Introduction of Management information System
The Management information system (MIS) is a concept of the last two decade or two. It has been understood and described in a number of ways. It is also known as the Information System, the Information and Decision System, the computer-based Decision System. Information is the life blood of an organization, particularly in the case of system approach management. The MIS or Information system can be defined as the knowledge communicated by others or obtained from investigation or study. It is a system providing needed information to each manager at the right time in the right form and relevant one which aid understanding and stimulates the action.
MIS is an organized method of providing past, present and projection information relating to internal operations and externals intelligence. It supports the planning, control and operational functions of an organization by furnishing uniform information in proper time frame to help the process of decision-making.
Meaning and Definition Management Information System
It is combination of three words i.e. Management, Information and System. To understand the concept MIS, we try to understand these three words.
- Management: “Management is the art of getting things done through and with the efforts of other people.” However, a manager gets things done by performing basic managerial functions. These functions are: Planning, Organizing, Staffing, Directing and Controlling.
- Information: It is the second component of ‘MIS’. Information is a data which is processed and presented to decision makers and helps them in making decisions.
- System: The word ‘System’ is a set of elements that are inter-related and interdependent to achieve a common goal.
MIS: Definition
- Management, Information and System, it has been cleared that decision making is an important part of managerial functions. For taking adequate decisions, Management Information (MI) is necessary as it works as a vital input.
- A system which consists of people, machines, procedures, databases and data models as its components is known as Management Information System. This system collects data from external and internal sources of an organization, analyses it and supplies management information to managers and helps them in making decisions. MIS follows the system approach in which output is greater than the sum total of input.
- According to G.B. Davis, “MIS is a man or machine that provides information to support management in decision making process.”
Management Information System is generally defined as 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 procedure, models for analysis. Information is viewed as a resource much like land, labor and capital. It must be obtained processed, stored, manipulated and analyzed, distributed etc. An organization with a well-defined information system will generally have a competitive advantage over organization with poor MIS and no MIS. The MIS has more than one definition, some of which are given below:
- The MIS is defined as a system which provides information support for decision-making in the organization.
- The MIS is defined as an integrated system of man and machine for providing the information to support the operations, the management and the decision-making function in the organization.
- The MIS is defined as a system based on the database of the organization evolved for the purpose of providing information to the people in the organization.
- The MIS is defined as a computer-based information system.
Management Reporting Alternatives
MIS provide a variety of information products to a manager which includes 3 reporting alternatives:
- Periodic Scheduled Reports: E.g. Weekly Sales Analysis Reports, Monthly Financial Statements etc.
- Exception Reports: E.g. Periodic Report but contains information only about specific events.
- Demand Reports and Responses: E.g. Information on demand.
Nature of MIS
- Report orientation: Through MIS, every individual can perform their duty and the system automatically produces performance reports to send for evaluation to the next level of hierarchy according to the company and system specifications and / or requirements.
- Action oriented: MIS performs regulating and scheduled actions on behalf of the user as the system is customized on the basis of need and requirements at the user’s end.
- Expectation oriented: The reports and automatic transactions are expected from a CBS (Computer Based System).
- Database oriented: Almost every MIS software is based on a Database backbone to support efficient storage and retrieval of data to and from the system respectively simultaneously and concurrently from more than one workstation at a time.
- End-user oriented: Main emphasis is given on the end-user, who uses the system. The system must be understandable and easy to access for the end user for a seamless operation of the system.
Framework of MIS / Needs to have MIS
- Input of MIS
- Strategic plan or corporate policies
- Contains major financial objectives and often projects financial needs.
- Transaction processing system (TPS)
- Important financial information collected from almost every TPS - payroll, inventory control, order processing, accounts payable, accounts receivable, general ledger.
- External sources
- Annual reports and financial statements of competitors and general news items.
- Output of MIS
- Scheduled reports
- Produced periodically, or on a schedule (daily, weekly, monthly)
- Key-indicator report
- Summarizes the previous day’s critical activities
- Typically, available at the beginning of each day
- Demand report
- Gives certain information at a manager’s request
- Exception report
- Automatically produced when a situation is unusual or requires management action.
Structure of MIS
- Physical Components
- Information System Processing Functions
- Decision Support
- Levels of Management Activities
- Organizational Functions
- Based on Physical Components
- Hardware: E.g. CPU, Monitor, Keyboard, Printer etc.
- Software: E.g. System and Application S/W.
- Database: E.g. Data stored in files.
- Procedures: E.g. Manuals etc.
- Operating Personnel: E.g. Computer Operators,
- Programmers, System Analysts, System Manager etc.
- Input & Output: E.g. Printouts, Reports etc.
- Processing Functions
- To Process Transactions
- To Maintain Master Files
- To Produce Reports
- To Process Enquiries
- To Process interactive Support Applications
- Based on Processing Functions
- To Process Transactions: E.g. Making a purchase or a sale of a product.
