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MANAGEMENT INFORMATION SYSTEMS

LECTURE 1: INTRODUCTION TO MANAGEMENT INFORMATION SYSTEMS

o the managers, Management Information System is an implementation of the organizational

systems and procedures. To a programmer it is nothing but file structures and file processing.
However, it involves much more complexity.

The three components of MIS provide a more complete and focused definition,
where System suggests integration and holistic view, Information stands for processed data,
and Management is the ultimate user, the decision makers.

Management information system can thus be analyzed as follows −

Management

Management covers the planning, control, and administration of the operations of a concern.
The top management handles planning; the middle management concentrates on controlling;
and the lower management is concerned with actual administration.

Information

Information, in MIS, means the processed data that helps the management in planning,
controlling and operations. Data means all the facts arising out of the operations of the
concern. Data is processed i.e. recorded, summarized, compared and finally presented to the
management in the form of MIS report.

System
Data is processed into information with the help of a system. A system is made up of inputs,
processing, output and feedback or control.

Thus MIS means a system for processing data in order to give proper information to the
management for performing its functions.

Definition
Management Information System or '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 Information System (MIS) refers to a system that provides organizations with
tools to collect, process, store, and disseminate information for decision-making,
coordination, control, and analysis. It focuses on ensuring that management receives
accurate and timely information to improve efficiency and achieve organizational goals.

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Objectives of MIS

The goals of an MIS are to implement the organizational structure and dynamics of the
enterprise for the purpose of managing the organization in a better way and capturing the
potential of the information system for competitive advantage.

Following are the basic objectives of an MIS −

• Capturing Data − Capturing contextual data, or operational information that will

contribute in decision making from various internal and external sources of organization.
• Processing Data − The captured data is processed into information needed for planning,
organizing, coordinating, directing and controlling functionalities at strategic, tactical
and operational level. Processing data means −
o making calculations with the data
o sorting data
o classifying data and
o summarizing data
• Information Storage − Information or processed data need to be stored for future use.
• Information Retrieval − The system should be able to retrieve this information from the
storage as and when required by various users.
• Information Propagation − Information or the finished product of the MIS should be
circulated to its users periodically using the organizational network.

Characteristics of MIS

Following are the characteristics of an MIS −

• It should be based on a long-term planning.

• It should provide a holistic view of the dynamics and the structure of the organization.
• It should work as a complete and comprehensive system covering all interconnecting sub-
systems within the organization.
• It should be planned in a top-down way, as the decision makers or the management should
actively take part and provide clear direction at the development stage of the MIS.
• It should be based on need of strategic, operational and tactical information of managers
of an organization.
• It should also take care of exceptional situations by reporting such situations.
• It should be able to make forecasts and estimates, and generate advanced information,
thus providing a competitive advantage. Decision makers can take actions on the basis of
such predictions.
• It should create linkage between all sub-systems within the organization, so that the
decision makers can take the right decision based on an integrated view.
• It should allow easy flow of information through various sub-systems, thus avoiding
redundancy and duplicity of data. It should simplify the operations with as much
practicability as possible.
• Although the MIS is an integrated, complete system, it should be made in such a flexible
way that it could be easily split into smaller sub-systems as and when required.
• A central database is the backbone of a well-built MIS.

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Characteristics of Computerized MIS

Following are the characteristics of a well-designed computerized MIS −

• It should be able to process data accurately and with high speed, using various techniques
like operations research, simulation, heuristics, etc.
• It should be able to collect, organize, manipulate, and update large amount of raw data of
both related and unrelated nature, coming from various internal and external sources at
different periods of time.
• It should provide real time information on ongoing events without any delay.
• It should support various output formats and follow latest rules and regulations in
practice.
• It should provide organized and relevant information for all levels of management:
strategic, operational, and tactical.
• It should aim at extreme flexibility in data storage and retrieval.
Nature and Scope of MIS

