MANAGEMENT INFORMATION SYSTEM

MIS DEFINITION
The MIS is defined as a system which provides information support for decision
making in the organisation. It is an integrated system of man and machine for
providing the information to support the operations, the operations, the management
and the decision making function in the organisation.

The system is based on the database of the organisation evolved for the purpose of
providing information to the people in the organisation. It is also called as a
Computer-based information system.

Management: A MIS can be evolved of a specific objective after systematic

planning and design. It calls for an analysis of a business management views and
policies, organisation culture and the management style. The information should be
generated in this setting and must be useful in managing the business.

Information is processing of data collected from various sources. The processing

should be need based and uses tools & techniques of management principles.
Data is the raw facts and figures, which are actually the events and activities
happening around the organisation.
 MANAGEMENT INFORMATION SYSTEM

MIS DEFINITION Contd…

System: A system is a well defined step by step process for managing different
activities integrating concept and techniques of information technology (Hardware &
Software) with the management principles.

MIS uses the principles of System Design, viz., an open system or a closed system.

An Open system of the MIS offers an ability of continuous adjustment or correction

in the system in line with the environmental changes. Such a design helps to keep the
MIS tuned with the business management needs of the organisation.

A Closed system does not offer any adjustment and modifications in the system. Its
design remains static and most of time becomes obsolete in using current
environmental changes.
 MANAGEMENT INFORMATION SYSTEM

EVOLUTION
Initial concept of MIS was to process data from the organisation and presents it in
the form of reports at regular intervals.
When a distinction was made between data and information, that the information is
a product of an analysis of data. The need evolves to specified information and not
a mass of data. The concept was then evolved that the system should be capable of
handling a need based exception reporting.

This need may be either of an individual or a group of people. This called for
keeping all data together in such a form that it can be accessed by anybody and can
be processed to suit his needs. The concept is that the data is one but it can be
viewed by different individuals in different ways. This gave rise to the concept of
DATABASE, and the MIS based on the DATABASE proved much more effective.

In today’s world the concept of MIS is a system which handles the databases,
provides computing facilities to the end user and gives a variety of decision making
tools to the user of the system.
 MANAGEMENT INFORMATION SYSTEM

EVOLUTION Contd..

The foundation of MIS is the principles of management and its practices. MIS
uses the concept of management control in its design and relies heavily on
the fact that the decision maker or the manager is a human being and is a
human processor of information.

The concept, therefore, is a blend of principles, theories and practices of the

Management, Information and System giving rise to single product knows as
Management Information System (MIS).
 MANAGEMENT INFORMATION SYSTEM

A MIS should take care of the following -

• Handling of a voluminous data.

• Confirmation of the validity of data and transaction.

• Complex processing of data and multidimensional analysis.

• Quick search and retrieval

• Mass storage

• Communication of the information system to the user on time.

• Fulfilling the changing needs of the information.

 MANAGEMENT INFORMATION SYSTEM

ROLE OF MIS

• MIS Facilitates appropriate collection of data from various sources.

• It fulfills information needs of an individual, a group or the whole management

functionaries i.e. manager & top management.

• It satisfies diversified need though a variety of system such as

Query System,
Data Analysis,
Modeling systems &
Decision support systems.

• It helps the organisation in

Strategic planning,
Management Control,
Operational Control and
Transaction Processing.
 MANAGEMENT INFORMATION SYSTEM

ROLE OF MIS

• It helps the
Clerical Personnel - In their transaction processing.
- Answering queries
- Giving status of record
- References on a verity of documents.

Junior Management - Providing operational data for planning, Scheduling &

control In decision making at operations level to correct & control situation.

Middle Management - Short term planning Target setting controlling business

functions. (with the use of management tools of planning & Control)

Top Management - In Goal setting, Strategic Planning, Evolving business plans,

Implementation of business plans.

Thus MIS plays the role of information generation, communication, problem

identification and helps in the process of decision making. It plays a vital the in the
management, administration and operations of an organisation.
 MANAGEMENT INFORMATION SYSTEM
MIS and the Computers
Translating the real concept of MIS into reality is technically impossible if not
supported by computers. MIS relies heavily of the hardware and software capacity
of the computer and its ability to store, access, retrieve and communicate without
any limitations.
• Large Database – distributed database capability
• Bulk Data - Handles bulk data volumes, storage, access
• Data Processing - Sorting and merging manipulations
• Data types - Capability of handling digital, image, graphic, word,
voice and text processing
• Data security – read only, update, delete, password authentication, module
access (Layered access facility) and thus MIS becomes a safe application
• Software Support – Procedural and non procedural data processing, attractive
Front end, presentation utilities
• Data communication – networking, data transfer, data sharing and data access.
• User friendly – end user can easily handle, no prior knowledge of
computer systems, attractive, no complicities, use of standards
Thus advancement in computers and the communication technology has made the
distance, speed, volume and complex computing and easy task.
 MANAGEMENT INFORMATION SYSTEM

PROCESS OF MANAGEMENT

Management process is a rational approach having steps to be taken in a

defined order.

