MANAGEMENT INFORMATION SYSTEM

Information is the basis for every decision taken in an organization. The efficiency of
management depends upon the availability of regular and relevant information. Thus it is
essential that an effective and efficient reporting system be developed as part of accounting
system. The main object of management information is to obtain the required about the operating
results of an organization regularly in order to use them for future planning and control.
The old techniques like intuition, rule of thumb, personal whim and prestige, etc. are now
considered useless in the process of decision taking. Modern management is constantly on look
out for such quantitative and such information, which can help in analyzing the proposed
alternative actions and choosing one as its decision. Thus, modern management functions are
information-oriented more popularly known as management by information. And the system
through which information is communicated to the management is known as management
information system (MIS). The management needs full information before taking any decision.
good decisions can minimize costs and optimize results. Management information system can be
helpful to the management in undertaking management decisions smoothly and effectively.

Management information system can be analyzed thus:

1.
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.
2.
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.
3.
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.

System Analysis and Design (SAD)

Introduction to System Analysis and Design (SAD)
System are created to solve Problems. One can think of the systemsapproch as an
organised way of dealing with a problem. In this dynamic world, the subject system

analysis and design, mainly deals with the software development activities.
This post include:

What is System?
What are diffrent Phases of System Development Life Cycle?
What are the component of system analysis?
What are the component of system designing?

What is System?
A collection of components that work together to realize some objectives
forms a system. Basically there are three major components in
every system, namely input, processing and output.

In a system the different components are

connected with each other and they are interdependent. For example, human body
represents a complete natural system. We are also bound by many national systems
such as political system, economic system, educational system
and so forth. The objective of the system demands that some output is produced as a
result of processing the suitable inputs. A well-designed system also includes an
additional element referred to as control that provides a feedback to achieve desired
objectives
of the system.

SYSTEM LIFE CYCLE

System life cycle is an organizational process of developing and maintaining systems. It
helps in establishing a system project plan, because it gives overall list of processes
and sub-processes required for developing a system.
System development life cycle means combination of various activities. In other words
we can say that various activities put together are referred as system development life
cycle. In the System Analysis and Design terminology, the system development life
cycle also means software development life cycle.
Following are the different phases of system development life cycle:

Preliminary Study

Feasibility study

Detailed system study

System analysis

System design

Coding

Testing
Implementation
Maintenance

The different phases of system development life cycle is shown in this diagram

Phases of System Development Life

Cycle
PHASES OF SYSTEM DEVELOPMENT LIFE CYCLE
Let us now describe the different phases and related activities of system development
life cycle.
(a) Preliminary System Study
Preliminary system study is the first stage of system development life cycle. This is a
brief investigation of the system under consideration and gives a clear picture of what
actually the physical system is? In practice, the initial system study involves the
preparation of a
System Proposal which lists the Problem Definition, Objectives of the Study, Terms of
reference for Study, Constraints, Expected benefits of the new system, etc. in the light
of the user requirements.
The system proposal is prepared by the System Analyst (who studiesthe system) and
places it before the user management. The management may accept the proposal and
the cycle proceeds to the next stage. The management may also reject the proposal or
request some modifications in the proposal. In summary, we would say that system
study phase passes through the following steps:

Problem identification and project initiation

Background analysis
Inference or findings (system proposal)

(b) Feasibility Study

In case the system proposal is acceptable to the management, the next phase is to
examine the feasibility of the system. The feasibility study is basically the test of the
proposed system in the light of its workability, meeting users requirements, effective
use of resources and of course, the cost effectiveness. These are categorized as
technical, operational, economic and schedule feasibility. The main goal of feasibility
study is not to solve the problem but to achieve the scope. In the process of feasibility

study, the cost and benefits are estimated with greater accuracy to find the Return on
Investment (ROI). This also defines the resources needed to complete the detailed
investigation. The result is a feasibility report submitted to the management. This may
be accepted or accepted with modifications or rejected. The system cycle proceeds only
if the management accepts it.
(c) Detailed System Study
The detailed investigation of the system is carried out in accordance with the objectives
of the proposed system. This involves detailed study of various operations performed by
a system and their relationships within and outside the system. During this process,
data
are collected on the available files, decision points and transactions handled by the
present system. Interviews, on-site observation and questionnaire are the tools used for
detailed system study. Using the following steps it becomes easy to draw the exact
boundary of the new system under consideration:

Keeping in view the problems and new requirements

Workout the pros and cons including new areas of the system

All the data and the findings must be documented in the form of detailed data flow
diagrams (DFDs), data dictionary, logical data structures and miniature specification.
The main points to be discussed in this stage are:

Specification of what the new system is to accomplish based on the user

requirements.

Functional hierarchy showing the functions to be performed by the new system

and their relationship with each other.

Functional network, which are similar to function hierarchy but they highlight the
functions which are common to more than one procedure.

List of attributes of the entities these are the data items which need to be held
about each entity (record)
(d) System Analysis
Systems analysis is a process of collecting factual data, understand the processes
involved, identifying problems and recommending feasible suggestions for improving
the system functioning. This involves studying the business processes, gathering
operational data, understand the information flow, finding out bottlenecks and evolving
solutions for overcoming the weaknesses of the system so as to achieve the
organizational goals. System Analysis also includes subdividing of complex process
involving the entire system, identification
of data store and manual processes.
The major objectives of systems analysis are to find answers for each business
process: What is being done, How is it being done, Who is doing it, When is he doing it,
Why is it being done and How can it be improved? It is more of a thinking process and
involves the creative skills of the System Analyst. It attempts to give birth to a new
efficient system that satisfies the current needs of the user and has scope for future

growth within the organizational constraints. The

result of this process is a logical system design. Systems analysis is an iterative
process that continues until a preferred and acceptable solution emerges.
(e) System Design
Based on the user requirements and the detailed analysis of the existing system, the
new system must be designed. This is the phase of system designing. It is the most
crucial phase in the developments of a system. The logical system design arrived at as
a result of systems analysis is converted into physical system design. Normally, the
design proceeds in two stages:

Preliminary or General Design: In the preliminary or general design, the

features of the new system are specified. The costs of implementing these features and
the benefits to be derived are estimated. If the project is still considered to be feasible,
we move to the detailed design stage.

