MIS Notes

Concept of Management Information System (MIS)

A management information system (MIS) is an information system used for decision-making, and for the coordination, control, analysis, and visualization of information in an organization.

The study of the management information systems testing people, processes and technology in an organizational context.

MIS is the use of information technology, people, and business processes to record, store and process data to produce information that decision makers can use to make day to day decisions. The full form of MIS is Management Information Systems. The purpose of MIS is to extract data from varied sources and derive insights that drive business growth.

The need for Management Information Systems (MIS)

The following are some of the justifications for having an MIS system

Decision makers need information to make effective decisions. Management Information Systems (MIS) make this possible.

MIS systems facilitate communication within and outside the organization employees within the organization are able to easily access the required information for the day to day operations. Facilitates such as short message service (SMS) & email make it possible to communicate with customers and suppliers from within the MIS system that an organization is using.

Record keeping: Management information systems record all business transactions of an organization and provide a reference point for the transactions.

Components of MIS

The major components of a typical MIS long-form (Management Information System) are:

People: People who use the information system

Data: The data that the information system records

Business Procedures: Procedures put in place on how to record, store and analyze data

Hardware: These include servers, workstations, networking equipment, printers, etc.

Software: These are programs used to handle the data. These include programs such as spreadsheet programs, database software, etc.

Types of Information Systems

The type of information system that a user uses depends on their level in an organization. The following diagram shows the three major levels of users in an organization and the type of information system that they use.

Transaction Processing Systems (TPS)

This type of information system is used to record the day to day transactions of a business. An example of a Transaction Processing System is a Point of Sale (POS) system. A POS system is used to record the daily sales.

Management Information Systems (MIS)

Management Information Systems abbreviated as MIS, are used to guide tactic managers to make semi-structured decisions. The output from the transaction processing system is used as input to the MIS system.

Decision Support Systems (DSS)

Decision support systems are used by top level managers to make semi-structured decisions. The output from the Management Information System is used as input to the decision support system. DSS systems also get data input from external sources such as current market forces, competition, etc.

Role of MIS 

Simply MIS stand For Management Information System. For simply understanding management information system (MIS) we can divide into three Word and understand part by part of MIS.

Management: “Management is function to do the work at the Right time, by the right Person, For the Right Job.” 

Information: “Information is the collection of organized data which plays a vital role for decision making.” 

System: “System consist for a set of elements which provides a framework to convert Unorganized (Data) into Organized Information.” 

Role of Management Information System 

Management information system (MIS) has become Very Necessary due to Emergence of high complexity in Business Organization. It is all to know that without information no Organization can take even one step properly regarding the decision making process. Because it is matter of fact that in an organization decision plays an essential role for the achievement of its objectives and we know that every decision is based upon information. If gathered information are irrelevant than decision will also incorrect and Organization may face big loss & lots of Difficulties in Surviving as well. 

1. Helps in Decision making 

Management Information System (MIS) plays a significant role in decision making process of any organization. Because in any organization decision is made on the basis of relevant Information and relevant information can only be retrieving from the MIS. 

2. Helps in Coordination among the Department 

Management information system is also help in establishing a sound relationship among the every persons of department to department through proper exchanging of Information’s. 

3. Helps in Finding out Problems 

As we know that MIS provides relevant information about the every aspect of activities. Hence, if any mistake is made by the management then Management Information Systems (MIS) Information helps in finding out the solution of that problem. 

4. Helps in Comparison of Business 

Performance 

MIS store all past data and information in its database. That why management information system is very useful to compare business organization performance. With the help of management information system (MIS) organization can analyze his performance means whatever they do last year or previous years and whatever business performance in this year and also measures organization development and growth. 

Components of MIS and their relationship 

A management information system is made up of five major components namely people, business processes, data, hardware, and software. All of these components must work together to achieve business objects. 

1.People

These are the users who use the information system to record the day to day business transactions. The users are usually qualified professionals such as accountants, human resource managers, etc. The department usually has the support staff who ensure that the system is running properly. 

2. Business Procedures 

These are agreed upon best practices that guide the users and all other components on how to work efficiently. Business procedures are developed by the people i.e. users, consultants, etc. 

