Unit 1_ MHM 1

Data... data is raw. It simply exists and has no significance beyond its existence (in and of itself). It
can exist in any form, usable or not. It does not have meaning of itself. In computer parlance, a
spreadsheet generally starts out by holding data.

Information... information is data that has been given meaning by way of relational connection.
This "meaning" can be useful, but does not have to be. In computer parlance, a relational database
makes information from the data stored within it.

Knowledge... knowledge is the appropriate collection of information, such that its intent is to be
useful. Knowledge is a deterministic process. When someone "memorizes" information (as less-
aspiring test-bound students often do), then they have amassed knowledge. This knowledge has
useful meaning to them, but it does not provide for, in and of itself, integration such as would infer
further knowledge. For example, elementary school children memorize, or amass knowledge of, the
"times table". They can tell you that "2 x 2 = 4" because they have amassed that knowledge (it being
included in the times table). But when asked what is "1267 x 300", they cannot respond correctly
because that entry is not in their times table. To correctly answer such a question requires a true
cognitive and analytical ability that is only encompassed in the next level... understanding. In
computer parlance, most of the applications we use (modeling, simulation, etc.) exercise some type
of stored knowledge.

MIS refers broadly to a computer-based system that provides managers with the tools
for organizing, evaluating and efficiently running their departments.

The management needs full information before taking any decision. good decisions can minimize costs
and optimize results. Management information system can be helpful to the management in undertaking
management decisions smoothly and effectively.

Management information system can be analyzed thus:

1. Management: management covers the planning, control, and administration of the operations of a
concern. The top management handles planning; the middle management concentrates on controlling; and the
lower management is concerned with actual administration.
2. Information: information, in MIS, means the processed data that helps the management in planning,
controlling and operations. Data means all the facts arising out of the operations of the concern. Data is processed
i.e. recorded, summarized, compared and finally presented to the management in the form of MIS report.
3. System: data is processed into information with the help of a system. a system is made up of inputs,
processing, output and feedback or control.

Thus MIS means a system for processing data in order to give proper information to the management for
performing its functions.

What is MIS?
 Right Information
 To the right person
 At the right place
 At the right time
 In the right form
 At the right cost
 Unit 1_ MHM 2

Role of MIS in Management:

 The role of the MIS in an organization can be compared to the role of heart in the body. The information
is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all the elements
of the body including the brain. 
 The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is
collected from the various sources, processed, and sent further to all the needy destinations. The system is
expected to fulfill the information needs of an individual, a group of individuals, the management functionaries:
the managers and the top management. 
 The MIS helps the clerical personnel in the transaction processing and answers their queries on the data
pertaining to the transaction, the status of a particular record and references on a variety of documents.
 The MIS helps the middle management in short them planning,target setting and controlling the business
functions. It is supported by the use of the management tools of planning and control.
 The MIS plays the role of information generation, communication, problem identification and helps in the
process of decision making. The MIS, therefore, plays a vita role in the management, administration and
operations of an organization.

Characteristics Management Information System

Characteristics for a good management information system are briefly discussed

below:
1. Management Oriented: It means that effort for the development of the information system should start from
an appraisal of management needs and overall business objectives. A good management information system is
not necessarily meant for top management only, it may also meet the information requirements of middle level or
operating levels of management as well.
2. Management directed: Because of management orientation of MIS, it is necessary that management should
actively direct the system’s development efforts. Mere one time involvement is not enough. For system’s
effectiveness, it is necessary for management to devote their sufficient time not only at the stage of designing the
system but for its review as well, to ensure that the implemented system meets the specifications of the designed
system. In brief, management should be responsible for setting system specifications and it must play
a key role in the subsequent trade off decisions that occur in system development.
3. Integrated: Development of information should be an integrated one. It means that all the functional and
operational information sub-systems should be tied together into one entity. An integrated information system
has the capability of generating more meaningful information to management. The word integration here means
taking a comprehensive view or a complete look at the inter locking sub-systems that operate within a company.
4. Common data flows: It means that the use of common input, processing and output procedures and media
whenever possible is desirable. Data is captured by system analysts only once and as close to its original source
as possible. They, then, try to utilise a minimum of data processing procedures and sub-systems to process the
data and strive to minimize the number of output documents and reports produced by the system. This eliminates
duplication in data collections and documents and procedures. It also simplifies operations and produces an
efficient information sytem. However, some duplication is necessary in order to insure effective information
system.
5. Heavy planning element: A management information system usually takes 3 to 5 years and sometimes even
longer period to get established firmly within a company. Therefore, a heavy planning element must be present in
MIS development. It means that MIS designer should keep in view future objectives and requirements of firm’s
information in mind. The designer must avoid the possibility of system obsolescence before the system gets into
operation.