Structured or Detailed Design: In the detailed design stage, computer oriented

work begins in earnest. At this stage, the design of the system becomes more
structured. Structure design is a blue print of a computer system solution to a given
problem having the same components and inter-relationships among the same
components as the original problem. Input, output, databases, forms, codification
schemes and processing specifications are drawn up in detail.
In the design stage, the programming language and the hardware and software platform
in which the new system will run are also decided. There are several tools and
techniques used for describing the system design of the system. These tools and
techniques are:

Flowchart
Data flow diagram (DFD)
Data dictionary
Structured English
Decision table
Decision tree

Each of the above tools for designing will be discussed in detailed in the next lesson.
The system design involves:
i. Defining precisely the required system output
ii. Determining the data requirement for producing the output
iii. Determining the medium and format of files and databases
iv. Devising processing methods and use of software to produce output
v. Determine the methods of data capture and data input
vi. Designing Input forms
vii. Designing Codification Schemes
viii. Detailed manual procedures
ix. Documenting the Design

(f) Coding
The system design needs to be implemented to make it a workable system. This
demands the coding of design into computer understandable language, i.e.,
programming language. This is also called the programming phase in which the
programmer converts the program specifications into computer instructions, which we
refer to as programs. It is an important stage where the defined procedures are
transformed into control specifications by the help of a computer language. The
programs coordinate the data movements and control the entire process in a system. It
is generally felt that the programs must be modular in nature. This helps in fast
development, maintenance and future changes, if required.
(g) Testing
Before actually implementing the new system into operation, a test run of the system is
done for removing the bugs, if any. It is an important phase of a successful system.
After codifying the whole programs of the system, a test plan should be developed and
run on a given set of test data. The output of the test run should match the expected
results. Sometimes, system testing is considered a part of implementation process.
Using the test data following test run are carried out:

Program test: When the programs have been coded, compiled and brought to
working conditions, they must be individually tested with the prepared test data. Any
undesirable happening must be noted and debugged (error corrections)

System Test: After carrying out the program test for each of the programs of the
system and errors removed, then system test is done. At this stage the test is done on
actual data. The complete system is executed on the actual data. At each stage of the
execution, the results or output of the system is analysed. During the result analysis, it
may be found that the outputs are not matching the expected output of the system. In
such case, the errors in the particular programs are identified and are fixed and further
tested for the expected output. When it is ensured that the system is running error-free,
the users are called with their own actual data so that the system could be shown
running as per their requirements.
(h) Implementation
After having the user acceptance of the new system developed, the implementation
phase begins. Implementation is the stage of a project during which theory is turned into
practice. The major steps involved in this phase are:

Acquisition and Installation of Hardware and Software

Conversion
User Training
Documentation

The hardware and the relevant software required for running the system must be made
fully operational before implementation. The conversion is also one of the most critical
and expensive activities in the system development life cycle. The data from the old

system needs to be converted to operate in the new format of the new system. The
database needs to be setup with security and recovery procedures fully defined.
During this phase, all the programs of the system are loaded onto the users computer.
After loading the system, training of the user starts. Main topics of such type of training
are:

How to execute the package

How to enter the data
How to process the data (processing details)
How to take out the reports

After the users are trained about the computerized system, working has to shift from
manual to computerized working. The process is called Changeover. The following
strategies are followed for changeover of the system.
(i) Direct Changeover: This is the complete replacement of the old system by the new
system. It is a risky approach and requires comprehensive system testing and training.
(ii) Parallel run: In parallel run both the systems, i.e., computerized and manual, are
executed simultaneously for certain defined period. The same data is processed by both
the systems. This
strategy is less risky but more expensive because of the following:

Manual results can be compared with the results of the computerized system.

The operational work is doubled.

Failure of the computerized system at the early stage does not affect the working
of the organization, because the manual system continues to work, as it used to do.
(iii) Pilot run: In this type of run, the new system is run with the data from one or more of
the previous periods for the whole or part of the system. The results are compared with
the old
system results. It is less expensive and risky than parallel run approach. This strategy
builds the confidence and the errors are traced easily without affecting the operations.
The documentation of the system is also one of the most important activity in the
system development life cycle. This ensures the continuity of the system. There are
generally two types of documentation prepared for any system. These are:

User or Operator Documentation

System Documentation

The user documentation is a complete description of the system from the users point of
view detailing how to use or operate the system. It also includes the major error
messages likely to be encountered by the users. The system documentation contains
the details of system design, programs, their coding, system flow, data dictionary,
process description, etc. This helps to understand the system and permit changes to be
made in the existing system to satisfy new user needs.
(i) Maintenance

Maintenance is necessary to eliminate errors in the system during its working life and to
tune the system to any variations in its working environments. It has been seen that
there are always some errors found in the systems that must be noted and corrected. It
also means the review of the system from time to time. The review of the system is
done for:

knowing the full capabilities of the system

knowing the required changes or the additional requirements
studying the performance.

If a major change to a system is needed, a new project may have to be set up to carry
out the change. The new project will then proceed through all the above life cycle
phases.

TYPES OF INFORMATION SYSTEM

Information systems differ in their business needs and the information varies
depending upon different levels in organization. information system can be broadly
categorized into following :

Transaction processing system

Management Information System

Decision support system

The information needs are different at different organizational levels. Accordingly the
information can be categorized into following:

Strategic information

Managerial information

Operational information.

Transaction Processing Systems

1.
It processes business transaction of the organization. Transaction can be
any activity of the organization. For example, take a railway reservation
system. Booking, canceling, etc are all transactions. Any query made to it is a
transaction.
2.
This provides high speed and accurate processing of record keeping of
basic operational processes and include calculation, storage and retrieval.
3.
Transaction processing systems provide speed and accuracy, and can be
programmed to follow routines functions of the organization.
Management Information Systems
1.
It assist lower management in problem solving and making decisions.
They use the results of transaction processing and some other information also.
2.
An important element of MIS is database.A database is a non-redundant
collection of interrelated data items that can be processed through application
programs and available to many users.
Decision Support Systems
1.
These systems assist higher management to make long term decisions.
These type of systems handle unstructured or semi structured decisions. A
decision is considered unstructured if there are no clear procedures for making
the decision and if not all the factors to be considered in the decision can be
readily identified in advance.
2.
A decision support system must very flexible.
3.
The user should be able to produce customized reports by giving
particular data and format specific to particular situations.

Importance Of MIS In Organizations

In today's scenario MIS plays a pivotal role in Organizations. Organizations worldwide
makes extensive use of MIS.Its desgined by the top management of an organization, is
a tool to assembling & accumulating facts & figures of all the important business
processes.
MIS is a very vast topic , its very difficult to cover the whole in one article. Thus here are
some of the major importance / advantages of MIS in organizations:

The organization that uses MIS is able to record ,process, route & tabulate all
important business transactions. As & when need arises the organization is able to
incorporate the needed changes & improvements in the area of concern.