3. Data 

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

4.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. 

5. 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. 

Objective of MIS

An MIS is a system designed to provide selected decision oriented information needed by management to plan, control and evaluate the activities of the corporation. It is designed within a framework that emphasizes profit planning, performance planning and control at all levels. 

A formal method of collecting timely information in a presentable form in order to facilitate effective decision making and implementation, in order to carryout organizational operations for the purpose of achieving the organizational goal. 

Information processing beyond doubt is the dominant industry of the present century. Following factors states few common factors that reflect on the needs and objectives of the information processing: 

• Increasing impact of information processing for organizational decision making. 
• Dependency of services sector including banking, financial organization, health care, entertainment, tourism and travel, education and numerous others on information. 
• Changing employment scene world over, shifting base from manual agricultural to machine-based manufacturing and other industry related jobs. 
• Information revolution and the overall development scenario. 
• Growth of IT industry and its strategic importance. 
• Strong growth of information services fuelled by increasing competition and reduced product life cycle. 
• Need for sustainable development and quality life. 
• Improvement in communication and transportation brought in by use of information processing. 
• Use of information processing in reduction of energy consumption, reduction in pollution and a better ecological balance in future.
• Use of information processing in land record managements, legal delivery system, educational institutions, natural resource planning, customer relation management and so on. 
• MIS is very useful for efficient and effective planning and control functions of the management. Management is the art of getting things done through others. MIS will be instrumental in getting the things done by providing quick and timely information to the management. 
• Reports give an idea about the performance of men, materials, machinery, money and management. Reports throw light on the utilization of resources employed in the organization. 
• MIS is helpful in controlling costs by giving information about idle time, labour turnover, wastages and losses and surplus Capacity.
• By making comparison of actual performance with the standard and budgeted performance, variances are brought to the notice of the management by MIS which can be corrected by taking remedial steps. 
• MIS brings to the notice of the management strength (i.e., strong points) of the organisation, to take advantage of the opportunities available. 
• MIS reports on production statistics regarding rejection, defective and spoilage and their effect on costs and quality of the products. 

Emergence of Management 

A management information system, or MIS, is any computer system used to collect and store information, with tools for analyzing that information so that you can monitor operations and make informed business decisions. Software that tracks sales data, produces weekly reports and expands on past sales to provide you with sales forecasts would be one example of a management information system. More sophisticated systems could track production in different departments, monitor inventory, keep track of costs and even monitor the company’s stocks. 

In the past, MIS was often a system that ran independently of other company systems. At one time, it would be found almost exclusively on mainframe computers and the information it processed was used exclusively by management. Today, MIS is often used interchangeably with information systems (IS) as well as information technology (IT). 

Management Information System and Computer

Translating the real concept of the MIS into reality is technically, an infeasible proposition unless computers are used. The MIS relies its ability to store, process, retrieve and communicate with no serious limitations. 

The variety of the hardware having di tinct capabilities make it possible to design the MIS fora specific situation. For example, if the orgnization needs a large data base and very little processing, a computer system is available for suh a requirement. Suppose the organization has multiple business locations at long distances and if the need is to bring the data at one place, process, and then send the information to various locations, it is possible to have a computer system with a disturbed data processing capablity. If the distance is too long then the computer system can be hooked through a satellite communication system.

Role of computer in Management Information System 

Computers play a central role in a business's management information system, or MIS. In past decades, most companies had a few computers that served as information hubs. Today, a range of computing devices funnel important d ta fr ma variety of sources, from s les to time cards to inventory. The MIS software gathers the data and generates actionable information to guide the business.

1. Guiding the business

Business doesn’t stand still. Internal and external circumstances change daily, and you need a road map of good information to guide you through the twists and turns. The whole purpose of MIS is to use the hard data of your business to inform day-today and long-term decisions. Computers ease the task of processing the data.

2. Capturing the data

The most sophisticated computer in the world can't help your business if they are not fed. Before MIS can provide you useful information, data must first enter the system. 

Sales and accounting systems, for example, typically capture data when a customer places an order. Workers on the factory floor can enter manufacturing data into tablets or PCs, or the production machines themselves can capture data automatically. These details, nuts-and-bolts numbers are the raw materials that eventually become useful management information. 