- To Maintain Master Files: E.g. For preparing an employee's salary, required data items are Basic Pay, Allowances, Deductions etc.
- To Produce Reports: For e.g. Specific or Adhoc reports
- To Process Enquiries: For e.g. Regular or Adhoc enquiry.
- To Process interactive Support Applications: E.g. Applications designed for planning, analysis and decision making.
- Based on Output for Users
- Transaction Documents or Screens
- Preplanned Reports
- Preplanned Inquiry Responses
- Adhoc Reports & Inquiry Responses
- User-machine Dialog Results
- MIS Support for Decision Making
- Structured / Programmable Decisions: Decisions that are repetitive, routine and have a definite procedure for handling them. For e.g. Inventory reorder formula, Rules for granting Credit.
- Unstructured / Non-Programmable Decisions: Non-routine decision in which the decision maker must provide judgment, evaluation, and insights into the problem definition. For e.g.
- Semi-Structured Decisions: Decision where only part of the problem has a clear-cut answer provided by an accepted procedure.
MIS Functions
- Data is collected from various internal and external sources. Collected data may be manual or computerized.
- Then data is processed.
- Information is stored for future use.
- Stored information is retrieved by users when required.
Characteristics of MIS
- The information system follows the system’s approach to study the system and its performance in the light of purpose for which it has been developed.
- MIS is management oriented.
- MIS is designed according to the information needs of managers at different levels i.e. strategic planning level, management control level and operational control level.
- MIS is future oriented.
- Integration is essential for MIS because of its ability to produce meaningful information.
- In MIS, common data flows provide an opportunity to avoid data redundancy, joining similar functions, data storage and retrieval process, wherever possible. The constitution of common data flows is economically and logically sound concept.
- Long Term Planning is involved for developing MIS.
- MIS is a sub system concept.
- MIS is computerized.
- MIS is user friendly.
Role of Management Information System
The role of the MIS in an organization 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 elements of the body including the brain. The heart work faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processed it and sends it to the destination in the quantity needed. It fulfils the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is collected from the various sources, processed and send 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 top management. Here are some of the important roles of the MIS:
- The MIS satisfies the diverse needs through variety of systems such as query system, analysis system, modeling system and decision support system.
- The MIS helps in strategic planning, management control, operational control and transaction processing. The MIS helps in the clerical personal in the transaction processing and answers the queries on the data pertaining to the transaction, the status of a particular record and reference on a variety of documents.
- 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 operation level to correct an out-of-control situation.
- The MIS helps the middle management in short term planning, target setting and controlling the business functions. It is supported by the use of the management tools of planning and control.
- The MIS helps the top-level management in goal setting, strategic planning and evolving the business plans and their implementation.
- The 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 operation of an organization.
Impact of the management information system
MIS plays a very important role in the organization; it creates an impact on the organization’s functions, performance and productivity. The impact of MIS on the functions is in its management with a good MIS supports the management of marketing, finance, production and personnel becomes more efficient. The tracking and monitoring of the functional targets becomes easy. The functional managers are informed about the progress, achievements and shortfalls in the activity and the targets. The manager is kept alert by providing certain information indicating and probable trends in the various aspects of business. This helps in forecasting and long-term perspective planning. The manager’s attention is bought to a situation which is expected in nature, inducing him to take an action or a decision in the matter. Disciplined information reporting system creates structure database and a knowledge base for all the people in the organization. The information is available in such a form that it can be used straight away by blending and analysis, saving the manager’s valuable time.
The MIS creates another impact in the organization which relates to the understanding of the business itself. The MIS begins with the definition of data, entity and its attributes. It uses a dictionary of data, entity and attributes, respectively, designed for information generation in the organization. Since all the information systems use the dictionary, there is common understanding of terms and terminology in the organization bringing clarity in the communication and a similar understanding of an event in the organization.
The MIS calls for a systematization of the business operations for an effective system design. This leads to streaming of the operations which complicates the system design. It improves the administration of the business by bringing a discipline in its operations as everybody is required to follow and use systems and procedures. This process brings a high degree of professionalism in the business operations. The goals and objectives of the MIS are the products of business goals and objectives. It helps indirectly to pull the entire organization in one direction towards the corporate goals and objectives by providing the relevant information to the organization.
A well-designed system with a focus on the manager makes an impact on the managerial efficiency. The fund of information motivates an enlightened manager to use a variety of tools of the management. It helps him to resort to such exercises as experimentation and modeling. The use of computers enables him to use the tools and techniques which are impossible to use manually. The ready-made packages make this task simple. The impact is on the managerial ability to perform. It improves decision-making ability considerably high. Since, the MIS work on the basic system such as transaction processing and database, the drudgery of the clerical work is transferred to the computerized system, relieving the human mind for better work. It will be observed that lot of manpower is engaged in this activity in the organization. Seventy (70) percent of the time is spent in recording, searching, processing and communicating. This MIS has a direct impact on this overhead. It creates information –based working culture in the organization.