MIS facilitates informed DECISION MAKING.It usuallly represents a number of

options from which one can choose the best.

The top management ANALYSES whether its resources are being utillized
optimally.

A TWO WAY COMMUNICATION FLOW is greatly enhanced by the MIS. The

management freelytells the jobv responsibilities to its employees.The employees in
return discuss their doubts & grievances.

MIS supports the planning & controlling function of managers in the

organization.Managers use past/historical data as well as the current data to analyse
the performance & hence apply controlling measures.

MIS encourages DECENTRALISATION in the organisation.Decentralisationis

possible when there's a system to measure operations at the lower levels.

It brings COORDINATION. It facilitates integration of specialized activities by

keeping each department aware of the problems & requirements of other departments.
Hence, in some way MIS keeps the organization binded.

Difference between DSS & MIS

1.
MIS functions to produce routine reports,DSS employ sophisticated data
modelling & analysis tools for the purpose of resolving structured problems.
2.
MIS is used by a limited group (staff managers & professionals), DSS are
used by groups,individuals & managers at various levels.
3.
DSS is charachterized by an adaptability which contrasted with the semiinflexible nature of MIS.
4.
DSS data sources are much more varied comprising inventory, accounting
& production sources & not just internal business ones & its analytical tools are
more sophisticated(simulation,atatistical analysis).
Thus, MIS & DSS are differentiated in terms of components, dynamics , analytical tools
& general properties.

OBJECTIVES OF DBMS
Shareability: An ability to share data resources is a fundamental objective of database
management. In its fullest interpretation, this means different people and different
processes using the same actual data at virtually the same time. Rather far reaching
ramifications stem from the stated objective of shareability:

- Serving differently types of users with varying skill levels

- Handling different user views of the same stored data.

- Combining interrelated data

- Setting standards

- Controlling concurrent updates so as to maintain data integrity

- Coordinating restart and recovery operations across multiple users.This list

indicates some of the additional problems which arise in managing shared data. A
central implication of sharing is that compromise will often be required between
conflicting user needs as, for example, in the establishment of a data structure and
corresponding storage structure.

Availability: Availability means bringing the data of an organization to the users of

that data. They system which manages data resources should be easily accessible to
the people within n organization making the data available when and where it is
needed, and in the manner and form in which it is needed. Availability refers to both
the data and the DBMS which delivers the data. Availability functions make the
database available to users: defining and creating a database, and getting data in and
out of a database. These are the direct functions performed by a DBMS. A DBMS
should accommodate diversity in the data stored.
The bulk of organization data, as traditionally handled in accounting systems, lied in
the enclosed region of historical, internal, financial data. A database management
system must be capable of reaching beyond this region to handle greater diversity in
the data stored, including subjective data, fragmentary marketing intelligence data,
uncertain forecasts and aggregated data, as well as factual marketing, manufacturing,
personnel and accounting data.
Evolvability: Evolvability refers to the ability of the DBMS to change in response to
growing user needs and advancing technology. Evolvability is the system
characteristic that enhances future availability of the data resources. Evolvability is
not the same as expandability or extensibility, which imply extending or adding to the
system, which then grows ever larger. Evolvability covers expansion or contraction,
both of which may occur as the system changes to fit the ever changing needs and
desires of the using environment.
Adaptability is a more advanced form of evolvability in which built in algorithms
enable a system to change itself, rather than having a change made to it. Adaptability
involves purposive, self organizing, or self controlling behavior, that is, self regulation
toward a single criterion of success: ultimate, long-term survival. A system exhibiting
adaptive behavior actively seeks a particular state or goal by changing itself in
response to a change in itself or its environment. Evolvability implies the gradual
unfolding, development and growth of a system to better meet the needs of the using
environment: and it implies change of the system in response to changing needs and
technology. With the present state of technology, such change is externally
administered. In the future such change may occur automatically within the system,
thus exhibiting adaptive behavior.
Integrity: The importance and pervasiveness of the need to maintain database
integrity is rooted in the reality that man is perfect. Destruction, errors and improper
disclosure must be anticipated and explicit mechanisms provided for handling them.
The three primary facets of database integrity are:
protecting the existence of the database

Maintaining the quality of the database

Ensuring the privacy of the database.In developing DBMSs, the accountants concept
of internal control has been practically ignored. Computer specialists need such
concepts to improve database integrity and enhance management confidence.

CONCEPTUAL VIEW OF MIS

The concept is a blend of principles, theories and practices of management,

information and system giving rise to a single product called MANAGEMENT
INFORMATION SYSTEM.
The concept of management gives high regard to the individual and his ability to use
the information. MIS gives information through data analysis. While analyzing the
information, it relies on many academic disciplines like management science, OR,
organization behavior, psychology, etc.
The foundation of MIS is the principles of management and its practices. MIS uses
the concept of management control in its design and relies heavily on the fact that the
decision maker is a human being and is a human processor of information.
A MIS can be evolved for a specific objective it is evolved after systematic planning
and design. It calls for an analysis of business, management views and policies,
organization culture and the management style.
The MIS,therefore relies heavily on systems theory.The systems theory offers
solutions to handle complex situations of the input and output flows. it uses theory of
communication which helps to evolve a system design capable of handling data
inputs, process, the outputs with the least possible noise or distortion in transmitting
the information from a source to destination.

BASICS OF DSS
WHAT IS DSS?
DSS is an interactive software-based system intended to help decision makers
compile useful information from raw data, documents, personal knowledge, and/or
business models to identify and solve problems and make decisions.

Levels of Management in Decision Making

Strategic management
1.
Executives develop organizational goals, strategies, policies, and
objectives
2.
As part of a strategic planning process

Tactical management
1.
Managers and business professionals in self-directed teams
2.
Develop short- and medium-range plans, schedules and budgets
3.
Specify the policies, procedures and business objectives for their
subunits

Operational management
1.
Managers or members of self-directed teams
2.
Develop short-range plans such as weekly production schedules
DECISION STRUCTURE
Structured Decisions situations where the procedures to follow when a
decision is needed can be specified in advance

 Unstructured Decisions decision situations where it is not possible to specify

in advance most of the decision procedures to follow
Semi structured Decisions - decision procedures that can be prespecified, but
not enough to lead to a definite recommended decision

COMPONENTS OF DSS

CLASSIFICATION OF DSS
Model-driven DSS
Communication-driven DSS

 Data-driven DSS
Document-driven DSS
Knowledge-driven DSS
BENEFITS OF DSS
1.
2.
3.
4.
5.
6.
7.
8.