3. Calculating, Sorting and Searching

Modern computers excel at repetitive number crunching, accurately processing many thousands of data items per second. To summarize a months business transactions by hand might take hours or days, while a computer can do this task in moments. Useful operations include arithmetic calculations, sorting data numerically or alphabetically and searching for a single record among thousands in a file.

4. Database management system

Many MIS systems rely on database management systems to organize, process and protect data. The database is a special program that acts as a data warehouse, storing the raw data and also cataloging it. The database has levels of security to guard against unauthorized access. It gives the various MIS applications accounting, payroll, inventory management and others added efficiency, reliability and flexibility.

5. Reports for managers

An MIS delivers information to managers in the form of reports. They may take many forms, including printed lists, informative screens or alerts by text or email. GeneraIly, reports may have details, listing individual records sorted by date or other criteria, and summary figures that show totals and averages. 

For example a monthly sales report, shows customers name and what they bought. The MIS may generate the reports on demand on a schedule or when present conditions are met.

6. Ad hoc reporting 

Many of the reports in an MIS are "canned" as software developers wrote the specifications when the system was firt created. Ad hoc (improvised) reports are alo possible. In this instence, you can use database software to create a custum report. 

For example, in a certain month, an item you make may have been painted the wrong colour. An ad hoc report can pull useful information from the MIS, such as who bought the item and when or which production machine made the item. The manager may create the report herself from a menu-driven reporting system, or she may ask a data technician to do it for her. 

7. Computer storage and Big data

With the falling price of computer hard drives, it’s now possible to store enormous am unts of information cheaply. Even small busine es can afford to keep reams of detailed records on hand and use them to study customer buying patterns, production quality statistics and the actions of competitors. 

8. Garbage in, Garbage out

With tongue in cheek, computer professionals use the term “garbage in, garbae out” to sum up how errors in data or mistakes in programming can lead to disastrous outcomes. Because computers deal with large amounts of information, it’s possible that small arithmetic errors, for example, may've wildly incorrect results. Savvy business people must be aware of the potential pitfalls of relying too much on computerized reports.

Impact of MIS

The impact of MIS on the functions is in its management. With a good MIS support, the management of marketing, finance, production and personnel becomes more efficient, the tracking and monitoring 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 the probable trends in the various aspects of business. This helps in forecasting and long-term perspective planning. The manager” attention is brought to a situation which is exceptional in nature, inducing him to take an action or a decision in the matter. A disciplined information reporting system creates a structured 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 or 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 a 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. 

Advantage and Disadvantage of Computer based MIS

Computer - based Management information systems have been in widespread use since the 1990s in industry, non-profit organizations and government agencies. These systems provide fast, centralized access to databases of personnel information, reference reading, best practices and on-the-job training, and are easily customizable to meet an organization’s needs. With the Internet and technology boom of the early 21st century, use of computer-based information networks is growing faster each year.

Advantage of computer based Management Information System 

1. Data centrality

Access to data via a computer network information system is central, providing a “one-stop” location to find and access pertinent computer data. Most large-scale businesses and organizations use some sort of central database to manage user information, manage advertisement lists, store product information and keep track of orders. Examples of central database solutions are MySQL, PostgreSQL or Microsoft SQL database solutions, coupled with custom software which provides user interfaces. 

2. Information coverage

Central information systems provide organizations with the advantages of having large amounts of data, covering many different fields, all accessible via a central source. Information coverage is a huge advantage for any organization, because having vast amounts of useful data from every different d partment streamlines access and increases productivity. For users, having access to a networked information system is analogous to having a digital library of shared knowledge. Recent developments in database information systems link company information access with larger databases of academic and professional research, such as Google Scholar, to provide even more information capability to personnel. 

3. Access efficiency

Efficiency of access is a crucial advantage to networked information systems over more traditional information management systems, such as paper cataloging and filing. Computerbased information systems catalog and file documents in a set logical way, making data access very efficient and fast. Data can be manually categorized, and filters created to automatically file documents that match certain patterns. This increases employee productivity time by allowing workers to focus more on the task at hand rather than filing paperwork.