First step : Setting of Goals, Objectives & Targets

Second step : Generating the Alternatives (Course of Action)

Third step : Selecting the Feasible Alternative

Fourth step : Testing the Alternative (Pilot Testing)

Fifth step : Implementation

Sixth & final : Controlling (Monitoring & taking Corrective Action if

required)
 MANAGEMENT INFORMATION SYSTEM
MIS: A TOOL FOR MANAGEMENT PROCESS
Process of management requires a lot of data and information for the execution of
plan. A variety of decisions are taken to correct the course of development. These
decisions can be taken promptly when feedback of the work in progress is provided
on real time basis and in proper format and manner. Following the various
characteristics of MIS which proves to be a good tool for management processes:

• The management process is effective when risk and uncertainties are handled by
the prompt and appropriate information. A good MIS furnishes adequate
information to the managers or decision makers to expand their
knowledge base. Managers must be aware of the adverse trends in the
business, the shortfalls, and failures.

• MIS should provide support to the management at different levels in terms of

basic information needs to the managers. The top level management,
middle level and the lower level requires information of different types as
per their specific needs, which is provided by the MIS.

• MIS should highlight on critical success factors & support key areas of
management.
 MANAGEMENT INFORMATION SYSTEM

MIS: A TOOL FOR MANAGEMENT PROCESS

• MIS should have decision support systems to help the managers in decision
making.
• Modern management relies on the MIS in providing accurate data and
information promptly.

• Complexity of business management and competitive nature of business requires

handling of business operations and skill and foresight to avert the crisis.
This is possible only through MIS.

• MIS can be helpful in making managers more efficient, more knowledgeable and
experienced. It can support the managers in developing analytical skills
and in facing the uncertainties and the risks of the business of today’s
business environment.
 DECISION SUPPORT SYSTEMS (DSS)

Concept and philosophy

Decision Support Systems are an application of Herbert Simon Model the model has
three phases, viz. Intelligence Design and Choice. The decision support system
basically helps the information system in the intelligence phase where the objective
is to identify the problem and then go to the design phase for solution.

The decision support system helps in making a decision and also in its performance
evaluation. These systems can be used to validate the decision by performing
sensitivity analysis on various parameters of the problem.

In decision making, there are two types of decision- Programmable and Non-
programmable. The programmable decision, because of its rule base structure, can
be computerized, as inputs, processing methodology; analysis and choice of
decision making are predetermined. Decision support systems can be built around
the rule in case of programmable decision situation. While in Non-programmable
decision, the rules are not fixed or predetermined, and requires every time the user
to go through the decision making cycle.

The decision support system refers to a class of systems which support in the
process of decision making and does not always give a decision itself.
 DECISION SUPPORT SYSTEMS (DSS)

Attributes of Decision Support System

Flexibility- The systems are flexible so that any semi-structured or unstructured

decision making situation can be tackled with ease and speed.

Simple models – The systems use simple models of decision making. The only
change is that a different set of information is sought for the use of different
models. The choice of model depends upon the complexity of decision making.

Database – The decision support system need database(s). The system calls for
several inputs from database (s) for decision making. The use of information being
common, input to the system is from the database.
 DECISION SUPPORT SYSTEMS (DSS)

Types of Decision Support System

Status inquiry systems- The number of decision in the operational management

and some at the middle management are such that they are based on one or two
aspect of a decision making situation. If the statue is known, the decision is
automatic, i.e., the status and solution is unique relation.

Data analysis systems- These are based on comparative analysis, and use of a
formula or an algorithm. But, these processes are not structured and, therefore,
vary. The cashflow analysis, the inventory analysis and the personal inventory
systems are examples of the analysis systems. The use of simple data processing
tools and business rules are required to develop this system.

Information analysis systems- In this system, the data is analysed and information
reports are generated. The reports might be having exceptions as a feature. The
decision makers use these reports for assessment of the situation for decision
making. The sales analysis, the accounts receivable systems, the market research
analysis, the MRP systems are examples of this system.
 DECISION SUPPORT SYSTEMS (DSS)

Types of Decision Support System

Accounting systems- These systems are not necessarily required for decision
making but they are desirable to keep track of the major aspects of the business
or a function. The contents of these systems are more data processing leading to
formal reporting. Examples are cash, inventory, personnel etc.