Improves personal efficiency

Accelerate problem solving
Facilitates interpersonal communication
Promotes learning or training
Increases organizational control
Generates new evidence in support of a decision
Creates a competitive advantage over competition
Reveals new approaches to thinking about the problem space

Need For System Analysis

NEED FOR SYSTEMS ANALYSIS AND DESIGN
Systems analysis and design, as performed by systems analysts, seeks to understand
what humans need to analyze data input or data flow systematically, process or
transform data, store data, and output information in the context of a particular
business. Furthermore, systems analysis and design is used to analyze, design,
and implement improvements in the support of users and the functioning of
businesses that can be accomplished through the use of computerized information
systems.
Installing a system without proper planning leads to great user dissatisfaction
and frequently causes the system to fall into disuse. Systems analysis and design
lends structure to the analysis and design of information systems, a costly endeavor
that might otherwise have been done in a haphazard way. It can be thought of as a
series of processes systematically undertaken to improve a business through the
use of computerized information systems. Systems analysis and design involves
working with current and eventual users of information systems to support them
in working with technologies in an organizational setting.
User involvement throughout the systems project is critical to the successful
development of computerized information systems. Systems analysts, whose roles
in the organization are discussed next, are the other essential component in developing
useful information systems.
Users are moving to the forefront as software development teams become
more international in their composition. This means that there is more emphasis
on working with software users; on performing analysis of their business, problems,
and objectives; and on communicating the analysis and design of the planned

system to all involved.

New technologies also are driving the need for systems analysis. Ajax
(Asynchronous JavaScript and XML) is not a new programming language, but a
technique that uses existing languages to make Web pages function more like a
traditional desktop application program. Building and redesigning Web pages that
utilize Ajax technologies will be a task facing analysts. New programming languages,
such as Ruby on Rails, which is a combination programming language and code
generator for creating Web applications, will require more analysis.

Use of Information Management Systems

The management of Information is facilitated by the use of Information Technology and
Information Sciences. The popular Information Management Systems can be listed as
follows:
DOCUMENT MANAGEMENT SYSTEM (DMS)
The DMS is focused primarily on the storage and retrieval of self-contained electronic
data resources in the document form. Generally, The DMS is designed to help the
organizations to manage the creation and flow of documents through the provision of a
centralized repository. The workflow of the DMS encapsulates business rules and
metadata.
CONTENT MANAGEMENT SYSTEM (CMS)
The CMS assist in the creation, distribution, publishing, and management of the
enterprise information. These systems are generally applicable on the online content
which is dynamically managed as a website on the internet or intranet. The CMS
system can also be called as web content management (WCM).
LIBRARY MANAGEMENT SYSTEM (LMS)
Library management systems facilitate the library technical functions and services that
include tracking of the library assets, managing CDs and books inventory and lending,
supporting the daily administrative activities of the library and the record keeping.
RECORDS MANAGEMENT SYSTEM (RMS)
The RMS are the recordkeeping systems which capture, maintain and provide access to
the records including paper as well as electronic documents, efficiently and timely.

DIGITAL IMAGING SYSTEM (DIS)

The DIS assist in automation of the creation of electronic versions of the paper
documents such as PDFs or Tiffs. So created Electronic documents are used as an
input to the records management systems.
LEARNING MANAGEMENT SYSTEM (LMS)
Learning management systems are generally used to automate the e-learning process
which includes the administrative process like registering students, managing training
resources, creating courseware, recording results etc.
GEOGRAPHIC INFORMATION SYSTEM (GIS)
The GIS are special purpose, computer-based systems that facilitate the capture,
storage, retrieval, display and analysis of the spatial data.

Decision Making
Decision making can be regarded as an outcome of mental processes (cognitive
process) leading to the selection of a course of action among several alternatives. Every
decision making process produces a final choice. The output can be an action or an
opinion of choice.
Decision making is a reasoning or emotional process which can be rational or irrational,
can be based on explicit assumptions or tacit assumptions.Thus here an important
concept comes of RATIONAL DECISION MAKING
Rational Decision Making
A rational decision is the one which, effectively and efficiently, ensures the achievement
of the goal for which the decision is made. In reality, there is no right or wrong decision
but a rational or an irrational decision. The quality of decision making is to be judged on
the rationality and not necessarily on the result it produces. The rationality of the
decision made is not the same in every situation. It will vary with the organization, the
situation and the individuals view of the business situation. The rationality, therefore, is
a multi-dimensional concept. For example, the business decisions in a private
organization and a Public Sector Undertaking differ under the head of rationality. The
reason for this difference in rationality is the different objectives of the decision makers.
Simon Herbert differentiates among the types of rationality. A decision, in a given
situation is:
Objectively rational if it maximizes the value of the objective.

Subjectively rational if it maximizes the attainment of value in relation to the knowledge

and awareness of the subject.

Consciously rational to the extent the process of the decision making is a conscious

one.

Organizationally rational to the degree of the orientation towards the organization.

Personally rational to the extent it achieves an individuals personal goals.

CLASSIFICATION OF DECISION MAKING SYSTEMS

The decision making systems can be classified in a number of ways. There are two types of systems based on the
managers knowledge about the environment.

A. Closed decision making system:

If the manager operates in a known environment then it is a closed decision making
system. The conditions of the closed decision making system are:
(a) The manager has a known set of decision alternatives and knows their outcomes
fully in terms of value, if implemented.
(b) The manager has a model, a method or a rule whereby the decision alternatives can
be generated, tested, and ranked.
(c) The manager can choose one of them, based on some goal or objective.
A few examples are:
1.
a product mix problem,
2.
an examination system to declare pass or fail, or
3.
an acceptance of the fixed deposits.

B. Open decision making system:

If the manager operates in an environment not known to him, then the decision making
system is termed as an open decision making system. The conditions of this system
are:
(a) The manager does not know all the decision alternatives.
(b) The outcome of the decision is also not known fully. The knowledge of the outcome
may be a probabilistic one.
(c) No method, rule or model is available to study and finalize one decision among the
set of decision alternatives.
(d) It is difficult to decide an objective or a goal and, therefore, the manager resorts to
that decision, where his aspirations or desires are met best.
Deciding on the possible product diversification lines, the pricing of a new product, and
the plant location, are some decision making situations which fall in the category of the
open decision making systems.