4. Extensibility

Computer-based information systems are completely extensible and customizable to an organization’s needs. Upon installation customized computer information systems use configuration files that are tailor-made to an organization’s needs to file and categorize data. Computer software engineers frequently design custom database interfaces and information storage/recovery systems for enterprise clients. As a company grows, modifications and additions to this filing configuration allow easy extensibility. 

Computer information systems are not limited in scale and possibility. They are uniquely designed for maximum organisational benefit for each customer.

Disadvantage of computer based Management Information System 

1. Lack of common sense

Computer is only an electronic device. It cannot think. If we provide an incorrect data, it does not have the commonsense to question § the correctness of the data. For overcoming this problem, several Software Specialists are engaged in the project of developing intelligence to the computer. To it, they have given name as Artificial Intelligence. They are willing to develop the feeling and inhumation in this device. 

We hope that in near future the artificial intelligence will help this device to function in more interactive way. Today, software’s are available which may convert our speech into text. This is the beginning of an era where computer may be quite interactive with human beings. In addition, to execute the function, operator will give verbal instructions.

2. Memory without brain

Computer can store data in its memory. However, if a wrong instruction is provided, it does not have a brain to correct the wrong instructions.

3. Slavery

A computer is a slave; it cannot execute the program by itself. It requires instructions to execute the program and generate information. Thus, we see that the computer cannot do anything by itself. It has a relationship of master and slave. Until master Is not instructing, slave will not perform any function. In the same way computer does. 

Classification of Information 

Information classification is a process in which organizations assess the data that they hold and the level of protection it should be given.

Organizations usually classify information in terms of confidentiality i.e. who is granted access to see it. A typical system will include four levels of confidentiality:

Confidential (only senior management have access)

Restricted (most employees have access)

Internal (all employees have access)

Public (everyone has access)

As you might expect, larger and more complex organizations will need more levels.

Take hospitals, for example: doctors and nurses need access to patients’ medical histories, which are highly sensitive, but they shouldn't have access to other type of information that would fit that criteria, such as hospital's financial records.

Classification by Characteristic 

Based on Anthony's classification of Management, information used in business for decision-making is generally categorized into three types: 

1. Strategic Information 

Strategic information is concerned with long term policy decisions that defines the objectives of a business and checks how well these objectives are met. For example, acquiring a new plant, a new product, diversification of business etc, comes under strategic information. 

2. Tactical Information 

Tactical information is concerned with the information needed for exercising control over business resources, like budgeting, quality control, service level, inventory level, productivity level etc. 

3. Operrational Information

Operational information is concerned’ with plant/business level information and is used to ensure proper conduction of specific operational tasks as planned/intended. Various operator specific, machine specific and shift specific jobs for quality control checks comes under this category. 

Classification of Application 

In terms of applications, information can be categorized as: 

1. Planning Information 

These are the information needed for establishing Standard norms and_ ‘specifications in an organization. This information is used in strategic, tactical, and operation planning of any activity. Examples of such information are time standards, design standards. 

2. Control Information 

This information is needed for establishing control over all business activities through feedback mechanism. This information is used _ for controlling attainment, nature and utilization of important processes in a system. When such information reflects a deviation from the established standards, the system should induce a decision or an action leading to control. 

3. Knowledge Information 

Knowledge is defined as “information about information”. Knowledge information is acquired through experience and learning, and collected from archival data and research studies. 

4, Organizational Information Organizational information deals with an organization’s environment, culture in the light of its objectives. Karl Weick’s Organizational Information Theory emphasizes’ that an Organization reduces’ its equivocality or uncertainty by collecting, managing and using these information prudently. This information is used by everybody in the organization; examples of such information are employee and payroll information. 

5. Functional/Operational Information This is operation specific information. For example, daily schedules in a manufacturing plant that refers to the detailed assignment of jobs to machines or machines to operators. In a service oriented business, it would be the duty roster of various personnel. This information is mostly internal to the organization. 

6. Database Information 

Database information construes large quantities of information that has multiple usage and application. Such information is stored, retrieved and managed to create databases. For example, material specification or supplier information its stored for multiple users.