Model based systems- These systems are simulation models or optimization

models for decision making. These decisions are for one time used and provide
general guidelines for operation or management. The product mix decision, the
material mix, the job scheduling rules, and the resource or asset or facilities
planning systems are the examples.
 DECISION SUPPORT SYSTEMS (DSS)

Certain features of Decision Support Systems

• The decision support systems are developed by the users and System Analysis
jointly.
•The decision support system uses the principles of economics, science and
engineering, and also the tools and techniques of management.
•The data used in the decision support system is drawn from the information
systems developed in the company.
•The decision support systems are developed in isolation and form an independent
systems subset of the management information system.
•The most common use of the decision support system is to test the decision
alternatives and also to test the sensitivity of the result to the change in the system
and assumptions.
•The data and information for the decision support system are used from the
internal sources such as the database and the conventional files, and from the
external sources.
 DECISION SUPPORT SYSTEMS (DSS)

MIS and the Role of DSS- The Decision Support System (DSS) is a special class of
system which is used as a support in decision making.

•These systems use data from the general MIS and they are used by a manager or a
decision maker for decision support
•These systems are used sometimes for testing new alternatives, training and
learning. They are also used for sensitizing the various parameters of the model.
•The DSS could be an internal part of the MIS. When the decision making need is in
real time dynamic mode, all such systems are designed to read, measure, monitor,
evaluate, analyse and act as per the decision guidance embedded in the system.
•The DSS, in all such cases, uses the data already present in the system and gets it
activated for action as per the guidelines.
•The MIS would become more useful if the decision making is made person-
independent and executed with well-designed DSS.
 DECISION SUPPORT SYSTEMS (DSS)

MIS and the Role of DSS-

•When the decision situation requires multidimensional analysis using the internal
and external data, then such decision support systems are kept out of the main MIS
design scope. Most of these situations call for the use of models and the nature of
decision is strategic, calling for planned activity.

•Decisions like a new product launch, price revision, appointing new dealers,
change of product design or change in the manufacturing process are strategic
decisions which require critical analysis of data, careful evaluation of various
alternatives and selecting one of them for implementation on the given criteria.
 DECISION SUPPORT SYSTEMS (DSS)

Types of Tools/Models

DSS

BEHAVIOURAL MANAGEMENT OPERATIONS

MODELS SCIENCE MODELS RESEARCH MODELS

Behavioral models
•Forecasting: Regression models
•Forecasting : Time series analysis and exponential smoothing
•Market research methods
•Ratio analysis for financial assessment
 Management Science models
•Budgeting models
•Break-even analysis model
•Return on investment analysis
•Model for cash budgeting
•Project Planning and Control Models
•Network drawing and PERT/CPM statistics
•Cost Accounting Systems
•Job order cost system, Process cost system, Period cost system

Operations research (OR) Models

•Mathematical programming techniques
•Linear programming model(LP)
•Inventory Control Models
•A-B-C analysis
•Material requirement planning (MRP) system
 TRANSACTION PROCESSING SYSTEM

A transaction is processed with reference to business rules, i.e. a

transaction is scrutinized for conformance to the rules, policy or
guidelines before it is taken up for further processing.
The rules may be directly related to the transaction or it may have some
relation and association with other transactions.
In case, if the transaction does not conform to the set of specified
conditions governed by the rules the error is displayed for user to take
corrective action.
 TRANSACTION PROCESSING SYSTEM
A transaction is basically processed for three aspects:-
(a) Adherence to business rules,
(b) Correctness and consistency of values, and
(c) For validity of transaction for acceptance.
These three aspects are applicable to all the transactions across the business
management functions.

Take an example of the goods receipt as a transaction. After Checking the data
entities, the goods receipt transaction is subjected to further checks for
acceptance and execution.
The business rules in case of this transaction are:
•The purchase order must be present and open and the item received should be
present on Purchase Order. Further, the receipt is as per the scheduled date.
•The supplier has sent the necessary supporting documents such as Excise Gate
Pass, Octroi Challan, Sales Tax Form, Certification by Third Party, etc.
•Such other conditions that may be applicable.
 TRANSACTION PROCESSING SYSTEM

When the receipt transaction is to be processed, it will first be processed for

confirmation and conformance of these rules. The rules are checked at the entry
level processing after the individual data fields are checked. If anyone rule is
not satisfied, the transaction is kept under hold for correction. If the correction
is not possible, the receipt transaction is rejected.