The MIS tries to convert every open system to a closed decision making system by
providing information support for the best decision. The MIS gives the information
support, whereby the manager knows more and more about the environment and the
outcomes, he is able to generate the decision alternatives, test them and select one of
them. A good MIS achieves this.

INFORMATION AS AN AID TO DECISION MAKING

How do we ensure rationality?
It is ensured, if the process of decision making is carried out systematically, whereby all
the aspects of the decision making discussed above are taken care of. Herbert Simon
said that a decision maker follows the process of decision making disregarding the
decision or the type of decision and the motive behind the decision. This process is
followed consciously or without knowing it. We can put this process in the Decision
Making Mode.
Simon (1977) describes the process of decision making as comprising four
steps:
1.Intelligence
2.Design
3.Choice
4.Later stage has been added with a view of improving the decision i.e. Review.
The intelligence stage: encompasses collection, classification, processing, and
presentation of data relating to the organization and its environment. This is necessary
to identify situations calling for decision.

During the design stage:, the decision maker outlines alternative solutions,
each of which involves a set of actions to be taken. The data gathered during the
intelligence stage are now used by statistical and other models to forecast possible
outcomes for each alternative. Each alternative can also be examined for technological,
behavioral, and economic feasibility.
In the choice stage:, the decision maker must select one of the alternatives that will
best contribute to the goals of the organization.
In the review stage:, past choices can be subjected to review during implementation
and monitoring to enable the manager to learn from mistakes. Information plays an
important role in all four stages of the decision process.
An example of the Simon Model would illustrate further its use in the MIS. For example,
a manager finds on collection and through the analysis of the data that the
manufacturing plant is under-utilized and the products which are being sold are not
contributing to the profits as desired. The problem identified, therefore, is to find a
product mix for the plant, whereby the plant is fully utilized within the raw material and
the market constraints, and the profit is maximized. The manager having identified this
as the problem of optimization, now examines the use of Linear Programming (LP)

Model. The model used to evolves various decision alternatives. However, selection is
made first on the basis of feasibility, and then on the basis of maximum profit.The
product mix so given is examined by the management committee. It is observed that the
market constraints were not realistic in some cases, and the present plant capacity can
be enhanced to improve the profit.

NATURE OF DECISION
Decision making is a complex situation. To resolve the complexity, the decisions are
classified as

programmed

non-programmed decisions.
If a decision can be based on a rule, method or even guidelines, it is called the
programmed decision. If the stock level of an item is 200 numbers, then the decision
to raise a purchase requisition for 400 numbers is a programmed-decision-making
situation. The decision maker here is told to make a decision based on the instructions
or on the rule of ordering a quantity of 400 items when its stock level reaches 200.If
such rules can be developed wherever possible, then the MIS itself can be designed to
make a decision and even execute. The system in such cases plays the role of a
decision maker based on a given rule or a method. Since the programmed decision is
made through MIS, the effectiveness of the rule can be analyzed and the rule can be
revived and modified from time to time for an improvement. The programmed decision
making can be delegated to a lower level in the management cadre.
A decision which cannot be made by using a rule or a model is the non-programmed
decision. Such decisions are infrequent but the stakes are usually larger. Therefore,
they cannot be delegated to the lower level. The MIS in the non-programmed-decision
situation can help to some extent, in identifying the problem, giving the relevant
information to handle the specific decision making situation. The MIS, in other words,
can develop decision support systems in the non-programmed-decision-making
situations.
FOUR ESSENTIAL DESCISIONS
1.Consider solutions
2.Choose a solution
3.Is there a problem or opportunity?
4.Is the choice working?
A significant part of decision making skills is in knowing and practicing good decision
making techniques. One of the most practical decision making techniques can be
summarized in those simple decision making steps:

1.
.Identify the purpose of your decision. What is exactly the problem to be
solved? Why it should be solved?
2.
Gather information. What factors does the problem involve?
3.
Identify the principles to judge the alternatives. What standards and
judgment criteria should the solution meet?
4.
Brainstorm and list different possible choices. Generate ideas for possible
solutions.
5.
Evaluate each choice in terms of its consequences. Use your standards
and judgment criteria to determine the cons and pros of each alternative.
6.
Determine the best alternative. This is much easier after you go through
the above preparation steps.
7.
Put the decision into action. Transform your decision into specific plan of
action steps. Execute your plan.
8.
Evaluate the outcome of your decision and action steps. What lessons can
be learnt? This is an important step for further development of your decision
making skills and judgment.

DECISION MAKING PROCESS

We use our decision making skills to solve problems by selecting one course of action
from several possible alternatives. Decision making skills are also a key component of
time management skills. Decision making can be hard. Almost any decision involves
some conflicts or dissatisfaction. The difficult part is to pick one solution where the
positive outcome can outweigh possible losses. Avoiding decisions often seems easier.
Yet, making your own decisions and accepting the consequence is the only way to stay
in control of your time, your success, and your life.
TYPES OF DECISIONS
The types of decisions are based on the degree of knowledge about the outcomes or
the events yet to take place. If the manager has full and precise knowledge of the event
or outcome which is to occur, then his problem of the decision making is not a problem.
If the manager has full knowledge, then it is a situation of certainty. If he has partial
knowledge or a probabilistic knowledge, then it is decision making under risk. If the
manager does not have any knowledge whatsoever, then it is decision making under
uncertainty.
A good MIS tries to convert a decision making situation under uncertainty to the
situation under risk and further to certainty. Decision making in the operations
management, is a situation of certainty. This is mainly because the manager in this field
has fairly good knowledge about the events which are to take place, has full knowledge
of environment, and has predetermined decision alternatives for choice or for
selection.Decision making at the middle management level is of the risk type. This is
because of the difficulty in forecasting an event with hundred per cent accuracy and the
limited scope of generating the decision alternatives.

At the top management level, it is a situation of total uncertainty of account of

insufficient knowledge of the external environment and the difficulty in forecasting
business growth on a long-term basis.A good MIS design gives adequate support to all
the three levees of management.
A manager can make two kinds of decision:
Structured which are repetitive and need a definite routine and procedure to
deal with them, e.g. stock is below 15 %, so an order need to be place with a supplier.

Unstructured require knowledge, insight, and evaluation. They may well crop
up without warning, and the right decision can be critical.

