Management Information System (MIS)

MIS can be defined as –

 “A system which collects, processes, stores and distributes information to

help in decision making for managerial functions.”

(Planning, staffing, directing, controlling, organizing and budgeting)

 The Purpose and Scope of MIS can be defined as

“The combination of human and computer based resources that
results in the collection, storage, retrieval, communication and use of data
for the purpose of efficient management of operations and for business
planning”.
 It may also be defined as Integrated user/ Machine system for providing
information to support the decision making process.

Role of MIS
 MIS is a computer based system, which presents both external and internal
information of business.
 This system utilizes computer hardware and software, manual procedure for
analysis, planning, control and decision making.
 These system do not take decisions but they assist in providing a necessary
information as an input to the decision making process.
 MIS should provide information which is consistent, accurate, timely,
economically flexible and relevant.
 MIS can be computerized or manual. MIS provides information in report
format on regular basis to assist managers with decision which occur
frequently and can be anticipated.
 The MIS satisfies the diverse needs through Query Systems, Analysis Systems,
Modeling Systems, and Decision Support Systems.
 MIS helps in Strategic Planning, Management control, Operational control,
Transaction processing.
 Helps middle management- Short term planning, Target setting, Controlling
the business functions.
 Helps top management-Goal setting, Strategic planning, Evolving the business
plans and their implementations
 MIS is tool which helps the management by providing the right info to right
person at right place at the right time in the right form and at the right cost.

Characteristics of a MIS
• Provides reports with fixed and standard formats
– Hard-copy and soft-copy reports
• Uses internal data stored in the computer system
• It provides job responsibility
• It provides information to all types of users
• End users can develop custom reports

Features of MIS:
1. It must be capable of handling voluminous data. The data as well as
transactions must be validated.
2. It must be able to perform operations on the data irrespective of the
complexity of the operations. Often time multi-dimensional analysis is
required.
3. An MIS should facilitate quick search and retrieval of information. An MIS
must support mass storage of data and information.
4. The information must be communicated to the recipient in time. Moreover,
the communicated information must be relevant.

Functions of MIS
 Planning: A selection to various alternatives- strategy, resource and
methods etc.
 Organization: A selection of combination out of several combinations of
the goals, people, resources, methods and authority.
 Staffing: Providing proper manpower complement
 Directing: Choosing a method from the various methods of directing the
efforts in the organization.
 Coordinating: Choice of the tools and the techniques for coordinating the
efforts for optimum results
 Controlling: A selection of the exceptional conditions and providing the
decision guidance to deal with them.

MIS SUB-SYSTEMS
An MIS can be viewed as a set of subsystems that provide information for
such functions as:

 Production
 Marketing
 Human resources
 Accounting
 Finance
 Production MIS: Provides info on production/operation activities of an
organization
 Financial MIS: Provides financial information to all financial managers
within an organization
 Marketing MIS: Support managerial activities in product development,
distribution, pricing decisions, and promotional effectiveness
 Accounting MIS: Provides aggregated information on accounts payable,
account receivable, payroll, and other applications
 Human Resources: Supports the functions of human resource management
of an organization. Manpower planning, staffing, training& development
etc
Outputs of MIS
 Scheduled reports
oProduced periodically, or on a schedule (daily, weekly, monthly)
 Key-indicator report
o Summarizes the previous day’s critical activities
o Typically available at the beginning of each day
 Demand report
o Gives certain information at a manager’s request
 Exception report
◦ Automatically produced when a situation is unusual or requires
management action
ADVANTAGES:
1. It provides timely, accurate, scientific, reliable and permanent information.
2. It coordinates the whole organization.
3. It provides the information as required by the information seeker.
4. It helps in making better and scientific decisions by the management.
5. Speed of processing and fast retrieval of data is possible.
6. MIS assembles, process , stores , Retrieves , evaluates and Disseminates the
information
Disadvantages/limitations of MIS:
1. Highly sensitive information requires constant monitoring.
2. Budgeting of MIS is extremely difficult.
3. Quality of outputs governed by quality of inputs.
4. Lack of flexibility to update itself with changing needs of time.
5. Effectiveness decreases due to frequent changes in top management.
6. Takes into account only qualitative factors and ignores non-qualitative
factors like morale of worker, attitude of worker etc...
 Differences between AIS and MIS
AIS MIS
Is concerned about day to day running of the MIS is mainly used for strategic planning which
business with subsystems such as Transaction involves identifying a company’s long run goal and
Processing System (TPS). developing plans for achieving these goals.

Records financial transactions which are economic goes beyond AIS in that it records financial
events that affect assets and equities of a firm and transactions and non-financial transactions.
is measured in monetary terms for instance sale of
goods to customers cash movements etc.

provides information for internal and external use. MIS principally provides information to internal
parties.
AIS is used as a tool for short term decision MIS gives data for long term decision making and
making. control.

It uses historical data. MIS is futuristic that is decisions are made based
on projections.

supports stewardship management with MIS is used as a yardstick for measuring

information contained in the financial statements performance. Managers make future projections
and responsibility report. Information is about and hence actual results are compared with the
how resources are utilised and safeguarded. projections made.

provide information that conforms to Generally Is produced in a variety of formats that meet the
Accepted Accounting Principles (GAAP). particular information needs of a company’s
managers.