UNIT-I INTRODUCTION

1. To understand the concept of MIS, one should just understand Management, Information & System separately as these are the basic ingredients of any Management Information System.

2. These three ingredients are closely associated with the organisational structure of an organisation, hence one also needs to be familiar with the structure of the organisation and its global functions.

3. Simply speaking, an organisation is a collection of people working together in order to achieve common objective. To achieve the objective, organisation performs different types of activities. People performing activities related to similar functions are closely associated, forming a department. Thus organisational structure is the arrangement of departments in hierarchical structure.

Fig. Organisational Structure

CEO

Productio n

Marketing

Finance

Personnel

4. Each person at a position has authority and high command associated with it. Thus authority is provided to exercise control over resources, rewards & tasks that are being performed in the department. It is also used to make decisions. Authority is distributed according to the level in the hierarchy. (in relation to an organisation) Note : * An objective can be defined as statement of measurable results to be achieved. * Mission is a broad statement of the purpose of an organisations activities (a) What should be the inventory level. (b) What should be the production schedule

Operational Control can be defined as the process to control the basic

product or service being produced by the company.

Fig. Functions of Management

Policies

Plans

Budgets Objectiv es

REVENUE

COSTS

PROFIT

Schedules

Measurement

GOODS

SERVICES

PERFORMANCE

5. Thus it is clear that managers basically plan, organise, initiate & control. They plan by setting the targets and select the possible way to achieve the targets. They organise the task into small achievable sub-tasks, and assign these sub tasks. They control the performance of the work by setting performance standards and avoiding deviations from the standards.

MIS is an acronym of 3 words viz a viz Management, Information, and System. i.e

MIS

Managem ent

Informati on

System

Definition of Management : The word Management itself is a very big

concept. Different authors/writers define management in their own words. Some of them are as follows :1. Koontz defines it as The process of designing and maintaining in which individuals working together in groups accomplish efficiently selected aims. 2. According to Frederick W. Taylor, It is the art of knowing what you want to do and then seeing that it is done, in the best and the cheapest way, by securing maximum use of men and machines. 3. According to Terry: Management is a distinct process consisting

of planning, organising, actuating and controlling, utilising in both

science and art and followed in order to accomplish predetermined objectives.

4. According to Lawrence Appley : Management is the efforts of people involved to accomplish the desired work. Last, but not the least, 5. Peter Drucker defines management as, Management is a multipurpose organ that manages a business and manages managers and manages workers and work.

INFORMATION
Information is a data which contains some meaningful content. In other words, we can say that information is the output of processed data. As we know that data and information are interchangeable. Information as a system depends on three main components (1) Data (2) Information for data mining (3) The network on which this knowledge will be available on demand.

* Data refers to facts and figures * Information refers to data that has classified into categories, and * Knowledge will mean information that has been further refined into more general statements.

Further, information can be classified as follows :(a) Internal information (b) External information

(a) INTERNAL INFORMATION :Generated as by product of the normal business operations of the organisation. For Eg , information related to sales made during the last month. This information is generally historical or static in nature. It is basically after the factual data. Eg, financial plans, manpower details, inventory details, information of accounts.

(b)

EXTERNAL INFORMATION :-

is data with some outside the organisation, eg, which other productions available in the market. This information can be processed and supplied to predict market share of each product is then for decision making. Some other examples are : government policies, and procedures, trends of the markets, economic trends.

SYSTEM
System :
A system is composed of interacting parts that operate together to achieve some objective or purpose OR A system can be described simply as a set of elements joined together for a common objective. OR A system is a collection of elements which are interdependent ; perform together or work together to achieve a specific task.

Eg, A human body has so many parts associated with it. (eg, eyes, ears, legs, arms etc). When all these parts of the body are combined, then it makes a perfect human body. The same concept we can use in the information. In information, we can combine data & format & style to indicate a proper system. For our purpose organisation is system and the parts (division departments, functions units etc) are the subsystem.

Input

SYSTEM

Output

Hence, the question arises, what do you mean by MIS as a whole ????

Now, what is MIS ???

Definition of MIS :The MIS has more than one definition, some of which are given below :1. The MIS is defined as a system which provides information for decision making in the organisation.

2. The MIS is defined as an integrated system of man and machine for providing the information to support the operations of the management & the decision making function in the organisation.

3. The MIS is defined as a system based on database of the organisation evolved for the purpose of providing information to the people in the organisation.

4. According to Schwartz, MIS is a system of people, equipment, procedures, documents and communication that collects, validates, operates on transformers, stores, retrieves, and present data for use in planning, budgeting, accounting, controlling, and other management process

5. Coleman and Riley state that an MIS :(a) Applies to all management levels, (b) Is linked to an organisational sub-system (c) Functions to measure performance, monitor progress, evaluate alternatives, or provide knowledge for change or collective action, and (d) is flexible both internally and externally

6. Frederick B. Cornish defines MIS as Structure to provide the information needed, when needed and where needed. Further, the system represents the internal communication network of the business providing the necessary intelligence to plan, execute and control.

