Management Information System

Management Information Systems (MIS), referred to as Information Management and systems, is the discipline covering the application of people, technologies, and procedures collectively called information systems, to solving business problems. 'MIS' is a planned system of collecting, storing and disseminating data in the form of information needed to carry out the functions of management.

Management : Management is art of getting things done through and with the people in formally organized groups. The basic functions performed by a manager in an organization are: Planning, controlling, staffing, organizing, and directing.

Information : Information is considered as valuable component of an organization. Information is data that is processed and is presented in a form which assists decision maker. System : A system is defined as a set of elements which are joined together to achieve a common objective. The elements are interrelated and interdependent. Thus every system is said to be composed of subsystems. A system has one or multiple inputs, these inputs are processed through a transformation process to convert these input( s) to output.

Objectives of MIS : Data Capturing: MIS capture data from various internal and external sources of organization. Data capturing may be manual or through computer terminals. Processing of Data : The captured data is processed to convert into required information. Processing of data is done by such activities as calculating, sorting, classifying, and summarizing. Storage of Information: MIS stores the processed or unprocessed data for future use. If any information is not immediately required, it is saved as an organization record, for later use. Retrieval of Information: MIS retrieves information from its stores as and when required by various users. Dissemination of Information : Information, which is a finished product of MIS, is disseminated to the users in the organization. It is periodic or online through computer terminal.

SOURCE

USER

Data Capturing

Processing

Dissemination

Retrieval

Storage of Data

Characteristics of MIS :

Systems Approach Management Oriented Need Based Exception Based Future Oriented Integrated Common Data Flow Long Term Planning Sub System Concept Central database

Characteristics of Computerized MIS : Ability to process data into information with accuracy and high speed. It involves complex computation, analysis, comparisons and summarization.
Organizing and updating of huge amount of raw data of related and unrelated nature, derived from internal and external sources at different periods of time. The information processing and computer technology have been so advanced that managers are able to obtain real time information about ongoing activities and events without any waiting period.

The input data in computer can be converted into different output formats for a variety of purpose. The system is so organized that managers at different levels and in different activity units are in a position to obtain information in whatever form they want , provided that relevant programmes or instructions have been designed for the purpose.
Super-human memory, tremendous volume of data and information and the set of instructions can be stored in the computer and can be retrieved as and when needed. Management can get bit of stored information from the computer in seconds.

MIS for a Business Organization:

Support the Business Process : Treats inputs as a request from the customer and outputs as services to customer. Supports current operations and use the system to influence further way of working. Support Operation of a Business Organization: MIS supports operations of a business organization by giving timely information, maintenance and enhancement which provides flexibility in the operation of organizations. To Support Decision Making: MIS supports the decision making by employee in their daily operations. MIS also supports managers in decision making to meet the goals and objectives of the organization. Different mathematical models and IT tools are used for the purpose evolving strategies to meet competitive needs. Strategies for an Organization: Today each business is running in a competitive market. MIS supports the organization to evolve appropriate strategies for the business to assent in a competitive environment.

What do you understand by Decision Making? The word decision is derived from the Latin word decido. Which means A decision, therefore is A Settlement A fixed intuition to bringing to a conclusive result A judgment A resolution
Decision : A decision is the choice out of several options made by the decision maker to achieve some objective in a given situation. Business Decision : Business decisions are those which are made in the process of conducting business to achieve its objective in a given situation. Characteristic of Business Decision Making : a)Sequential in nature. b) Influenced by personal values. c) Exceedingly complex due to risk and trade off. d)Made in institutional setting and business environment.

Type of Decision Making System : There are two types of decision making system on the basis of knowledge about the environment. (i)Closed : If the manager operates in a known environment then it is called closed decision making system. Conditions : a)Manager knows the set of decision alternative and know their outcome in term of values. b)Manager has a model, by which decision alternatives can be generated, tested and ranked. c)The manager can choose one of them, based on some goal or objective. (ii)Open : If the manager operates in unknown environment then it is called open decision making. Conditions : a) Manager does not know all alternatives. b) Outcome is not known. c) No methods or models are used. d) Decide objective or goal; select one where his aspirates or desire are met best.

Types of Decision : Types of decision are based on the degree of knowledge about the outcome of the events which are yet to take place. Certainty: If the manager has full knowledge of event or outcome then it is a situation of certainty. Risk: If the manager has partial knowledge or probabilistic knowledge then it is decision under risk. Uncertainty: If the manager does not have any knowledge, it is decision making under uncertainty MIS converts the uncertainty to risk and risk to certainty. The decision at the low level management is certain, at middle level of the management the decision is under risk and at the top level management the decision is in under uncertain.