Understanding MIS risk

Risks Associated With MIS
Risk reflects the potential, the likelihood, or the expectation of events that could
adversely affect earnings or capital. Management uses MIS to help in the assessment
of risk within an institution. Management decisions based upon ineffective, inaccurate,
or incomplete MIS may increase risk in a number of areas such as credit quality,
liquidity, market/pricing, interest rate, or foreign currency. A flawed MIS causes
operational risks and can adversely affect an organization's monitoring of its fiduciary,
consumer, fair lending, Bank Secrecy Act, or other compliance-related activities. Since
management requires information to assess and monitor performance at all levels of the
organization, MIS risk can extend to all levels of the operations. Additionally, poorly
programmed or non-secure systems in which data can be manipulated and/or systems
requiring ongoing repairs can easily disrupt routine work flow and can lead to incorrect
decisions or impaired planning.
Assessing Vulnerability To MIS Risk
To function effectively as an interacting, interrelated, and interdependent feedback tool
for management and staff, MIS must be "useable." The five elements of a useable MIS
system are: timeliness, accuracy, consistency, completeness, and relevance. The
usefulness of MIS is hindered whenever one or more of these elements is
compromised.
Timeliness
To simplify prompt decision making, an institution's MIS should be capable of providing
and distributing current information to appropriate users. Information systems should be
designed to expedite reporting of information. The system should be able to quickly

collect and edit data, summarize results, and be able to adjust and correct errors
promptly.
Accuracy
A sound system of automated and manual internal controls must exist throughout all
information systems processing activities. Information should receive appropriate
editing, balancing, and internal control checks. A comprehensive internal and external
audit program should be employed to ensure the adequacy of internal controls.
Consistency
To be reliable, data should be processed and compiled consistently and uniformly.
Variations in how data is collected and reported can distort information and trend
analysis. In addition, because data collection and reporting processes will change over
time, management must establish sound procedures to allow for systems changes.
These procedures should be well defined and documented, clearly communicated to
appropriate employees, and should include an effective monitoring system.
Completeness
Decision makers need complete and pertinent information in a summarized form.
Reports should be designed to eliminate clutter and voluminous detail, thereby avoiding
"information overload."
Relevance
Information provided to management must be relevant. Information that is inappropriate,
unnecessary, or too detailed for effective decision making has no value. MIS must be
appropriate to support the management level using it. The relevance and level of detail
provided through MIS systems directly correlate to what is needed by the board of
directors, executive management, departmental or area mid-level managers, etc. in the
performance of their jobs.

Achieving Sound MIS

The development of sound MIS is the result of the development and enforcement of a
culture of system ownership. An "owner" is a system user who knows current customer
and constituent needs and also has budget authority to fund new projects. Building
"ownership" promotes pride in institution processes and helps ensure accountability.
Although MIS does not necessarily reduce expenses, the development of meaningful
systems, and their proper use, will lessen the probability that erroneous decisions will
be made because of inaccurate or untimely information. Erroneous decisions invariably
misallocate and/or waste resources. This may result in an adverse impact on earnings
and/or capital. MIS which meets the five elements of useability is a critical ingredient to
an institution's short- and long-range planning efforts. To achieve sound MIS, the

organization's planning process should include consideration of MIS needs at both the
tactical and strategic levels. For example, at a tactical level MIS systems and report
output should support the annual operating plan and budgetary processes. They should
also be used in support of the long term strategic MIS and business planning initiatives.
Without the development of an effective MIS, it is more difficult for management to
measure and monitor the success of new initiatives and the progress of ongoing
projects. Two common examples of this would be the management of mergers and
acquisitions or the continuing development and the introduction of new products and
services.
Management needs to ensure that MIS systems are developed according to a sound
methodology that encompasses the following phases:
Appropriate analysis of system alternatives, approval points as the system is
developed or acquired, and task organization.
Program development and negotiation of contracts with equipment and software
vendors.
Development of user instructions, training, and testing of the system.
Installation and maintenance of the system.
Management should also consider use of "project management techniques" to monitor
progress as the MIS system is being developed. Internal controls must be woven into
the processes and periodically reviewed by auditors.
Management also should ensure that managers and staff receive initial and ongoing
training in MIS. In addition, user manuals should be available and provide the following
information:
A brief description of the application or system.
Input instructions, including collection points and times to send updated information.
Balancing and reconciliation procedures.
A complete listing of output reports, including samples.
Depending on the size and complexity of its MIS system, an institution may need to use
different manuals for different users such as first-level users, unit managers, and
programmers.

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

1.
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
2.
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)
3.
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:
1. Database management system (DBMS): Stores large amounts of data
relevant to problems the DSS has been designed to tackle.
2. Model-based management system (MBMS): Transforms data from the DBMS
into information that is useful in decision making.
3. 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
4.
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
5.
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 faceto-face meeting will be necessary to discuss the nature of the problem.

MIS Functions
MIS is set up by an organization with the prime objective to obtain management
information to BE used by its managers in decision making. Thus, MIS must perform
the following functions in order to meet its objectives.
Data Capturing: MIS captures data from various internal and external sources
of an organization. Data capturing may BE manual or through computer terminals. End
users typically, record data about transactions on some physical medium, such as a
paper form, or enter it directly into a computer system.

Processing of Data: The captured data is processed to convert it into the

required management information. Processing of data is done by such activities
as calculating, comparing, sorting, classifying and summarizing. These activities
organize, analyze, and manipulate data using various statistical, mathematical,
operations research and other business models.
Storage of Information: MIS stores processed or unprocessed data for future
use. If any information is not immediately required, it is saved as an
organizational record. In this activity, data and information are retained in an
organized manner for later use. Stored data is commonly organized into fields,
records, files and databases.
Retrieval of Information: MIS retrieves information fro its stores as and when
required by various users. As per the requirements of management users, the
retrieved information is either disseminated as such or it is processed again to
meet the exact MI demands.
Dissemination of MI: Management Information, which is a finished product of
MIS, is disseminated to the users in the organization.

MIS CHARACTERISTICS

A MANAGEMENT INFORMATION
FOLLOWING CHARACTERISTICS.