The following diagram shows the nature and scope of MIS −

Role of MIS in Organizations

1. Decision Making: MIS supports management by providing real-time data and reports, which
helps in making informed and data-driven decisions.
2. Coordination and Control: It facilitates coordination across departments and ensures that all
functions are aligned with organizational objectives.
3. Efficiency and Productivity: By automating routine processes and transactions, MIS enhances
operational efficiency, reduces errors, and boosts productivity.
4. Strategic Planning: It helps in formulating long-term strategies by providing analytical tools
and reports for future forecasting and trends.
5. Problem Identification: MIS helps in identifying problems early by monitoring organizational
processes and performance metrics.

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Types of Information Systems

1. Transaction Processing Systems (TPS): These systems manage and process day-to-day
business transactions, such as payroll, sales, and inventory management.
2. Decision Support Systems (DSS): DSS provides data analysis tools to help managers make
complex decisions based on both quantitative and qualitative data.
3. Management Information Systems (MIS): Provides regular reports based on data from TPS
and helps middle management with performance monitoring and decision-making.
4. Executive Information Systems (EIS): Designed for senior executives to provide access to
critical information in a simplified format for strategic decision-making.
5. Enterprise Resource Planning (ERP): Integrated systems that combine all the functions of a
business (finance, HR, supply chain) into a single system.
6. Customer Relationship Management (CRM): Focuses on managing a company’s interactions
with current and potential customers using data analysis.

Evolution of MIS

1. 1950s–1960s: Early MIS systems were primarily manual and clerical, focusing on data
collection through punch cards and paper records.
2. 1970s: Introduction of electronic data processing and early computer systems to handle
repetitive data tasks like payroll and inventory.
3. 1980s: The advent of Database Management Systems (DBMS), which allowed businesses to
organize large sets of data in structured ways.
4. 1990s: Growth of networking technologies and the development of enterprise systems such as
ERP and CRM to integrate all aspects of business operations.
5. 2000s–present: The rise of cloud computing, Big Data, and Artificial Intelligence (AI) have
transformed MIS, allowing for more scalable, predictive, and intelligent decision-making
systems.

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MIS- Information:

Information can be classified in a number of ways and in this chapter, you will learn two of the
most important ways to classify information.

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. Operational 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 by Application

In terms of applications, information can be categorized as −

• 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.
• 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.
• 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.
• 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.
• 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.
• 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
is stored for multiple users.
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MIS- Quality of Information:

Information is a vital resource for the success of any organization. Future of an organization lies
in using and disseminating information wisely. Good quality information placed in right context
in right time tells us about opportunities and problems well in advance.

Good quality information − Quality is a value that would vary according to the users and uses
of the information.

According to Wang and Strong, following are the dimensions or elements of Information Quality
−

• Intrinsic − Accuracy, Objectivity, Believability, Reputation

• Contextual − Relevancy, Value-Added, Timeliness, Completeness, Amount of information
• Representational − Interpretability, Format, Coherence, Compatibility
• Accessibility − Accessibility, Access security

Various authors propose various lists of metrics for assessing the quality of information. Let us
generate a list of the most essential characteristic features for information quality −

• Reliability − It should be verifiable and dependable.

• Timely − It must be current and it must reach the users well in time, so that important
decisions can be made in time.
• Relevant − It should be current and valid information and it should reduce uncertainties.
• Accurate − It should be free of errors and mistakes, true, and not deceptive.
• Sufficient − It should be adequate in quantity, so that decisions can be made on its basis.
• Unambiguous − It should be expressed in clear terms. In other words, in should be
comprehensive.
• Complete − It should meet all the needs in the current context.
• Unbiased − It should be impartial, free from any bias. In other words, it should have
integrity.
• Explicit − It should not need any further explanation.
• Comparable − It should be of uniform collection, analysis, content, and format.
• Reproducible − It could be used by documented methods on the same data set to achieve
a consistent result.

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