7. According to Jerome Kanter, MIS is a system that aids management in making, carrying out, and controlling decisions.

OBJECTIVES OF MIS
MIS has the following objectives :(1) To facilitate the decision making process in an organisation by providing all the levels of management with accurate, timely information to help the managers in selecting best course of action. (2) To provide each manager at every level, the planning and control tools and help in highlighting the critical factors, to be closely monitored for successful operation of the enterprise.

(3) To help the management in getting the required information for controlling the activities of the organisation. (4) It plays a role of information generation, communication problem identification and helps in the process of decision making.

Hence, MIS plays a vital role in the management, administration and operation of an organisation.

Management and MIS

ENVIRONMENT MANAGEMENT

GOAL SETTING

O P L A N N I N G R G A N I S I N G S T A F F I N G

D I R E C T I N G

C O N T R O L L I N G

C O O R D I N A T I N G

CHARACTERISTICS OF MIS MIS

INFORMATION SUPPORT

1. Flexibility : All organisations are dynamic and changes occur for a wide range of reasons. A good MIS must be able to adopt to meet these changes.

2. Reliability : Reliability is crucial to performance and can be ensured only by thorough checking and testing. Good standards help to make the MIS reliable as to do validation and security routines.

3. Simplicity : Anyone can design a complicated system but it takes skill and experience to design simple systems which are easy to operate and control.

4. Economy : Which is related to the cost". So MIS should be costeffective. As there are many hidden costs in the design, development and operation of system, the most important of which is the time of the people involved.

5. Helpfulness : Unless MIS helps in the planning, operation and control of the business, it is superfluous, i.e unnecessary

6. Comprehensive : MIS is comprehensive in nature. It includes Transaction Processing System(TPS) as well as Information Processing System(IPS) designed primarily for decision making, and control at all levels of the organisation.

7. Integrated : MIS is an integrated system. It integrates various subsystems in such a way that meaningful information is provided where, and when it is needed. This integration makes information processing more efficient by reducing both intermediate processing and the incidence of independent generation of data by multiple departments. At the same time, it provides more timely, complete and relevant information.

8. Coordinated : Being integrated, MIS is a coordinated system. It is centrally coordinated to ensure that gathering, processing, office, automation, intelligence and decision support system and other components of MIS are developed and operated in planned and coordinated way.

Efficiency in MIS is required because Its not an end itself but a means to Achieve organisational objectives.

9. Management Oriented : It means that the development of information system efforts should start from an appraisal of management needs and overall business objectives.

10.

Management-

Directed : Management should be responsible for setting system

specification and it must play a key role in the subsequent trade off decisions that occur in the system development.

11. Accurate : Information should be accurate as far as possible, and if not, then the levels of inaccuracy should be within the limits.

12.

Brevity : Information should not only be clear but should be brief. Brevity does not mean that certain matters are to be left out but it means that the maximum information should be communicated in minimum words. Eg, graphs, charts, tables, figures etc are such media that help in making the information brief.

IMPORTANCE OF MIS :1. An organisation can be viewed as a system in which various types of information gets generated. For an organisation to survive and grow in todays competitive world, it is also essential that there is a method, by which information should get shared among all the departments.

2. In a small organisation, the people can sit together and discuss a trick to share information but for large organisations, such activities are not feasible. Thus for each organisation, there has to be another method for sharing the information. Eg, a separate department could be created which collects data from each department, analyse the data, make a comprehensive report and distribute it to all departments.

3. This department generates reports for sharing information but these are not single reports, they have to be designed from a different angle, i.e from managements point of view, i.e they should help management in performing their function effectively.

4. Due to the ever increasing competition of business and management, MIS has become important in todays world for any organisation to survive and grow , to fulfil their information requirements. An organisation must be properly planned, analysed, designed and maintained MIS to provide timely, reliable and useful information to enable the management to take speedy and rational decisions.

Due to all the above reasons, MIS today is of paramount importance and sometimes regarded as the nerve centre of an organisation.

PURPOSE OF MIS

1. The main purpose of MIS is to help in the smooth running of the business by providing information on the organisations data. Employees from different levels, then evaluate this information so that decisions can be made to ensure that the business remains competitive and successful.

2. Thus MIS serves the purpose to raise management skill from level of spotting information, intuitive (i.e. able to understand or know something without conscious reasoning.) guesswork and isolated guesswork and isolated problem solving to the level of system insight, system information, sophisticated data processing and system problem solving. Thus proving to be a powerful method for aiding managers in solving problems and making decisions.

3. Thus MIS mainly helps organisation gain value from information and information technology. MIS produces this value by :(i) (ii) (iii) Better managing information resources. Using this information for decision making. Improving business processes.

OR in other words, MIS provides a function which is the combination of database, tables inside the database. It provides the required information to management to take the decision.

Hence, the main purpose of MIS in an organisation is to process, generate the information to improve the performance and working of the organisation.

ROLE OF MIS IN AN ORGANISATION :1. The role of MIS in an organisation 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 parts or elements of the body including the brain. The heart works faster and processes it, sends it to the destination in the quantity needed. MIS plays exactly the same role in the organisation.