SYSTEM

HAS

THE

System Approach: The information system follows a Systems approach. The systems
approach implies a holistic approach to the study of system and its performance in the
light for the objective for which it has been constituted. This approach is anti-piecemeal
in nature.
Management Oriented: This is an important characteristic of MIS. For designing of MIS,
top-down approach should BE followed. Top-down approach suggests that the system
development starts from the determination of management needs and overall business
objectives. The MIS development plan should BE derived from the overall business plan.
Management oriented characteristic of MIS also implies that the management actively
directs the system development efforts.
Need Based: MIS design and development should BE as per the information needs of
managers at different levels, viz., strategic planning level, management control level and
operational control level. In other words, MIS should cater to the specific needs of
managers in an organizations hierarchy.
Exception Based: MIS should BE developed on the exception based reporting principle,
which means an abnormal situation, i.e. the maximum, minimum or expected values vary
beyond tolerance limits. In such situations, there should BE exception reporting to the
decision maker at the required level.
Future Oriented: Besides exception based reporting, MIS should also look at the future. In
other words MIS should not merely provide past or historical information; rather it
should provide information, on the basis of projections based on which actions may BE
initiated.
Integrated: Integration is a necessary characteristic of a management information system.
Integration is significant because of its ability to produce more meaningful information.
For example, in order to develop an effective production scheduling system, it is
necessary to balance such factors as:
1. Set-up costs,
2. Work force
3. Overtime rates
4. Production capacity
5. Inventory level

6. Capital requirements
7. Customer services
Long Term Planning: MIS is developed over relatively long periods. Such system does
not develop overnight. A heavy element of planning is involved. The MIS designer must
have the future objectives and needs of the company in mind.
Sub-System Concept: The process of MIS development is quite complex and one is likely
to lose insight frequently. Thus, the system, though viewed as a single entity, must BE
broken down into digestible sub-systems which are more meaningful at the planning
stage.
Central Database: A central database is the mortar that holds the functional systems
together. Each system requires access to the master file of data covering inventory,
personnel, vendors, customers, etc. If the data is stored efficiently and common usage in
mind, one master file Can provide the data needed by any of the functional systems. It
seems logical to gather data once, to properly validate it and to place it on a central
storage medium, that Can BE accessed by any other sub system.

Essentials of a good MIS report

A MIS report is like a transport of information to those who need it. The essentials of a
good management reporting or information system are the following:
1. System should yield information required for the evaluation of each managers area of
responsibility in relation to the goals of the organisation.
2. There should be a proper flow of information. it should originate from the right place
and should be transmitted to the proper level of authority where decisions are to be
made. Complete and consistent information should flow in the systematic manner.
3. The information required for a decision should be anticipated so that all the relevant
data are gathered and made available at the decision point.
4. Information should be communicated in proper form so that management may study it
and use it in decision making without any difficulty.
5. The system should ensure furnishing of the information at the proper time, i.e., neither
too late nor too late.
6. System should be flexible to meet the requirement of user.
7. There should be a procedure for measuring and matching the cost of obtaining
information and the value to be obtained from its user cost benefit analysis.

8. Report should be presented in simple, unambiguous and clear language- simplicity.

The reader should be able to understand the report without any difficulty.
9. There should be a consistency in the presentation of reports. The comparability of
reports will be possible only if they are consistent.

Applications of MIS
With computers being as ubiquitous as they are today, there's hardly any large business that does
not rely extensively on their IT systems.
However, there are several specific fields in which MIS has become invaluable.

Strategy Support
While computers cannot create business strategies by themselves they can assist management in
understanding the effects of their strategies, and help enable effective decision-making.
MIS systems can be used to transform data into information useful for decision making.
Computers can provide financial statements and performance reports to assist in the planning,
monitoring and implementation of strategy.
MIS systems provide a valuable function in that they can collate into coherent reports
unmanageable volumes of data that would otherwise be broadly useless to decision makers. By
studying these reports decision-makers can identify patterns and trends that would have remained
unseen if the raw data were consulted manually.
MIS systems can also use these raw data to run simulations hypothetical scenarios that answer
a range of what if questions regarding alterations in strategy. For instance, MIS systems can
provide predictions about the effect on sales that an alteration in price would have on a product.
These Decision Support Systems (DSS) enable more informed decision making within an
enterprise than would be possible without MIS systems.

Data Processing
Not only do MIS systems allow for the collation of vast amounts of business data, but they also
provide a valuable time saving benefit to the workforce. Where in the past business information
had to be manually processed for filing and analysis it can now be entered quickly and easily
onto a computer by a data processor, allowing for faster decision making and quicker reflexes for
the enterprise as a whole.

Management by Objectives

While MIS systems are extremely useful in generating statistical reports and data analysis they
can also be of use as a Management by Objectives (MBO) tool.
MBO is a management process by which managers and subordinates agree upon a series of
objectives for the subordinate to attempt to achieve within a set time frame. Objectives are set
using the SMART ratio: that is, objectives should be Specific, Measurable, Agreed, Realistic and
Time-Specific.
The aim of these objectives is to provide a set of key performance indicators by which an
enterprise can judge the performance of an employee or project. The success of any MBO
objective depends upon the continuous tracking of progress.
In tracking this performance it can be extremely useful to make use of an MIS system. Since all
SMART objectives are by definition measurable they can be tracked through the generation of
management reports to be analyzed by decision-makers.

DEFINITIONS OF MIS
Dictionary:management information system
n. (Abbr. MIS)
A computer system designed to help managers plan and direct business and organizational
operations.
Accounting Dictionary:
MANAGEMENT INFORMATION SYSTEM (MIS)
Computer-based or manual system that transforms data into information useful in the support of
decision making. MIS can be classified as performing three functions:
(1) To generate reports-for example, financial statements, inventory status reports, or
performance reports needed for routine or non-routine purposes.
(2) To answer what-if questions asked by management. For example, questions such as "What
would happen to cash flow if the company changes its credit term for its customers?" can be
answered by MIS. This type of MIS can be called Simulation.
(3) To support decision making. This type of MIS is appropriately called Decision Support
System (DSS). DSS attempts to integrate the decision maker, the data base, and the quantitative
models being used.
Business Encyclopedia:

