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MEANING OF MIS
M = management, I= information, S= system
Management
Management comprises the process and activity (planning, controlling and decision making) that
a manager does to utilize the resources of the organization in most efficient and effective manner
Information
It simply means processed data, ie data which is converted into meaningful and useful form for a
specific user.
System
It can be defined as a set of elements joined together for a common objective.
A group of interrelated components working together towards a common goal by accepting input
and producing output in an organized transaction process.
DEFINITION OF MIS
According to G B Davis, MIS is
And a database
In general we can divide the field of MIS into two broad approaches, ie technical and
behavioural.MIS is a hybrid product of these two approaches that makes it a socio-technical
system.
Technical Approach
Operation
research
Management
science
Socio-Technical System
Behavioral Approach
Sociology
MIS
Political science
Psychology
Computer
science
Technical Approach
Technical approach MIS emphasizes on mathematically based or systematic models to study
management information system as well as the hardware aspect of it. The major role player of
technical approach is computer science which provides ways of computation as well as how to
store large volume of data and its retrieval. Management science gives the concept of decision
support and the models for management practices. Operation research comprises how to
optimize the resources of the management.
Behavioral Approach
The major role player of this approach is sociology that focuses on the impact of MIS on groups,
organizations and society as a whole. Psychology is concerned with how each stake holder in
organization responses to the information system and cognitive models of human reasonings.
Political is concerned with what is the political scene/scenario in the country, what is the
manifesto of ruling party etc.
Concept of Information
Information is a critical resource in the operation and management of organizations. Timely
availability of relevant information is vital for effective performance of managerial functions
such as planning, organizing, leading, controling and decision making. An information system in
an organization is like the nervous system in the human body: it is the link that connects all the
organization's components together and provides for better operation and survival in a
competitive environment. Indeed, today's organizations run on information.
DEFINITION OF INFORMATION
According to Davis and Olson,` `information is data that has been processed into a form that is
meaningful to the recipient and is of real or perceived value in current or prospective actions or
decisions``
This implies that information is
Processed data
It has a form
It reduces uncertainty
Characteristics of Information
Promptness in availability and updation, Accuracy,
Precision, Unambiguous
Completeness, Impartiality, Validity, Reliability, Consistency, Mode and format of
representation, Exception based
Data versus Information
Data refers to raw, unevaluated facts, figures, symbols, objects, events, etc. Data may be a
collection of facts lying in storage, like a telephone directory or census records.
Data is raw material & unorganized facts that need to be processed.
When data are processed, organized, structured or presented in a given context so as to make
them useful, they are called information. The relation of data to information is that of raw
material to finished product.
Information is data that have been put into a meaningful and useful context and communicated to
a recipient who uses it to make decisions. Information involves the communication and reception
of intelligence or knowledge.
Data storage
Data
Processing
Information
TYPES OF INFORMATION
The information is differentiated mainly on behalf of their source of generating information and
types of decision taken by manager at different level
Environment Information
Government policies
Factors of production
Economic trends
Technological information
Sociological information
Political information
Competitive Information
Operational information
Operational decisions are taken by the lower level of management and the information
need is known as operational information which relates to the day-to-day operations like
daily or weekly sales, day-to-day cash position etc.
Tactical Information
This information relates to the middle level of managers. They requires information for
allocating resources and establishing control to implement the top level plans.
It is partly historic and partly current which uses both internal and external resources of
providing information
Strategic Information
It is retrieved not only from external source but to some extent internal resources are also
explored.
QUALITY OF INFORMATION
Quality is fitness for use or reliability of information. It is difficult to measure the exact quality
of information as the quality varies from situation to situations and users to users. If a user is
satisfied with the information he is currently provided with, the quality of information may be
rated high.
The quality of information can be classified into three categories such as
Time Related
Timeliness: information should be available when needed
Currency: the information should be up to date when needed
Frequency: the information should be available frequently as needed
Time period: the time period may be past, present and future as needed by the user.
Content Related
Accuracy: the information should be free from errors
These costs are due to collection, processing and storage of the information.
This means that we can measure the information value in monetary terms.
The value of information is calculated by the value of the change in the decision behavior
resulted by the information minus cost of obtaining the information.
VPI
= Information perfect
Summarizing
Data summarizing reduces the volume of data for transmission without affecting its essential
meaning. Classification is a formal way of summarization of data. Aggregation and statistics are
important form of summarization
Filtering
In this method organizations have systems to scan information at every level and controlling the
flow of information upward. Filtering is a technique that trims irrelevant information before it
reaches the managers at each level. Each level in the hierarchy functions as a filter station.
Inferences
Inferences are drawn usually from a large volume of data and such inferences are communicated
in place of the original data. The user gets only the inferences and does not know anything about
the original data. The quality of inference depends person`s ability to interpret the volume of data
in the context of the problem. Interpretation may be based on statistical analysis of data.