The persons designing transaction processing system must have or acquire the
knowledge of business rules for introducing them in the transaction processing
system. In the absence of this knowledge or by not incorporating them, it is
possible that the transaction would be violating the business rules of the
transaction.

The next check in transaction processing is to confirm internal consistency,

correctness and completeness of the data. The receipt transaction should be
confirmed for a consistency between the quantity sent, the quantity received,
the quantity accepted and the quantity rejected.
 TRANSACTION PROCESSING SYSTEM

The third check after confirming the data quality and observance of the
business rules is for validity of the transaction itself for its use in application
and system processing. The validity of the transaction is checked against the
conditions present outside the domain of transaction.
For example, the transaction of the Fixed Deposit might go through all checks
at the data level and at the transaction level, it is not acceptable as the total
deposit permitted is already received.

Further in case of the goods receipt transaction which is in order by all

dimensions but needs to be authorised by the higher authority for an
insignificant quantity of excess delivery.
Thus in some cases the transaction on the basis of the internal considerations is
made valid by imposing external conditions where the application is optional
by the higher authority.
 Enterprise Management System (EMS)
Enterprise Management System is an integrated solution out of the
technologies and systems offering enterprise wide management support.
Such a system which, when implemented in an integrated manner for
coordinated and cooperate function of the business give rise to EMS.

Components of EMS
• Enterprise Resource Planning (ERP)
• Electronic Data Interchange (EDI)
• CAD / CAM / CAE(Computer Aided Design / Manufacture / Engg. systems)
• Attendance Management System (AMS)
• Document Management System (DMS)
• Communication Management Systems (CMS)
• Security Management System (SMS)
These six systems together act as the support systems to the ERP. Each one of them
have a specific technology to handle the function and are equipped to capture, store,
process and transfer the data to the ERP. Each of these systems operate on their native
systems and are interfaced to the ERP through the gateway by using a specific software.
Enterprise Management System (EMS)
 Enterprise Management System (EMS)
Components of EMS
Enterprise Resource Planning (ERP) : In the EMS, the Enterprise Resource Planning
(ERP) system plays the role of front running system. The major decision making and its
execution takes place through the ERP. It is a system of managing all functions of the
business with information support coming through the ERP.
Electronic Data Interchange (EDI) system assists the ERP in connecting two systems
electronically for E-Mail, Documents. Transfer, Data Transfer, etc. It is designed to
handle the commercial functions of the business known as the electronic commerce. It
also acts as a gateway to interact with the vendor, the Customer, and the other
associated institutions of the organisations.
CAD / CAM / CAE, i.e., Computer Aided Design / Computer Aided Manufacture /
Computer Aided Engineering systems are the systems which handle design,
manufacturing and Engineering functions. It will provide the drawings and design
engineering information to the ERP execution of manufacturing, purchase and
inspection functions.
The AMS, i.e., Attendance Management System keeps track of the employee related
information personnel planning, availability and scheduling. It provides static
information about an employee through the human resources management system.
 Enterprise Management System (EMS)
Components of EMS
The DMS i.e. Document Management System viz., imaging, copying and text
management and dispatching document DBMS, is designed to keep important
documents in database for viewing, sending messages, and for documenting support in
the transactions handled. The system provides text edit facility for document
manipulation for the purpose of transaction handling. In the ERP it is used for cross-
checking the key information and also to control the authenticity of the transaction.
Applications of Attendance Management Systems are employee attendance or Data
Capture Systems on floors, in stores, at gates, etc.

The CMS or the Communication Management Systems such as, paging, cordless,
mobile telephone systems and the audio video systems are used for tracking the
important resource for action. These resources are located, altered and advised to act
from the location where they are.

The SMS, i.e., the Security Management System handles the security, entry access
requirement of the business operations. It may be a person, a vehicle, or material, its
movement, availability and access if tracked, monitored, and guarded for security and
safety. Security Management Systems such as the close circuit television, alarm or
warning systems, movement tracing systems, etc.
 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM
The ERP is a package encompassing all major functions of the business. The
product is generic in nature and is supposed to incorporate the best business
practices, generally followed in most of the companies.

