in various ways.

ELECTRONIC FILING

This facilitates the filling of incoming and outgoing mail/documents on a magnetic media.

Information is captured from the documents and is stored for future reference.

ELECTRONIC MAIL

It involves the transfer of letters and other documents through telecommunication lines, rather

than through physical delivery. An electronic mail system requires a telecommunication network

and software.
A prototype is made first and based on it final product is developed. A prototype is a model or a

program which is not based on strict planning, but is an early approximation of the final product

or software system. A prototype acts as a sample to test the process. From this sample we learn

and try to build a better final product. Please note that this prototype may or may not be

completely different from the final system we are trying to develop.

Need of Prototyping Model

This type of System Development Method is employed when it is very difficult to obtain exact

requirements from the customer(unlike waterfall model, where requirements are clear). While

making the model, user keeps giving feedbacks from time to time and based on it, a prototype is

made. Completely built sample model is shown to user and based on his feedback, the

SRS(System Requirements Specifications) document is prepared. After completion of this, a

more accurate SRS is prepared, and now development work can start using Waterfall Model.

Now lets discuss the disadvantages and advantages of the Prototype model in Software

Development Method.

Prototyping Process Model

Advantages of Prototyping Model

1) When prototype is shown to the user, he gets a proper clarity and 'feel' of the functionality of

the software and he can suggest changes and modifications.

2) This type of approach of developing the software is used for non-IT-literate people. They

usually are not good at specifying their requirements, nor can tell properly about what they

expect from the software.

3) When client is not confident about the developer's capabilities, he asks for a small prototype

to be built. Based on this model, he judges capabilities of developer.

4) Sometimes it helps to demonstrate the concept to prospective investors to get funding for

project.

5) It reduces risk of failure, as potential risks can be identified early and mitigation steps can be

taken.

6) Iteration between development team and client provides a very good and conductive

environment during project.

7) Time required to complete the project after getting final the SRS reduces, since the developer

has a better idea about how he should approach the project.

Disadvantages of Prototyping Model:

1) Prototyping is usually done at the cost of the developer. So it should be done using

minimal resources. It can be done using Rapid Application Development (RAD) tools.
Please note sometimes the start-up cost of building the development team, focused on

making prototype, is high.

2) Once we get proper requirements from client after showing prototype model, it may

be of no use. That is why, sometimes we refer to the prototype as "Throw-away"

prototype.

3) It is a slow process.

4) Too much involvement of client, is not always preferred by the developer.

5) Too many changes can disturb the rhythm of the development team.
SOFTWARE PACKAGE

Software package: A package that consists of

(a) One or more computer programs and possibly related material such as utility

programs or tutorial programs, recorded on a medium suitable for delivery to the user,

and from which the user can transfer the program(s) to a data-processing device, and

(b) instructional materials such as handbooks and manuals, update information, and

possibly support services information.

Note 1: The computer programs may consist, for example, of application programs or

operating systems, and are usually written in a high-level or low-level language,

respectively.

Note 2: The recording medium is usually a magnetic diskette or an optical compact disk.

COMPUTER-AIDED SOFTWARE ENGINEERING

Computer-aided software engineering (CASE) is the domain of software tools used to

design and implement applications. CASE tools are similar to and were partly inspired

by computer-aided design (CAD) tools used to design hardware products. CASE tools

are used to develop software that is high-quality, defect-free, and maintainable. CASE

software is often associated with methods for the development of information

systems together with automated tools that can be used in the software development

process.
CASE Tools - tools supports specific tasks in the software development life-cycle. They can

be divided into the following categories:

1. Business and Analysis modeling. Graphical modeling tools. E.g., E/R modeling, object

modeling, etc.

2. Development. Design and construction phases of the life-cycle. Debugging environments.

E.g., GNU Debugger.

3. Verification and validation. Analyze code and specifications for correctness,

performance, etc.

4. Configuration management. Control the check-in and check-out of repository objects and

files. E.g., SCCS, CMS.

5. Metrics and measurement. Analyze code for complexity, modularity, performance, etc.

6. Project management. Manage project plans, task assignments, scheduling.

Another common way to distinguish CASE tools is the distinction between Upper CASE and

Lower CASE. Upper CASE Tools support business and analysis modeling. They support

traditional diagrammatic languages such as ER diagrams, Data flow diagram, Structure

charts, Decision Trees, Decision tables, etc. Lower CASE Tools support development

activities, such as physical design, debugging, construction, testing, component integration,

maintenance, and reverse engineering. All other activities span the entire life-cycle and apply

equally to upper and lower CASE.