Importance of MIS
It goes without saying that all managerial functions are performed through decision-making; for taking rational decision, timely and reliable information is essential and is procured through a logical and well-structured method of information collecting, processing and disseminating to decision makers. Such a method in the field of management is widely known as MIS. In today’s world of ever-increasing complexities of business as well as business organization, in order to service and grow, must have a properly planned, analyzed, designed and maintained MIS so that it provides timely, reliable and useful information to enable the management to take speedy and rational decisions.
MIS has assumed all the more important role in today’s environment because a manager has to take decisions under two main challenges:
- First, because of the liberalization and globalization, in which organizations are required to compete not locally but globally, a manager has to take quick decisions, otherwise his business will be taken away by his competitors. This has further enhanced the necessity for such a system.
- Second, in this information age wherein information is doubling up every two or three years, a manager has to process a large voluminous data; failing which he may end up taking a strong decision that may prove to be very costly to the company.
In such a situation managers must be equipped with some tools or a system, which can assist them in their challenging role of decision-making. It is because of the above cited reasons, that today MIS is considered to be of permanent importance, sometimes regarded as the name centre of an organization. Such system assists decision makers in organizations by providing information at various stages of decision making and thus greatly help the organizations to achieve their predetermined goals and objectives. On the other hand, the MIS which is not adequately planned for analyzed, designed, implemented or is poorly maintained may provide developed inaccurate, irrelevant or obsolete information which may prove fatal for the organization. In other words, organizations today just cannot survive and grow without properly planned, designed, implemented and maintained MIS. It has been well understood that MIS enables even small organizations to more than offset the economies of scale enjoyed by their bigger competitors and thus helps in providing a competitive edge over other organizations.
Types of Management Information Systems
A management information system (MIS) is a computer-based system that provides the information necessary to manage an organization effectively. An MIS should be designed to enhance communication among employees, provide an objective system for recording information and support the organization's strategic goals and direction. There are four types of MIS that will be introduced in ascending order of sophistication.
- Transaction Processing Systems - These systems are designed to handle a large volume of routine, recurring transactions. They were first introduced in the 1960s with the advent of mainframe computers. Transaction processing systems are used widely today. Banks use them to record deposits and payments into accounts. Supermarkets use them to record sales and track inventory. Most managers use these systems to deal with tasks such as payroll, customer billing and payments to suppliers.
- Operations Information Systems - These systems were introduced after transaction processing systems. An operations information system gathers comprehensive data, organizes it and summarizes it in a form that is useful for managers. Most of these systems access data from a transaction processing system and organize it into a form usable by managers. Managers use operations information systems to obtain sales, inventory, accounting and other performance-related information.
- Decision Support Systems (DSS) - A DSS is an interactive computer system that can be used by managers without help from computer specialists. A DSS provides managers with the necessary information to make intelligent decisions. A DSS has three fundamental components:
- Database management system (DBMS): Stores large amounts of data relevant to problems the DSS has been designed to tackle.
- Model-based management system (MBMS): Transforms data from the DBMS into information that is useful in decision making.
- Dialog generation and management system (DGMS): Provides a user-friendly interface between the system and the managers who do not have extensive computer training.
- Expert Systems and Artificial Intelligence - These systems use human knowledge captured in a computer to solve problems that ordinarily need human expertise. Mimicking human expertise and intelligence requires that the computer (1) recognize, formulate and solve a problem; (2) explain solutions and (3) learn from experience. These systems explain the logic of their advice to the user; hence, in addition to solving problems they can also serve as a teacher. They use flexible thinking processes and can accommodate new knowledge.
- Considerations - A potential problem with relying on electronic communication and processing of information is the loss of the vital human element. Sometimes because of the complexity of information, an MIS report cannot effectively summarize it. Very rich information is needed to coordinate and run an enterprise and certain classes of information cannot be quantified. For example, it might be wrong to evaluate an employee's performance solely based on numbers generated by an MIS. Numbers can indicate a performance problem but a face-to-face meeting will be necessary to discuss the nature of the problem.
FAQ’s
What kinds of people pursue MIS degrees?
The profiles of MIS professionals are varied, but in general, such individuals possess many of the following traits: Good problem solving skills; ability to effectively manage time and resources; a clear vision of “the big picture” as well as the “small details”; a desire to work closely with other people; excellent communication skills; ability to think strategically about technology and a desire to take responsibility for developing and implementing their own ideas
What are typical career options for MIS professionals?
IT Consultant; Web Developer; Information Systems Manager; Business Intelligence Analyst; Network Administrator; Business Application Developer; Systems Analyst; Technical Support Specialist; Business Analyst and Systems Developer.
Why should I choose to major in MIS?
Job satisfaction; High placement rate; High salaries; Exciting field; Challenging field; Hands-on problem solving; Innovation and creativity; Global opportunities; Great chance for advancement and You can have an impact!
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