Transaction Processing System (TPS's) Transactions are events that occur as part of doing business, such as sales, purchases, deposits, withdrawals, refunds, and payments. TPS serve the operational level. The transaction processing systems (TPS) is a computerized system that performs and records the daily routine transactions necessary to the conduct of the business. TPS also involve employees in business processes. Transaction Processing Systems are information systems that process data resulting from the occurrence of business transaction.

Types of Transaction Processing System (TPS's) 1. On-line system: involves a direct connection between operator and the TPS program. They provide immediate result and used to process a single transaction at a time. Ex: an order arrives by telephone call; it is processed at that moment and the result are produced. 2. Batch-processing system: This is a second type of TPS, where transactions are grouped together and processed as a unit. Example: cheque processing system in a bank.

Types of Transactions: 1. Internal Transactions: Those transactions, which are internal to the company and are related with the internal working of any organization. For example Recruitment Policy, Promotion Policy, Production policy etc. 2. External Transactions: Those transactions, which are external to the organization and are related with the external sources, are regarded as External Transaction. For example sales, purchase etc.

Objectives (Goals) of TPS 1. Process data generated by and about transactions. 2. Maintain a high degree of accuracy. 3. Ensure data and information integrity and accuracy. 4. Produce timely documents and reports. 5. Increase labor efficiency. 6. Help provide increased and enhanced service. 7. Help build and maintain customer loyalty. 8. Achieve competitive advantage.

Transaction Processing Activities 1. Data collection: Capturing data necessary for the transaction. 2. Data editing: Check validity and completeness of data. 3. Data correction: Correct the wrong data. 4. Data manipulation: Calculate, summarize, Process data. 5. Data storage: Update transactions (on Databases). 6. Document production and reports: Create end result reports.

Decision Support Systems (DSS) DSS is an interactive, flexible computer based information system. It uses rules and models for processing data, to support various managerial levels, ranging from top executives to mangers, in their decision-making. A DSS is usually built to support the solution of certain problem and does not replace the decision maker. As such, it is called a DSS application. It is user friendly with strong graphical capabilities.

Components of Decision Support System The components of a DSS include a database of data used for query and analysis, software with models, data mining and other analytical tools and a user interface. The DSS database is a collection of current or historical data from a number of applications or groups. It can be small database or a massive data warehouse from a large company, which is continuously being updated. The DSS software system includes software tools for data analysis. T

Benefits of DSS 1. Improves personal efficiency. 2. Expedites problem solving (speed up the progress of problems solving in an organization). 3. Facilitates interpersonal communication. 4. Promotes learning or training. 5. Increases organizational control 6. Creates a competitive advantage over competition. 7. Helps automate the managerial processes.

Executive support systems (ESS)/ Executive Information System (EIS) Senior managers use ESS to make decisions, ESS serve the strategic level of organization. They address non-routine decisions requiring judgment, evaluation and insight because there is no agreed on procedure for arriving at a solution. Executive support systems function at the strategic level, support unstructured decision making, and use advanced graphics and communications.

Benefits of EIS Helps in competitive intelligence gathering. Help managers identify changing market conditions, formulate responses, track implementation efforts, and learn from feedback. ESS is configured to summarize and report on key performance indicators for senior management in the form of a digital dashboard or "executive dashboard." The dashboard displays on a single screen all of the critical measurements for piloting a company, similar to the cockpit of an airplane or an automobile dashboard. Many firms are now implementing a balanced scorecard model that supplements traditional financial measures with measurements from additional perspectives, such as customers, internal business processes, and learning and growth. Managers use balanced scorecard systems to see how well the firm is meeting its strategic goals.

Users: Senior managers 1. Top Level Management 2. Designed to the individual senior manager 3. Ties CEO to all levels 4. Very expensive to keep up 5. Extensive support staff

Human Resource Information Systems A human resource information system (HRIS) supports the human resources function of an organization with information. The name of this function reflects the recognition that people who work in a firm are frequently its most valuable resources. The complexity of human resource management has grown immensely over recent years, primary due to the need to conform with new laws and regulations. HRIS includes the following subsystems: 1. Human resource planning 2. Recruiting and workforce management 3. Compensation and benefits 4. Government reporting and labour relations support

Accounting and Financial Information Systems The financial function of the enterprise consists in taking stock of the flows of money and other assets into and out of an organization, ensuring that its available resources are properly used and that the organization is financially fit. The components of the accounting system include:
Accounts receivable records Accounts payable records Payroll records Inventory control records General ledgers

The essential functions that financial information systems perform include: Financial forecasting and planning Financial control Funds management Internal auditing

Marketing Information Systems Marketing activities are directed toward planning, promoting, and selling goods and services to satisfy the needs of customers and the objectives of the organization. Marketing information systems support decision making regarding the marketing mix. These include: Product Price Place Promotion