MBA Batch 11

Management
Information systems
Lecture notes for module I
Abstract
This document starts off with the introduction to basics concepts of MIS. We also
discuss on the evolution and significance of information systems. We shall try to
understand the components and types of information systems.
Balakrishnan Unny Raghavan
3/20/2014

Management Information systems 2014

CONTENTS
Why should I learn about Management Information System (MIS)? ..................................................................... 3
Introduction ............................................................................................................................................................ 3
Data and information ......................................................................................................................................... 3
System ................................................................................................................................................................ 3
Information system ................................................................................................................................................ 3
Relevence of information system in an orgnaization ............................................................................................. 4
Components of IS ................................................................................................................................................... 5
Types of IS ............................................................................................................................................................... 5
Operational support systems ............................................................................................................................. 6
Management support systems ........................................................................................................................... 6
Specialist systems ............................................................................................................................................... 7
Additional reading .................................................................................................................................................. 7

Management Information systems 2014

WHY
SHOULD
I
LEARN
ABOUT
MANAGEMENT INFORMATION SYSTEM
(MIS)?
Before we start to understand MIS, we need to
answer a thorny question.

structure that consists of interrelated and

interdependent components. Every system has
input transformation, output and feedback. The
input is transformed into the output and the
feedback from the output then controls the input.

I am not planning for a career in IT, so why should

I study MIS?
The answer to this question resides in the way
information is treated in the modern business
environment. Information is considered as a vital
resource for the existence of any organization.
Firms are going to great depths not only to collect
data, but also are trying to find new ways to utilize
the data / information. The study of MIS provides
the modern manager with a greater understanding
about the way in which the organizations manage
their information resource. Every part of the
organization is covered with Information Systems
that help the employees in their daily tasks. Hence
the study of information systems is vital for any
management student.

INTRODUCTION
Before we start the discussion on management
information systems, we need to understand few
terms.

DATA AND INFORMATION

In crude words data is defined as the collection
raw facts and figures and information is often
referred to as processed data. Extending this
definition information can be considered as data
that is transformed or modified for a specific
purpose. In an organization, data is transformed to
information for a specific objective which can be
simple or complex. Fundamentally information is
created from data to assist the employees perform
certain tasks.

SYSTEM
There is a conception among many that system
means a computer, however this is incorrect.
System can be defined as an organized, purposeful

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Figure 1: Representation of a system

INFORMATION SYSTEM
Based on prior descriptions, let us try to
understand the term information system.
Information system can be defined as the
collection of people, processes and technology
that used to retrieve, transform and disseminate
information in an organization. The term
technology covers the hardware, software,
networks and data resources. In other words,
information system is not just a piece of software.
Organizations that are in the process of creating an
information system for retrieving, transforming
and disseminating information must decide on the
following.
For retrieval stage
1.
2.
3.

What to collect?
Where the data should be collected from?
How should it be collected?

For transformation stage

1.
2.
3.

What is the desired output?

How to modify the data?
Who is going to modify the data?

And for dissemination stage

1.
2.
3.

Whom to share it with?

Do we need to protect information?
How do we share the information?

Though the technology may be a required at each

of the above stages, people and process also play a
pivotal role in the information system.

Management Information systems 2014

RELEVENCE OF INFORMATION SYSTEM
IN AN ORGNAIZATION
As discussed information systems (IS) have
become a vital part of any organization regardless
to their size of nature of business. IS has the
following 3 major roles within an organization
1.
2.
3.

Support
business
processes
and
operations
Support decision making
Support strategies for competitive
advantage

Figure 3: Trends of IS

Figure 2: Role of IS

The primary role of IS within an organization is to

support business processes and operations. Taking
the example of core banking system used in a
bank, the daily operations will come to a grinding
stop if this system where to fail. With the advent
of technology, many organizations have replaced
their manual systems with IS to achieve speed,
efficiency and accuracy.

Based on trends of IS, it is futile to consider

thinking of IS projects as merely technology
projects. IS projects have moved into the realm of
business projects.
Now organizations are investing in IS for various
reasons which include the following
1.
2.
3.

Supporting decision making has been the natural

progression of IS, wherein advanced systems are
developed to assist the management in making
decisions that are based on information that is
timely, accurate and usable.
Lately IS has also donned the role of supporting
the competitive strategies of organizations. Firms
and developing IS systems to gain advantage over
its competitors. The finest example that comes to
mind is Dell, using its e-business system to gain
advantage over its rivals.
This evolution of IS can be understood by taking a
look at the following figure

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4.
5.
6.

To achieve operational excellence

To introduce new products, services and
business models
To provide a better experience of their
customers and understand their needs
better
To improve their decision making
To create a competitive advantage
Survival; organizations late to adopt
technologies often find themselves in a
situation where in they are chasing their
rivals in order to keep their company
afloat

Thus information systems have become the

cornerstone for any business plan. To achieve any
advantage over their competitions, organizations
are turning to their information systems.