INFORMATION
 Unit 1_ MHM 3

Information: Information is data that has been processed into a form that is meaningful to the recipient and is of
real or perceived value in current or progressive decision. The term data and information are often used
interchangeably. However, the relation of data to information is that of raw material to finished product.
Characteristics of Information: The important characteristics of useful and effective information are as
follows:
(i) Timeliness: Timeliness refers to when user needs information. Some information is required on regular,
periodic basis – perhaps daily, weekly, monthly or quarterly, while much other information is generated on the
request of the manager. Usually as we proceeds from lower level to higher level of management, the time interval
necessary for
providing decisions impelling information on a routine or on exception basis increases at strategic level.
(ii) Purpose: Information must have purposes at the time it is transmitted to a person or machine, otherwise it is
simple data. Information communicated to people has a variety of purposes because of the variety of activities
performed by them in business organisations. The basic purpose of information is to inform, evaluate, persuade
and
organize. It helps in creating new concepts, identifying problems, solving problems, decision making, planning
and controlling.
(iii) Mode and Format: The mode of communicating information in business are either visual, verbal or in
written form. Format of information should be so designed that it assists in decision-making, solving problems,
planning, controlling and searching. Therefore, all the statistical rules of compiling statistical tables and
presenting information by means of diagram, graph, curves etc. should be considered. The reports should be
preferably supplied on an exception basis to save the manager from an overload of information. Also the data
should be classified into categories, which have relevance to the problem at hand.
(iv) Redundancy: It means the excess of information carried per unit of data. However, in business situation
redundancy may some time be necessary to safeguard against error in the communication process.
(v) Rate: The rate of transmission/reception of information may be represented by the time required to
understand a particular situation. Quantitatively, the rate for humans may be measured by the number of numeric
characters transmitted per minute. For machines,the rate may be based on the number of bits of information per
character per unit of time.
(vi) Frequency: The frequency with which information is transmitted or received affects its value. Frequency
has some relationship with the level of management and it should also be related to operational needs. For
example, at the level of foreman it should be on weekly basis but at the management level, it should be usually
on monthly basis.
(vii) Completeness: The information should be as complete as possible. For example, net present value models
provide a point estimate and do not give any indication of the range within which these estimates may vary.
Thus, complete information helps the manager to arrive at better decisions.
(viii) Reliability: In statistical surveys, for example, the information that is arrived at should have an indication
of the confidence level. Even otherwise also, information should be reliable.
(ix) Cost benefit analysis: The benefits that are derived from the information must justify the cost incurred in
procuring information. The information may be categorised into three categories: (i) necessary (ii) normal and
(iii) extra. The information of necessary category cannot be discontinued whatever be the cost of preparing them.
The second category statements may have a high cost but may be discontinued only in very stringent
circumstances. Some of the normal statements can be discontinued or replaced if their costs are too high.
(x) Validity: It measures the closeness of the information to the purpose, which it purports to
serve. The measures suiting the organisation may have to be carefully selected or
evolved.
(xi) Quality: It refers to the correctness of information, which is likely to be spoiled by
personal bias. Hence, proper internal controls and procedures should be developed.

LIMITATIONS OF MIS

The main limitations of MIS are as follows:

(i) The quality of the outputs of MIS is basically governed by the quantity of input and processes.
(ii) MIS is not a substitute for effective management which means that it cannot replace managerial judgment in
making decisions in different functional areas. It is merely an important tool in the hands of executives for
decision making and problem solving.
 Unit 1_ MHM 4

(iii) MIS may not have requisite flexibility to quickly update itself with the changing needs of time, especially in
fast changing and complex environment.
(iv) MIS cannot provide tailor-made information packages suitable for the purpose of every type of decision
made by executives.
(v) MIS takes into account mainly quantitative factors, thus it ignores the non-quantitative factors like morale
and attitude of members of organization, which have an important bearing on the decision making process of
executives.
(vi) MIS is less useful for making non-programmed decisions. Such type of decisions are not of the routine type
and thus require information, which may not be available from existing MIS to executives.
(vii) The effectiveness of MIS is reduced in organizations, where the culture of hoarding information and not
sharing with other holds.
(viii) MIS effectiveness decreases due to frequent changes in top management, organizational structure and
operational team.