Message routing
In this method information is only distributed to those individuals or organizational units which
require the information for some action or decision.
CONCEPT OF SYSTEM
A system can be most simply defined as a group of interrelated or interacting elements forming a
unified whole.
DEFINITION
A system is a group of interrelated components working together towards a common goal by
accepting inputs and producing outputs in an organized transformation process.
All information systems use people, hardware, software, data and network resources to perform
input, processing, output, storage and control activities that transform data resources into
information products.
TYPES OF SYSTEM
Physical System
It is an orderly arrangement of interdependent ideas which may or may not have any
existence in the real world.
Some systems are often a part of a large system and they are known as sub- system.
Subsystems are interactive and dependent to each other and they work together to achieve
a common goal.
Super System
Super system is a large and complex system which may or may not have a number of
parts known as its subsystem.
Deterministic System
A deterministic system is one which the occurrence of all the events is certain.
In other words, it is a system which operates in accordance with predefined set of rules
and every step and order of their performance is known
Probabilistic system
It is one in which the occurrence of the event cannot be perfectly predicted and the result
of such system cannot be pre determined.
Temporary system
Temporary systems are those which are made to achieve certain objective or to perform
specific task.
Permanent system
Permanent systems are those systems which has relatively long time span.
Natural system
Natural systems are abound in nature and are God gifted or their existence is because of
the nature.
Man made system may be defined as a set of devices, procedures, people and operating
system designed to achieve a common goal.
Example business organization, industries etc
Adaptive system
A system that reacts to its environment in such a way as to improve its functioning,
achievement or probability of survival is called an adaptive system.
STRUCTURE OF MIS
Operating Elements
Decision Support
Management Activity
Organizational Function
OPERATING ELEMENTS OF AN INFORMATION SYSTEM
Hardware
Software
Database
Personnel
Procedures
Hardware
Input/output devices
Storage units
Communication devices.
Communication can be over fiber-optic cables or wireless networks.
Software
Software provides the interface between users and the information system. Software can
be divided into two generic types:
System software
Applications software
The system software comprises of the operating system, utility programs and special
purpose programs.
Data is stored in an organized and structured way to facilitate sharing and improve
availability to those who need it.
The physical existence of stored data is evidence by the physical storage media
(computer tapes, disk packs)used for secondary storage
Procedures
Three types of procedures are required for an MIS to operate effectively: user
instructions, instructions for input preparation and operating instructions for MIS
personnel who maintain the MIS.
Formal operating procedures are physical components because they exist in a physical
form such as manual or instruction booklet.
Personnel
The personnel in the MIS function include computer operators, programmers, systems
analysts and managers.
Human resource requirements should be assessed by considering both the present system
needs and the future system growth.
The quality of MIS personnel is a key factor in its effectiveness. An MIS manager needs a
combination of both managerial and technical skills.
PROCESSING FUNCTIONS
The major processing functions are
Process transactions
Produce reports
Process inquiries
MIS support for decision making can be classified into two parts
1. Structured, programmable decisions
2. Unstructured, nonprogrammable decisions
Structured, Programmable Decision
The information system requirements for structured decisions are clear and unambiguous
procedures for entering the required input data, validation procedures to ensure correct
and complete input, processing of the input using the decision logic, and output of the
programmed decision in a form that is useful for action.
Many highly structured decisions may be completely automated.
Examples of highly structured decisions are inventory reorder formulas and rules for
granting credit.
Unstructured, Nonprogrammable Decisions
The data requirements for unstructured decisions are not completely known in advance,
so data retrieval must allow for ad hoc retrieval requests
Interactive decision support systems with generalized inquiry and analysis capabilities are
appropriate information system support for unstructured decision making.
MIS Structure based on Management Activity
The structure of an information system can be classified in terms of hierarchy of
management planning and control activities
Hierarchy of Management activities
1. Strategic Planning
Definition of goals, policies, objectives and general guidelines for an organization.
2. Management control and tactical planning
Operational Control
This is a process of ensuring that the operational activities are carried out effectively and
efficiently.
A large
%
of
decisions
are
programmable
and
the
procedure used is quite stable.
Management Control
This system is required by managers of departments, profit centers to measure
performance, decision on control actions, formulate new decision rules and allocate
resources. Summary information is needed and it must be processed so that trends may be
observed, reasons for performance variations and solutions may be suggested.
The control process requires the following types of information
1. Planned performance To assist managers in finding problems and reviewing plans and
budgets. It projects the effect of current action.
2. Variance from planned performance This report shows performance and variations from
planned performance.
3. Problem analysis models to analyze data to provide input for decision making.
4. Decision models to analyze a problem situation and provide possible solutions.
5. Inquiry model to provide assistance to enquiries.
Strategic Planning
The purpose of strategic planning is to develop strategies by which an organization will
be able to achieve its objectives. These activities do not occur on a periodic basis. Data
required for strategic planning are generally for processed summarized data from a
variety of sources. Information system support can provide
Substantial aid to the process of strategic planning.
