BBA – III Sem Management Information System

Unit - 1
Management Information System

What is MIS?
– Management Information System is a computer based information system which is
basically concerned with processing data into information which is then communicated to
the various departments in an organization to support the operations, the management and
the decision making function in the organization.

In other words
– A Management Information System is an information system that
evaluates, analyzes, and processes an organization's data to produce
meaningful and useful information based on which the management can take
right decisions to ensure future growth of the organization.

MIS
– Management information system is a system consisting of people, machines, procedures, databases and
data models, as its elements. The system gathers data from the internal and external sources of an
organization; processes it and supplies Information to assist managers in the process of decision-making.

Definitions: MIS
Davis & Olson: MIS is an integrated user-machine system for providing information to support
operations, management and decision making functions in an organization. The system utilizes computer
hardware and software, manual procedures/models for analysis, planning, control and decision making
and a database.

Kelly: A combination of human and computer based resources which result in collection, storage,
retrieval, communication and use of data for the purpose of efficient management of operations and for
Business Planning.

Definitions (contd.) According to Henry C. Lucas, “MIS is a set of organized

procedures which when executed provide information to support decision-making”.
Krober and Watson has defined MIS as “ an organized set of processes that provide
information to managers to support the operation and decision making within an
organization”.
BBA – III Sem Management Information System

All these definitions show that MIS is

– A system

– It combines human and computer based resources

– It is meant to provide information to managers

– This information enables managers to make timely and effective decisions

Characteristics of MIS MIS follows a system approach. MIS is management oriented MIS is
need based and designed as per information needs of managers MIS is future oriented as it provide information for planning and
future actions. MIS is an integrated system (Integrates Humans and computers, all the organizational departments, internal &
external data) MIS consists of a central database. MIS should be exception based also, and in abnormal situation, there should
be immediate reporting about the exceptional situation to decision makers.

Roles of Management Information Systems

• Automating business processes of an organization

• Capturing data from different sources accurately and quickly

• Performing high-speed, high-volume numerical computations and process voluminous data quickly and
efficiently.

• Providing fast, accurate information, communication and collaboration within and among organizations

• Storing huge amounts of information in a small, easy to access space – Satisfies diverse needs through
variety of systems such as query system, analysis system, modeling system, DSS, etc.

• enabling fast and inexpensive access to large amount of information worldwide

• Analysis and interpretation of vast amounts of data quickly and efficiently

• Increasing the efficiency and effectiveness of managers working in groups in an organization or in

several locations anywhere in the world

• Allowing an organization to become more flexible and responsive

Role of MIS in an Organization

– Provides information to all the levels of management for the following purpose

– Define objectives of the organization

– Formulate strategies & policies to achieve the objectives

– To report organization's performance to tax authorities, share holders, regulatory authorities and other
stake holders such as suppliers & customers etc.
BBA – III Sem Management Information System

– To prepare future plans on short & long term basis

– To exercise day-to-day control on various operations in different functional areas

– To allow management by exception

MIS:Concept
– Management Information system is an acronym of three words, viz.,

 Management,
 Information and
 Systems.

It is a blend of principles, theories and practices of Management, Information and system.

MANAGEMENT
– MANAGEMENT is the effective utilisation of human and material resources to
achieve the enterprise objective . It is a process consisting of the five basic functions: •

1 Planning •

2 Organising •

3 Staffing •

4 Directing •

5 Controlling

Information
– Information, in MIS, means the processed data that helps the management in planning,
controlling and operations.

– Data means unstructured raw facts, observations or unevaluated messages in isolation.

Data involves facts and figures.

– Information on the other hand is like a finished product.

System
BBA – III Sem Management Information System

– A system is an orderly grouping of interdependent components linked together

according to a plan to achieve a specific objective.

– MIS can be seen as assembly of several subsystems such as data collection, transaction
processing and validating, processing, analyzing, storing, etc.

– Human body is a system composed of various parts, which are working together
towards a common objective , that is to live Data Capturing Processing Storage of Data
Retrieval Dissemination Source User Objectives of MIS

Objectives of MIS
– Data capturing (from various internal and external sources)

– Processing of Data (through calculating, sorting, classifying, summarizing)

– Storage of Information (processed or unprocessed)

– Retrieval of Information (from memory where it stores)

– Distribution of Information

Components of Information system

– Components of Information System

 Input
 Processor
 Output
 People
 Hardware(physical devices)
 Software (information processing instructions)
 Data
 Network (communication channels)

Why MIS?
– Manager makes decisions all the time.