SAILENT FEATURES
1. The ERP system deals with the planning and use of resources used in the
business. The resources are finance(Money), Materials, Machines,
Manufacturing capacity Human resource(Manpower) and Market.
2. The ERP provides methodology of assessing the resource needs for a given
business plan to achieve certain business objectives.
3. It also helps to execute the strategies, plans, decisions, and actions in a time
bound manner.
4. The ERP provides a support system in the transaction processing, updation,
and reporting across the functions.
5. The system design of the ERP is integrated with the features and functions
providing an enterprise wide solution to handle all the process functionalities.
 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM

6. The ERP packages build information base and provide knowledge base for
planning and control of the business through the business function
management.
7. ERP Facilitates security authorization, referencing responsibility, and the
implementation of the business rules. These are provided to safeguard the
business of the organisation from illegal practice and also to protect the
valuable information from misuse.
8. The ERP usage can be controlled at all levels, viz., the data, transaction,
information and analysis level.
9. It provides access and updation rights to the users as per the control
requirement of the management.
 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM

The ERP solutions are available on the Unix platform and also on Windows NT. The
solution is structured in the modular fashion to cover the entire business operation.

A typical ERP solution has following modules:

1. Sales, Marketing, Distribution
2. Manufacturing
3. Stores Management
4. Finance
5. Personnel
6. Maintenance
7. Purchase, Inventory
8. Planning and Control
 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM
BENEFITS OF THE ERP
1. Better management of resources reducing the cost of operations.
2. Planning at function and process level. Simultaneous increase in the
productivity of the business possible.
3. Customer satisfaction increase due to shorter delivery cycle. Closer
contact with the customer.
4. Simultaneous activitisation of the decision centers because of instant
inducement through triggers or updates.
5. Business operations transparency between business partners cutting
down the execution time of critical business operation.
6. Intelligent ERP download the decision making at lower level, releasing the
burden on the middle management.
7. Due to faster processing technology and SQL, management can see the
information in their perspective and take different view of the business.
8. Due to strong interface capabilities, the human resource can be utilised
better due to access to information across the databases distributed over
the organisation.
 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM
BENEFITS OF THE ERP
9. Since, the ERP design is proactive, it make the management alert at a
number of points demanding the decision or action.
10. The processes become faster due to work group technology and application
of work flow automation.
11. Due to the support technologies like EDI, E-mail, office automation,
paperless office is a newer possibility as communication is faster and systems
get connected directly.
12. The ERP still remain a valid solution with the expansion of business as it is a
scalable architecture.
13. Due to the client/ server architecture, the application of object technology
and use of the front end tools, the process changes can be easily carried out
in a short duration of time. Hence, the user service can be maintained at
higher level.
14. The ERP implementation automatically leads to the usage of the best
business procedures bringing the consistency of operation in the world of
business.
 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM
BENEFITS OF THE ERP
15. With the use of the data warehousing and data reverse engineering,
management becomes knowledge driven and the organisation becomes a
learned one.
16. The ERP scope can be enlarged through the Internet/Intranet access, making
the ERP sensitive to the latest events in the business, market and technology.
17. The quality of decision making improve as the user decision maker is made
alert and he is made knowledgeable and better informed dynamically.
18. The tools available to the decision maker are friendly whereby he is
equipped to make decision and execute it simultaneously.
 Operations Support System

Information systems have already been needed to process data

generated by and used in business operations.

Such Operations Support Systems produce a variety of information

products for internal and external use.

They do not emphasize producing the specific information products that

can best be used by managers.

The role of business firm’s Operations Support System is to efficiently

process business transactions, control industrial processes, support
enterprise communications and collaboration and update corporate
databases.
 Enterprise collaboration systems

Enterprise collaboration systems also office automation

systems.
For example knowledge workers in a project team may use
email to send and receive electronic messages and
videoconferencing to hold electronic meetings to coordinate
their activities.

It support team, work groups and enterprise communication.

Example email, chat and video conferencing group ware
systems.
 Process Control Systems

Process Control Systems monitor and control physical

processes.
For example, a petroleum refinery uses electronic sensors
linked to computers to continuous monitoring of chemical
processes and make instant(real time) adjustments that
control the refinery process.

It monitor and control industrial processes like petroleum

refining, power generation, and steel production system.
 Management Support Systems

When information system applications focus on providing

information and support for effective decision making by
managers, they are called Management Support Systems.
Providing information and support for decision making by all
types of managers and business professionals is a complex
task.
Conceptually several major types of information systems
support a variety of decision making responsibilities.
MIS
DSS
EIS (Executive information systems)
 EIS (Executive information systems)

These provide critical information from a variety of internal

and external sources in easy to use displays to executives and
managers.

For example top executives may use touch screen terminals to

instantly view text and graphics displays that highlight key
areas of organizational and competitive performance.

It Provide critical information system from MIS, DSS and other

sources tailored to the information needs of executives.
Example: systems for easy access to analyse the business
performance, actions of competitors, and electronic
developments to support strategic planning .