The Hotel Information System (HIS) supports the management and operation for the Front and Back-office of a
hotel or hotel chain. Those management and operational functionalities are implemented as twelve modules,
whose speci¯c proce- dures were programmed to become the content of a business rules repository. The
following is a list of these modules and the \business context that organize their operations":
Reservations. Individual reservation, group reservations, airline crew management, rooming list, availability con-
trol, availability forecasting.
Front Desk. Guest check-in, group check-in, hotel status, credit management, guest folios, client's account state-
ments, guest checkout.

Housekeeping. Room status, room blockade, guest requirements service, maid work orders.
Telephone control. Tarifs catalog, schedule discounts, ser-vice costs, receipt printing, telephone switch control,
maid status, line management, call accounting.
Night audit. Daily room update, automatic posting, cashiers shift review, audit sheet.
Sales. Sale statistics, packages and plans, travel agencies, allotments control, groups, sale forecasting.
Guest History. Guest stays history, promotional plans, guest preferences.
Club Management. Resort club services: Spa, boutique, snack bar, therapies control, special plans, tennis, golf.
Accounting. Forecasting, departmental accounting, transactions, uniform system of accounts, financial models,
executive ¯nancial information.
Accounts Receivables. Statements, AR projection, balance due.
Accounts Payable. Buy conditions, payments suggestion, discount advantages, partial payments, multiple pay-
ments, payments projection.
Inventory Control. Physical inventory, item location, inventory value, inventory cost, inventory level.
Purchase Orders. Order quote, authorization levels, automatic purchase order generation, automatic orders,
merchandise reception.
 Unit 1_ MHM 5

MIS AND COMPUTERS

The effect of applying computer technology to information system can be listed as below :
(i) Speed of processing and retrieval of data increases : Modern business situations are characterized by high
degree of complexity, keen competition and high risk and reward factors. This invariably calls for systems
capable for providing relevant information with minimum loss of time. Manual systems, howsoever well
organized, often fail to match the demand for information for decision making. Computer with its unbelievably
fast computational capability and systematic storage of information with random access facility has accounted as
a major factor in inducing MIS development.
(ii) Scope of analysis widened : The use of computer can provide multiple type of information accurately and in
no time to decision makers. Such information equips an executive to carry out a thorough analysis of the
problems and to arrive at the final decision. Computer is capable of providing various types of sales reports for
example; area wise sales commission of each salesman, product-wise sales, etc. Which are quite useful in
analyzing the sales department working and to ascertain their weaknesses so that adequate measures may be
taken in time. In this way, the use of computer has widened the scope of analysis.
(iii) Complexity of system design and operation increased : The need for highly processed and sophisticated
information based on multitudes of variables has made the designing of the system quite complex. The computer
manufacturers have developed some important programs (software) that can perform the task of developing
programs to cater to the specialized needs of their customers, either on consultancy basis or on contract.
(iv) Integrates the working of different information sub-system : A suitable structure of MIS may be a
federation of information sub-system, viz., production, material, marketing, finance, engineering and personnel.
Each of these sub-systems are required to provide information to support operational control, management
control and strategic planning. Such information may be made available from a common-data-base that meet out
the information requirements of different information sub-system by utilizing the services of computers for
storing, processing, analyzing and providing such information as and when required.
(v) Increases the effectiveness of Information system : Information received in time is of immense value and
importance to a concern. Prior to the use of computer technology for information purposes, it was difficult to
provide the relevant information to business executives in time even after incurring huge expenses. But now with
the use of computer technology, it is not difficult to provide timely, accurate and desired information for the
purpose of decision making.
(vi) More comprehensive information : The use of computer for MIS enabled systems expert to provide more
comprehensive information to executives on business matters.