INFORMATION SYSTEM IN MARKETING

Marketing Information System (MIS) is a permanent arrangement (system or setup) for

provision of regular availability of relevant, reliable, adequate, and timely information for

making marketing decisions.

Information is like a life-blood of business. Quality of decisions depends on the right type of

information. The right information implies the right quality, the right quantity, and the right

timing of information. Circulation of needed information is as important as the circulation of

blood in human being.

Today’s marketing is dynamic, and manager has to undergo necessary changes to cope with

the pace of changing marketing environment. Information is a basic input to know what is

happening and what is going to happen. Marion Harper has rightly asserted: “To manage a

business well is to manage its future, and to manage the future well is to manage the

information.”

Philip Kotler:

“A marketing information system is a continuing and interacting system of people,

equipment’s, and procedures to gather, sort, analyze, evaluate, and distribute the pertinent,

timely, and accurate information for use by marketing decision-makers to improve their

marketing planning, implementation, and control.” Philip Kotler gives alternative definition,

such as: “A marketing information system (MIS) consists of people, equipment’s, and

procedures to gather, sort, analyze, evaluate, and distribute the needed, timely, and accurate

information to marketing decision makers.”

Components of MIS:

MIS is made of parts, subparts or subsystems which are called the components. Typically,

according to Philip Kotler, a marketing information system consists of four interrelated

components – Internal Reports (Records) System, Marketing Research System, Marketing

Intelligence System, and Marketing Decision Support System, as shown in Figure. All

components are interrelated and interdependent.

INFORMATION SYSTEM IN FINANCE AND ACCOUNTING

An information system is a formal process for collecting data, processing the data into

information, and distributing that information to users. The purpose of an accounting and

finance information system is to collect, store, and process financial and accounting data and

produce informational reports that managers or other interested parties can use to make

business decisions. Although IS (information system) can be a manual system, today most

accounting information systems are computer-based.

Functions of an Accounting Information System

Accounting information systems have three basic functions:

1. The first function of an AIS is the efficient and effective collection and storage of data

concerning an organization’s financial activities, including getting the transaction data

from source documents, recording the transactions in journals, and posting data from

journals to ledgers.

2. The second function of an AIS is to supply information useful for making decisions,

including producing managerial reports and financial statements.

3. The third function of an AIS is to make sure controls are in place to accurately record and

process data.

Parts of an Accounting Information System

An accounting information system typically has six basic parts:

1. People who use the system, including accountants, managers, and business analysts
2. Procedure and instructions are the ways that data are collected, stored, retrieved, and

processed

3. Data including all the information that goes into an AIS

4. Software consists of computer programs used for processing data

5. Information technology infrastructure includes all the hardware used to operate the AIS

6. Internal controls are the security measures used to protect data

The Reliability of Accounting Information Systems

Because AIS stores and provides such valuable business information, reliability is vitally

important. The American Institute of CPAs (AICPA) and Canadian Institute of Chartered

Accountants (CICA) have identified five basic principles important to AIS reliability:

1. Security - Access to the system and its data is controlled and limited only to those

authorized.

2. Confidentiality - The protection of sensitive information from unauthorized disclosure.

3. Privacy - The collection, use, and disclosure of personal information about customers is

done in an appropriate manner.

4. Processing integrity - The accurate, complete, and timely processing of data done with

proper authorization.

5. Availability - The system is available to meet operational and contractual obligations.

HUMAN RESOURCE INFORMATION SYSTEM (HRIS)

The Human Resource Information System (HRIS) is a software or online solution for the data

entry, data tracking, and data information needs of the Human Resources, payroll,

management, and accounting functions within a business.

Normally packaged as a database, hundreds of companies sell some form of HRIS and every

HRIS has different capabilities. Pick your HRIS carefully based on the capabilities you need

in your company.

Remember that even if your company is only a few people today, it may have twice that many

or even 10 times that many employees in the future, so pick a system that can grow with your

business.

Typically, the better The Human Resource Information Systems (HRIS) provide overall:

Management of all employee information: Data such as names, titles, addresses and salaries

are a basic start. Salary and position history, reporting structures, performance appraisal

histories, and other critical employee information.

Company-related documents such as employee handbooks, emergency evacuation

procedures, and safety guidelines.

Benefits administration including enrollment, status changes, and personal information

updating. In an ideal system, you can allow employees to look up and review their own

information, including vacation tracking.