Management Information systems 2014

COMPONENTS OF IS

Figure 4: Components of IS

The above diagram depicts the various

components of an information system. Starting
with inner core of an IS, we have the input,
processing and output of information. These are
critical components of any IS, as they are
responsible for collecting, transforming and
disseminating the information. The storage of
data resources is also vital, as the data /
information must be stored to ensure that it can
be utilized by the organization.
Another vital component is the control of the
system performance. Here is where the IS team of
an organization comes into picture. IS team is
responsible for controlling, monitoring and
management of the various technology assets
used for input, processing and output of
information resources. Controlling deals with
ensuring that the access to the technology assets
is provided to authorized members of the
organization. Monitoring deals with ensuring the
operational conditions of the technology assets,
which means the IS team must ensure that they
are available for use on a day-to-day basis.
Management deals with activities for governing
the technology assets. Thus the IS team are a vital
component of any information system.
For the IS to be completely operational, resources
are required. Without the resources the other
components will fail to function.
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People Resources
IS Specialists- system analysts, s/w
developers, system operators
End Users- anyone who use IS
Hardware Resources
Machinescomputers,
monitor,
magnetic disk drivers, printers, scanners
Media- magnetic tape, optical disks,
plastic cards, hard copies
Software resources
Programs,
Procedures- data entry procedure, error
correction procedure, functionality
Data Resources
Product descriptions, customer records,
employee files, inventory DB
Network Resources
Communication media, processors,
network access & control s/w
Information Products
Management reports, biz docs,
graphical display, printed reports
Table 1: Resources of IS

All the above mentioned components have to

function together in unison for the smooth
functioning of the IS.

TYPES OF IS
IS systems are broadly classified on the basis of
their use into the following 3 major categories.

Operational
support systems

Management
support systems

Specialist
systems

Supports the
business
operations

Supports
that decision
making of
management

Specialized
use

Figure 5: Type of IS

Management Information systems 2014

OPERATIONAL SUPPORT SYSTEMS

MANAGEMENT SUPPORT SYSTEMS

Operational support systems (OSS) as the name

suggests assist the employees of an organizations
to execute the day to day activities such as;

The modern day managers have to make decisions

that may profoundly affect the organizations and
managers are looking at the information systems
that can assist them.

1.
2.
3.

Process business transactions

Control business processes
Support collaboration and communication

The OSS can be broadly classified into the

following categories.

Enterprise
collaboration
system

Management
Support
Systems
provide
information and support for effective decision
making by managers. The management support
systems are broadly classified into the following.

Transaction
processing
system

Management
information
system

OSS

MSS
Process control
system

Executive
information
system

Decision support
system

Figure 6: Types of OSS

Figure 7: Types of MSS

The transaction processing systems record and

process the business transactions of an
organization.
Business transactions may be
anything from a simple sales transaction to
complex transactions that involve multiple
entities. Examples of transaction processing
systems are sales processing, inventory systems
and accounting systems.

Management information systems provide the

information support to management. The Reports
and Displays assist the managers to gain an
understanding of the current state of the
organization.

Process control systems control and monitor the

business processes. The business processes may
include people, machines and detailed process.

Decision support systems provide the Interactive

and ad hoc support to the management to take
effective decisions. Modern day DSS have the
capability to interpret the information based on
predefined business rules.

The current business environment is built on

collaborative working. There are no more
individual projects, employees have to work
together to achieve successes. Enterprise
collaboration systems help team and workgroup
communicate better. Email, video conferencing
can be considered as collaboration system.

Executive information systems (EIS) are systems

that are designed to provide the executives with
relevant and timely information. Unlike the
management information systems the EIS are
designed to provide information not only about
the organization about but also provide
information from outside the organization.

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Management Information systems 2014

SPECIALIST SYSTEMS

Expert
systems

Functional
Business
Systems

Specialist
system

Knowledge
Management
Systems

Strategic
Information
Systems

Expert Systems provide expert advice to the

management and they are designed to make
complex calculations. Modern day systems are
built to be intelligent and they can reason and
provide the information to the management.
Knowledge Management Systems support
creation, organization, & dissemination of business
knowledge throughout the organization.
Strategic Information Systems help get a strategic
advantage over customer.
Functional Business Systems focus on operational
and managerial applications of basic business
functions.

ADDITIONAL READING
1.

Chapter 1 and 2- Management

Information systems, James A OBrien and
George M Marakas.

2.

Chapter 1 and 2 - Efraim Turban, Dorothy

Leidner, Ephraim McLean and James
Wetherbe, Information Technology for
Management
Transforming
Organizations in the Digital Economy.

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