MANAGEMENT INFORMATION SYSTEMS

Before one can explain management information systems, the terms systems, information,
andmanagement must briefly be defined. A system is a combination or arrangement of parts to
form an integrated whole. A system includes an orderly arrangement according to some common
principles or rules. A system is a plan or method of doing something.
The study of systems is not new. The Egyptian architects who built the pyramids relied on a
system of measurements for construction of the pyramids. Phoenician astronomers studied the
system of the stars and predicted future star positions. The development of a set of standards and
procedures, or even a theory of the universe, is as old as history itself. People have always sought
to find relationships for what is seen or heard or thought about.
A system is a scientific method of inquiry, that is, observation, the formulation of an idea, the
testing of that idea, and the application of the results. The scientific method of problem solving is
systems analysis in its broadest sense. Data are facts and figures. However, data have no value
until they are compiled into a system and can provide information for decision making.
Information is what is used in the act of informing or the state of being informed. Information
includes knowledge acquired by some means. In the 1960s and 70s, it became necessary to
formalize an educational approach to systems for business so that individuals and work groups
and businesses who crossed boundaries in the various operations of business could have
appropriate information. Technical developments in computers and data processing and new
theories of systems analysis made it possible to computerize systems. Much of this
computerization of systems was an out growth of basic research by the federal government.
Management is usually defined as planning, organizing, directing, and controlling the business
operation. This definition, which evolved from the work of Henri Fayol in the early 1900s,
defines what a manager does, but it is probably more appropriate to define what management is
rather than what management does. Management is the process of allocating an organization's
inputs, including human and economic resources, by planning, organizing, directing, and
controlling for the purpose of producing goods or services desired by customers so that
organizational objectives are accomplished. If management has knowledge of the planning,
organizing, directing, and controlling of the business, its decisions can be made on the basis of
facts, and decisions are more accurate and timely as a result.
Management information systems are those systems that allow managers to make decisions for
the successful operation of businesses. Management information systems consist of computer
resources, people, and procedures used in the modern business enterprise. The term MIS stands
for management information systems. MIS also refers to the organization that develops and
maintains most or all of the computer systems in the enterprise so that managers can make
decisions. The goal of the MIS organization is to deliver information systems to the various
levels of corporate managers. MIS professionals create and support the computer system
throughout the company. Trained and educated to work with corporate computer systems, these
professionals are responsible in some way for nearly all of the computers, from the
largest mainframe to the desktop and portable PCs.

BACKGROUND ON MIS
Management information systems do not have to be computerized, but with today's large,
multinational corporations, computerization is a must for a business to be successful. However,
management information systems began with simple manual systems such as customer databases
on index cards. As early as 1642, the French mathematician and philosopher Blaise
Pascal invented the first mechanical adding machine so that figures could be added to provide
information. Almost two hundred years later, Charles Babbage, a professor of mathematics at
Cambridge University in England, wanted to make a machine that would compute mathematical
tables. He attempted to build a computing machine during the 1880s. He failed because his ideas
were beyond his technical capabilities, not because the idea was flawed. Babbage is often called
the father of the computer. With the advent of the computer, management information systems
became automated.
In the late 1890s, because of the efforts of Herman Hollerith, who created a punch-card system
totabulate the data for the 1890 census, it was possible to begin to provide data-processing
equipment. The punch card developed by Hollerith was later used to form a company to provide
data-processing equipment. This company evolved into International Business Machines (IBM).
Mainframe computers were used for management information systems from the 1940s, 50s, 60s,
and up until the 1970s. In the 1970s, personal computers were first built by hobbyists. Then
Apple computer developed one of the first practical personal computers. In the early 1980s, IBM
developed its PC, and since then, the personal computer industry has mush roomed. Almost
every management information system revolves around some kind of computer hardware and
software.
Management information systems are be coming more important, and MIS personnel are more
visible than in the 1960s and 1970s, when they were hidden away from the rest of the company
and performed tasks behind closed doors. So remote were some MIS personnel from the
operations of the business that they did not even know what products their companies made. This
has changed because the need for an effective management information system is of primary
concern to the business organization. Managers use MIS operations for all phases of
management, including planning, organizing, directing, and controlling.

Role of MIS with Information Technology

Competing With IT
Role of MIS :- MIS is the networking of information that supports management decision
making. The role of MIS in business is to identify the information needs at different level of
management and prepare a system to satisfy those needs satisfactorily.

Strategic advantage with MIS :- Strategy is defined as the determination of the basic long
term objectives and goals of an enterprise and the formulation of plans and the acquisition,
allocation and utilization of resources necessary to accomplish the goals.
Management through decision making is a common feature to all the organization. The

management consists of group of people who are places in an organization at various levels
at assigned task, job and responsibility to achieve the goals. The MIS should acknowledge
the problem and difficulties in various methods of the data gathering and their sources in
the organization. Also while attempting to achieve the best design of MIS there is a conflict
between the cost and benefit arises. This can be solved by applying the value of
information.

Competitive Strategy Concept :The strategic role of information system involves using it to develop products, services and
capabilities that give a company major advantage over the competitive forces it faces in the
global marketplace. This creates strategic information system that support or shape the
competitive position and strategies of business enterprises. So strategic information is one
that helps an organization to gain a competitive advantage, reduce a competitive advantage
or met other strategic enterprises objectives.
Forces driving industry competition :
i) Threats of Entry (New Entrants)
ii) Suppliers ( Bargaining Power)
iii) Buyers (Bargaining Power)
iv) Substitute Products
v) Intensity of rivalry among the competitors.
Competitive Strategies :
a. Cost Leadership strategies
b. Differentiation Strategies
c. Innovation Strategy
d. Growth Strategy
e. Alliance Strategy
Other Strategies :
1. Improving Business Processes
2. Promoting Business Promotion
3. Lock in Customers and suppliers
4. Creating Switching Cost
5. Raising Barriers to entry
6. Leverage investment in Information Technology
7. Developing a Strategic Information Base

Using IT for Strategies :The basic strategies in the business use of information as a resource are :
1) Lower Cost
i) Use IT for reducing cost
ii) Use IT to lower the cost of customer and suppliers
2) Differentiation
i) Develop new IT features to differentiate product and services
ii) Use IT features to reduce differentiation advantage of competitors.

iii) To focus product and services at selected market niche.

3) Innovate
i) Create new product and services that include IT components
ii) Develop unique new market
iii) Cut cost, improving quality, efficiency, customer service etc.
4) Promote Growth
i) Use IT for regional and global level expansion
ii) To diversify and integrate into other product and services
5) Develop Alliances
i) Virtual organization of Business partners
Develop inter expertis

IMPLICATIONS OF THE ORGANIZATIONAL STRUCTURE FOR MIS

Concepts:
Hierarchy of authority
Specialization
Formalization
Centralization
Modification of the basic model

 Information model of organization

Organizational culture
Organizational power
Organizational growth cycle
Goal displacement
Organizational learning
Project model of organizational change
Case for stable system
Systems that promote organizational change
Organizations as socio-technical systems