Data Processing and

Management Information
System: Difference
1. The data processing functions are data collection, manipulation,
and storage as used to report and analysis
business activities. The data processing system is oriented
primarily to processing transactions for day-to-day operations.

The transactions include sales orders, shipping orders, inventory

orders, and payroll data. For most of these transactions, routine
procedures can be established and carried out repetitively to do the
processing required. The procedures become part of the data
processing system.

2. An MIS that functions properly processes and analyses data to

provide, in particular planning and control information that
supports the decision making role of management. A management
information system (MIS) performs substantial functions beyond
those of a data processing system.

The MIS involves a man/machine system that provides information

for managers to use as they perform their managerial functions of
planning, organising, staffing, directing, and controlling. Such a
system supports basic transaction processing as does a data
processing system. It also provides information about the past,
present, and future (forecasts) as each relates to the operations
within the organisation and within its environment.

A data processing system is not an MIS. Two major

distinctions between these types of systems are:
(1) The characteristics of the information they require, an:

(2) The decisions that are made based on this information. Fig.
39.2 summarises these differences.
What is Manual System ?
Definition: “ A manual system is like a bookkeeping system in
which records maintenance is done by hand, without using a computer
system or any automatic system. In this type of system transactions are
written in journals, from which the information is manually retrieved into
a set of financial statements. These systems suffer from higher rate of
inaccuracy, and they are much slower than computerized systems. ”

Manual systems can waste both money and time. For example,
administrators can spend a breathtaking amount of time searching for
misplaced documents in a manual system, costing U.S. companies up to
$89 billion each year. It's not just money lost, but people, too. The
research reports that searching for lost and misplaced documents
accounts for nearly 38 working hours per year for each employee. This
has a big, negative ripple effect on professional perception, workplace
productivity and organizational morale. Employees tend to leave
disorganized organizations, and the frustration of working with manual
systems can be a primary driver of employee turnover.

The effect on service delivery is also quite obvious, since customer

frustration grows and company reputations diminish whenever
documents generated by manual processes are misplaced. Automated
systems reduce paper and make data storable, retrievable and
searchable. Once automated systems are implemented, the time your
employees waste searching for misplaced documents can be spent on
more strategic, value-generating activities.
Stages of data processing

1. Data collection

Collecting data is the first step in data processing. Data is pulled

from available sources, including data lakes and data warehouses. It is
important that the data sources available are trustworthy and well-built
so the data collected (and later used as information) is of the highest
possible quality.

2. Data preparation

Once the data is collected, it then enters the data preparation

stage. Data preparation, often referred to as “pre-processing” is the
stage at which raw data is cleaned up and organized for the following
stage of data processing. During preparation, raw data is diligently
checked for any errors. The purpose of this step is to eliminate bad data
(redundant, incomplete, or incorrect data) and begin to create high-
quality data for the best business intelligence.

3. Data input

The clean data is then entered into its destination (perhaps a CRM
like Sales force or a data warehouse like Redshift), and translated into a
language that it can understand. Data input is the first stage in which
raw data begins to take the form of usable information.

4. Processing

During this stage, the data inputted to the computer in the previous
stage is actually processed for interpretation. Processing is done using
machine learning algorithms, though the process itself may vary slightly
depending on the source of data being processed (data lakes, social
networks, connected devices etc.) and its intended use (examining
advertising patterns, medical diagnosis from connected devices,
determining customer needs, etc.).
5. Data output/interpretation

The output/interpretation stage is the stage at which data is finally

usable to non-data scientists. It is translated, readable, and often in the
form of graphs, videos, images, plain text, etc.). Members of the
company or institution can now begin to self-serve the data for their own
data analytics projects.

6. Data storage

The final stage of data processing is storage. After all of the data is
processed, it is then stored for future use. While some information may
be put to use immediately, much of it will serve a purpose later on. Plus,
properly stored data is a necessity for compliance with data protection
legislation like GDPR. When data is properly stored, it can be quickly and
easily accessed by members of the organization when needed.

Components of MIS and their relationship

Data – the recorded day to day business transactions. For a bank, data is
collected from activities such as deposits, withdrawals, etc.

Hardware – hardware is made up of the computers, printers,

networking devices, etc. The hardware provides the computing power for
processing data. It also provides networking and printing capabilities. The
hardware speeds up the processing of data into information.

Software – these are programs that run on the hardware. The

software is broken down into two major categories namely system
software and applications software. System software refers to the
operating system i.e. Windows, Mac OS, and Ubuntu, etc. Applications
software refers to specialized software for accomplishing business tasks
such as a Payroll program, banking system, point of sale system, etc.
future of data processing
The future of data processing lies in the cloud. Cloud technology builds on the convenience
of current electronic data processing methods and accelerates its speed and effectiveness.
Faster, higher-quality data means more data for each organization to utilize and more
valuable insights to extra.

As big data migrates to the cloud, companies are realizing huge benefits. Big data
cloud technologies allow for companies to combine all of their platforms into one easily-
adaptable system. As software changes and updates (as it does often in the world of big
data), cloud technology seamlessly integrates the new with the old.

The benefits of cloud data processing are in no way limited to large corporations. In
fact, small companies can reap major benefits of their own. Cloud platforms can be
inexpensive and offer the flexibility to grow and expand capabilities as the company grows.
It gives companies the ability to scale without a hefty price tag.

The future of data processing lies in the cloud. Cloud technology builds on the convenience
of current electronic data processing methods and accelerates its speed and effectiveness.
Faster, higher-quality data means more data for each organization to utilize and more
valuable insights to extra.

As big data migrates to the cloud, companies are realizing huge benefits. Big data
cloud technologies allow for companies to combine all of their platforms into one easily-
adaptable system. As software changes and updates (as it does often in the world of big
data), cloud technology seamlessly integrates the new with the old.

The benefits of cloud data processing are in no way limited to large corporations. In
fact, small companies can reap major benefits of their own. Cloud platforms can be
inexpensive and offer the flexibility to grow and expand capabilities as the company grows.
It gives companies the ability to scale without a hefty price tag.