2. The system ensures that an appropriate data is collected from various sources, processed and sent further to all the needy destinations. The system is expected to fulfil the information needs of an individual, a group of individuals, the management functionaries, the managers and the top management.

3. MIS satisfies diverse needs of an organisation through a variety of systems, like query systems, analysis systems, modelling systems, and decision support systems. It also helps in strategic planning, management control, operational control, and transaction processing.

4. The MIS helps the junior management personnel by providing the operational data for planning, scheduling and control and helps them further, in decision making at the operations level to correct an out of control situation.

5. It helps the middle management in short term planning, target setting, and controlling the business operations. It is supported by the use of management tools of planning and control

Thus, MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS therefore plays a vital role in the management, administration and operations of an organisation.

MIS : GROWTH AND DEVELOPMENT

1. The breath taking rate of the technological change, it is prudent to realise the importance of growth of MIS in stages in order to encounter increasing complexity of business, processes and changing scenario of management.

2. MIS development evolves from EDP systems. The EDP systems have rudimentary1 technology to handle clerical, supervisory operations, in an organisation. This is the initiation step.

3. Advantage of computerisation are gradually realised by most of the people in an organisation, this realisation leads to proliferation2 of computers, networking technologies and computer based system application within an organisation, this is a contagious stage

4. Next stage typified by planning and control, as demand for computerisation increases, a need is realised for cost benefit analysis. This is imperative3 to plan for future MIS in a cost effective manner.

5. Next stage of MIS is integration of subsystems. This comes with realisation of interdependence of inflow of data from various sources for valid information. Management plans to leverage existing subsystems to a unified system in order to obliterate4 data redundancy and facilitate communication of information among various departments.

6. After creation of an integrated system, management focuses, its attention to database administration in order to regulate data for company- wide communication. This stage is also referred to as the architecture stage.

basic, elementary, simple, underdeveloped. 2 propagation, 3 explosion, production, erection, increase. very important, 4 vital wipeout, destroy, demolish 7. After data administration stage an organisation reaches, the MIS maturity. Here MIS department is geared up (ready) to plan future MIS needs for the organisation. These future development plans initiate for feedback of the users of the existing MIS. Here users are in complete control of MIS and become aware of their system needs.

FIGURE : STAGES OF GROWTH OF MIS

LIO (executive leadership) MIS manager (Managerial leadership) DP manager (technology

& leadership)

ii

iii Contagious

iv Control

vi Integration

Architecture

Stages & initiation Demassing

1960

>>1960

LOCATION OF MIS IN THE ORGANISATION CONCEPT AND DESIGN

During development of MIS when the conceptual development of MIS were taking place, concept of end user, computing using multiple databases emerged. This concept brought about decentralisation of MIS,thus making the user information independent of computer professionals. Thus changing the concept of MIS to decision making system. The concept of MIS today is a system that handles the databases, provides computing facilities to the end user and gives a variety of decision making tools to the user of the system. Concept of MIS gives high regard to the individual and his ability to use the information. MIS gives information through data analysis for which it relies on many academic disciplines like theories, principles, and concepts from the management science, management accounting, operations research, engineering, computer science, psychology, human behaviour etc, making MIS more effective and useful, Foundation of MIS is the principles of management and its practices. MIS uses the concept of management control, units design and relies heavily on the fact that the decision maker, a manager, is a human being or a human processor of information.

MIS can be evolved for a specific objective if it is evolved after systematic planning and design. The information generated should be useful in managing the business. This is possible only where it is conceptualised as system with an appropriate design. MIS thus relies heavily on the system theory which offers solutions to handle computer situations of input and output flows, using theories of communication to help a system design capable of handling data input, process and input.

FIGURE : CONCEPTUAL VIEW OF MIS

INFORMATION SYSTEM BUSINESS GOALS AND MISSION APPLICATION OF PURE AND SOCIAL SCIENCE. APPLICATION OF PRINCIPLES AND PRACTICES OF MANAGEMENT USE OF DATABASES AND KNOWLEDGE BASE COMPUTERS AND INFORMATION TECHNOLOGY

LOCATION OF MIS IN A BUSINESS ORGANISATION

Different business organisations follow different procedures in locating an information centre in the organisation. Therefore, there are three forms of organisations of MIS / Data Processing (DP) setup which are generally known.

These are :-

(a) As a part of a financial department : In this case, DP personnel headed by a DP manager are placed under the charge of the financial controller or a chief account officer, because historically financial applications were the first to be computerised and systemised. (b) DP organisation under a separate direction (MIS) : Sometimes, other names such as director (Management Services or director(data processing)) are also used. In this form of organisation, the DP manager or the Director of MIS enjoys a status equal to the Financial Controller or the Chief Accounts Officer. (c) DP organisation as a separate company : This kind of organisation, followed largely by the consultant units or subsidiaries of conglomerate of companies is useful for the speedy and rapid growth of system design and other related data processing activities, both with respect to internal application as well as external consultancy.

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