Complete integration with payroll and other company financial software and accounting

systems.

When these are connected, you can ensure that paychecks are correct. There is never a

disconnect between what the official pay rate is and the information that payroll has. If the

systems don't integrate, it's easy to update a salary in one system and not in the other.

Applicant tracking and resume management. the recruiter can click a hired button and

all of the information from the applicant is transferred to the employee side of things.

Performance development plans. It's not just enough to have plans, if they are recorded in a

central system, then they can easily follow the employee from position to position. Senior

leadership can run reports to see where people are and what their individual bosses are

planning for their futures.

Disciplinary Actions. It's important to keep track of who has been suspended, demoted, or

had other negative actions taken against them noted - even after the employee leaves your

organization.

Training records. This is especially critical in a company where certifications and licenses

are required.
Strategic information systems

Strategic information systems (SIS) are information systems that are developed in response to

corporate business initiative. They are intended to give competitive advantage to the

organization. They may deliver a product or service that is at a lower cost, that is differentiated,

that focuses on a particular market segment, or is innovative.

Strategic information management (SIM) is a salient feature in the world of information

technology (IT). In a nutshell, SIM helps businesses and organizations categorize, store, process

and transfer the information they create and receive. It also offers tools for helping companies

apply metrics and analytical tools to their information repositories, allowing them to recognize

opportunities for growth and pinpoint ways to improve operational efficiency.

Advantage

 Less idle time

 Lower risk of failure

 Lower installation costs

 Faster processing time

 Lower labor costs

 Longer useful life and so on.

CHARACTERISTICS OF STRATEGIC INFORMATION MANAGEMENT

Strategic information management is a salient feature in the world of information technology

(IT). In a nutshell, strategic information management helps businesses and organizations

categorize, store, process and transfer the information they create and receive. It also offers

tools for helping companies apply metrics and analytical tools to their information

repositories, allowing them to recognize opportunities for growth and pinpoint ways to

improve operational efficiency.

Automation

 strategic information management systems typically include built-in controls that filter, sort,

categorize and store information in easy-to-manage categories.

Customization

 Strategic information management systems are typically customized to meet the unique needs

of each individual company. Incoming and outgoing data can be sorted and cross-referenced

according to a wide range of individually specified controls and parameters, which include the

company's business verticals and horizontals, individual clients, demographics, geographic

location and business function.

Organization and Access

 Strategic information management systems are extensively categorized, allowing for an

optimal level of organization. Access controls can be as strict or as lax as the client wants,

allowing for company-wide access to information databases or limiting information

accessibility to key personnel. User-specific controls can also be set, in case employees need

access to certain information but management wants to limit their access to sensitive data.

BARRIERS TO DEVELOPMENT OF STRATEGIC MANAGEMENT

INFORMATION SYSTEM

There are many forms of barriers present in an organization. Barriers that may occur may vary

on what type of organization is, because in every circumstance things change. These barriers,

employees have a big contribution. In fact, employees are one and have the major

contribution, concerns and involvement in this matter. In addition, there are still a lot of

factors that is involved in this matter of issue.

A barrier is an obstacle which prevents a given policy instrument being implemented, or

limits the way in which it can be implemented. In the extreme, such barriers may lead to

certain policy instruments being overlooked, and the resulting strategies being much less

effective. Potential risks and barriers to implementation have board coverage.

some of the potential risks and barriers in implementation of new IS that may occur in any

kind of organization.

Potential Risks and Barriers in Implementation of New IS

Delayed Decision Making by External Agencies

- Delayed decisions by agencies may jeopardize timelines

- Decisions that alter requirements may affect contracts

Negative Customer Reaction

- Customer may not be satisfied because needs may not meet.

- May be customer backlash if expected benefits don’t materialize

- Customers may not be satisfied with implementation rate of program

- Customers may see this as a way to justify increase in bills

Public Pressure on Government to Change Direction

- Program will not be completed prior to some political events

- Public pressure on government to reverse decisions

Changing Technologies

- The rapid change of the technology may also be considered as barrier. Changes in

technological aspect also consider before implementing new IS that in effect relate to

planning. As a result, it can insure the effectiveness of the new system and cope up in the
competing issue in the market.

REFERENCES:

1. Dr. N P Singh, MIS,2006

2. http://ecomputernotes.com/mis/structure-and-classification/explain-mis-classification

3. https://www.tutorialspoint.com/management_information_system/decision_support_syste

m.htm

4. http://mc-mis.wikifoundry.com/page/Expert+System