Evaluation of current capabilities based on internal data.
Internal projection of future capabilities by analyzing past data.
Fundamental market data on the industry and the competitors.
Databanks of public information regarding industry and competitors
MIS structure based on organizational functions
There are no standard classifications of functions but a typical set of functions in an
organization includes
Production
Sales & Marketing
Finance & Accounting
Logistics
Personnel
Information system
Top management can also be considered as a separate function. Each of these functions has
unique information needs and each requires information system support designed for it.
Sales & Marketing
The transactions involved in this subsystem are Sales order, promotion order, etc.
Operational activities include hiring and training of sales force,
day to day scheduling of sales and promotion effort, periodic analysis of sales volume by
region, product, customer, etc. Managerial control concerns comparison of overall
performance against planned. Strategic planning involves new markets and marketing
strategies.
Production
It includes planning, scheduling and operation of production facility, employment and
training of production personnel, quality control and inspection.
Transactions include production order, assembly order, finished parts tickets, scrap
tickets.
Operational control requires reports comparing actual performance to the production
schedule.
Management control requires summary report comparing oval planned performance to
standard performance.
Strategic planning includes alternative manufacturing approach and approach to
automation.
Logistics
Transaction process includes purchase, manufacturing and receiving report. Tickets for
inventory, shipping and orders.
Operational control includes past-due purchases, shipment, out of stock items.
Managerial control information consists of overall comparisons between planned and
actual inventory levels, costs of purchased items, stock outs etc
Strategic planning involves analysis of new distribution strategy, policies, etc.
Finance & Accounting
Transaction involves credit applications, sales, billings, payment vouchers, checks,
ledgers, stock transfer, etc.
Operations include daily error and exception reports, records of processing delays and
reports of unprocessed transactions.
Strategic planning involves a long run strategy to ensure adequate financing, a long range
tax accounting policy to minimize the impact of taxes
Personnel
Transactions involve documents describing employment requisition, job description,
training specifications, personnel data, hours worked, paycheck termination etc.
Operational control requires decision procedures for action such as hiring, training,
termination, changing pay rates etc
Management control is supported by reports and analyses showing the variances between
planned and actual performance of employees hired, cost of recruiting, distribution of
wages rates etc
Strategic planning is involved with evaluating alternative strategies for recruiting, salary,
and training, benefits to ensure that the organization obtains and retains personnel
necessary to achieve its objectives
Organizational Functions
The MIS structure has been described in terms of support for decision making,
management activity and organizational functions
These three approaches will now be synthesized into a management information system
structure.
We can divide the MIS structure into
(1) Conceptual structure
(2) Physical structure
The conceptual structure of an MIS is defined as a federation of functional subsystem,
each of which is divided into four information processing components:
Many individuals also have their own private informal information system. Primarily
through personal contact they maintain a flow of information which may be critical to
decision making but is available to them as individuals rather than as occupiers of a
formal position.
The phases in the SDLC provides a basis for management and control
Define segments of the flow of work which can be identified for managerial
purposes
Procedure development
Procedure development like manuals, instruction sheets, input forms, help screens etc can
take place concurrently with program development. Procedures should be written for all
personnel who have contact with the system. This includes the following
Primary user, secondary user, computer operating personnel, etc
Installation and operation stage
Conversion
Conversion to the new application begins after all programs and procedures have been
prepared and individually tested. Three major activities for actual conversion: acceptance
testing, file building, user training
Acceptance testing: testing of completed application and comparing it to the
specifications. It verifies to the user that the system meets performance criteria and
operational requirements.
File building: Refers to the collection and conversion to machine-readable form of all
new data required by the application. The data must be gathered, coded and entered into
the database.
User training: Proper user training is an important factor in overcoming user resistance to
new systems.
Operations and maintenance
When the system appears to be operating without difficultly it is turned over to the
information processing production function. Any subsequent changes in the application
are handled as maintenance. The maintenance of an application can be classified as
repairs or enhancements.
Post audit
a desirable part of SDLC is a review of the application after it has been in operation for a
period, such as a year. An audit team with representatives from user, development,
maintenance, operations reviews the operation, use, cost and benefits of the application.
Recommendations from post audit include specific recommendations for dropping,
repairing or enhancing an application.
Prototype approach
This approach is an experimental assurance in development of information system
applications. A small version of the system is designed and is made available to users for
experimentation. The users work with this quickly and inexpensively made prototype and
suggest modifications or changes to the prototype. Such modifications are incorporated
into the prototype after consideration of its feasibility.
Prototype is a working system developed to test the behavior of the new system.
Model of prototyping process
Identify the user`s basic information requirements
Develop the initial prototype system