– There is an overload of information.

– All information is not useful. Anything which helps manager improve his decision making will obviously
lead to better result.

– MIS is a system, where data is the input, which is processed to provide output in the form of information
reports, summaries, etc . Which aid the manager’s decision-making process
BBA – III Sem Management Information System

Process of Management The management process consists of five primary functions that
managers must perform: planning, organizing, staffing, directing and controlling. Management is a complex process and requires
an excellent manager with adequate management skills for balancing all the different components. Further, in an organization,
managers at all levels are involved in all four functions specified above.

Planning
Planning is all about defining the goals of the organization. The manager should have a vision and plan
for the future. Further, it includes two important components:

1.Determining objectives with respect to the goals and

2.Finalizing plans, strategies, and actions for achieving the goals.

Organizing – Once the planning is done, the manager needs to allocate and arrange resources
for the successful implementation of the plans. These resources include both human and non-human
resources. Organizing is one of the essential managerial skills. Organizing helps managers determine the
list of pending tasks, combine them into jobs, and group the jobs into units giving a form to the
organization’s structure.

Leading – One of the primary responsibilities of a manager is to ensure the completion of all tasks on time and strict
adherence to policies. And for this Leadership skills are important. Leadership skill involves:
BBA – III Sem Management Information System

• Creating and sharing a vision of possible achievements by the organization

• Communicating with employees and creating good interpersonal relations

• Motivating and inspiring team members to perform better.

Leading also ensures that the managers create a positive environment at work. This also helps improve
the performance of each employee or group of people, boosts their morale and leads to a productive and
innovative team.

Controlling – Another important management skill is ensuring that the performance of the organization conforms
to the expected goals and standards. They do this by regulating the activities in the organization. Also, in order to regulate, a
manager’s role involves:

• Monitoring ongoing activities

• Establishing standards of performance/output

• Comparing results with the standards

• Identifying areas that need improvement (can be processes, policies, or practices) and initiate corrective
action.

MIS-A tool for Management Process

– MIS supports in Decision Making: A lot of data and information is required at each step of management process by different
levels of managers for making variety of decisions. MIS facilitates decision making at all levels of company.

– MIS supports business process and record keeping: Keeps track of every business transaction , builds database and generates
information which further enables in controlling business processes.

– MIS supports in choosing Appropriate business strategies: Enables to choose right strategies for competitive position in market.

– MIS system facilitate communication within and outside organization: Through SMS and email.

– MIS supports operations by giving timely information, maintenance and enhancement

Impact of MIS MIS creates an impact on organization’s functions, performance and

productivity. With good support of MIS, the management of marketing, finance, production and
personnel become more efficient. The business processes are systemized leading to increase in
managerial efficiency. MIS uses dictionary leading to common understanding of terms and terminology
thus, bringing clarity in communication. Mis works on basic system such as transaction processing
system due to this clerical work is transferred to computerized system relieving human mind for better
work. Saves time and effort at different levels and leads to high efficiency and productivity.

MIS and computer MIS relies heavily on Hardware & software capacity of the computer and its ability
to process, retrieve and communicate with no serious limitation. Variety of hardware having distinct capabilities makes it
possible to design MIS for a specific situation. Ex-org. may need system with large database but with less processing. Ability of
computer system to provide security of data brings confidence in management to store data on magnetic media. Ex- Read only
BBA – III Sem Management Information System

facility where one cant delete to update. Software enhances hardware capability. Software handles the procedural & non-
procedural data processing. Advancement in computers and communication Technology has made complex computing an easy
task leading to concept of user friendly systems.

MIS and User – Every person in the organization is the user of the MIS. People in organization operate in an
Hierarchy. Each person has a role to play in organization and MIS caters to needs of all. A typical user is a clerk, an assistant, an
officer, an executive or a manager. A clerk may use MIS for quick search and reporting the same to higher level. An assistant
may use MIS to integrate data from different disciplines and report the same in proper format. MIS provides facilities to an
executive to analyze the data and offers decision support system to perform task of execution. The manager is a strategist and a
long term planner. MIS provides information in structured and unstructured format for him to react. MIS caters to his ever
changing needs

MIS-a support to Management MIS supports Business operations MIS supports

Transaction processing at all points MIS supports communication throughout the organization MIS supports all the functions of
Management MIS supports people at different levels of management for decision making MIS supports specific functional areas
such as HR, Finance, Marketing, Operations, IT. MIS supports long term , short term and day to day planning and decision
making.