Effectiveness of Management Information System in Improving The Performance of Punjab National Bank (PNB)

International Journal of Business and Management Tomorrow
Vol. 2 No. 5
Effectiveness of Management Information System in

Improving the Performance of Punjab National Bank
(PNB)
Mr. Suyash Mishra*, Research Scholar, (U.G.C-JRF), Department of Management Studies, Central University
of Haryana
Mr. Rishi Kant, Assistant Professor, Department of Management Studies, Futura Institute of Management
Studies
Abstract
A continual stream of information technology innovation is transforming the traditional business world .Old
systems are being creatively destroyed and entirely new system are taking place. The importance of effective
Management Information System for maintaining customer bases for strategic planning is discussed in this
paper. Management Information System being the pivots of financial institutions facilitates the solution to the
banks for operations and customer base. The main part of the banking system resolves around them. Now in the
present era, management information system works as a catalyst that accelerates the development and growth.
Thus the need to evaluate the effectiveness of these systems is priority issue. The purpose of this study is to
evaluate the effectiveness of Management Information System with respect to the performance of Punjab
National Bank. Since banking is considered as an integral part of peoples life, this study is of great importance
for knowing the customers perception towards various dimensions.
Keywords: Technology, Innovation, Banking, Customer.
1. Introduction
The field of management information system tries to achieve this broader information system literacy.MIS deal
with behavioral issues as well as technical issues surrounding the development, use and impact of information
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systems used by managers and employees in the firm. Information systems are an integral part of organizations.
Indeed for some companies such as credit reporting firms, without an information system there would be no
business. The key elements of an organization are its people, structure, business processes, politics and culture.
It is said that without information, it is tough to make the accurate decisions and without proper information
systems, it is not possible to acquire the correct information. The term Management information system also
designates a specific category of information systems serving middle management. MIS provide middle
managers with reports on the organizations current performance. This information is used to monitor and
control the business and predict future performance. MIS summarize and report on the companys basic
operations using data supplied by transaction processing systems. MIS serve managers primarily interested in
weekly, monthly and yearly results, although some MIS enable managers to drill down to see daily or hourly
data if required. MIS generally provide answers to routine questions that have been specified in advance and
have a predefined procedure for answering them. Decision support system (DSS) support non-routine decision
making for middle management. They focus on problems that are unique and rapidly changing, for which the
procedure for arriving at a solution may not be fully predefined in advance.
PNB is considered for this study because PNB has continued to retain its position amongst the nationalized
banks. PNB has remained fully committed to its guiding principles of sound and prudent banking. Banks always
looked at technology as a key facilitator to provide better customer service and ensured that its IT strategy
follows the Business strategy so as to arrive at the Best Fit. The bank has made rapid strides in this direction.
Towards development of cost effective alternative channels of delivery, the bank with 5050 ATMs has the
largest ATM network amongst Nationalized Banks.
2. Review of Literature
A number of studies have been made to analyze the importance of management information system in banks.
Sunil Kumar (2008) explores the relationship between Technical Efficiency (TE) and profitability in the Indian
public sector banking industry. The technique of Data Envelopment Analysis (DEA) has been utilized to
compute the TE score for each bank in the year 2005. The mean level of TE for the industry is found to be 88.5
percent. This implies that public sector banks can produce 1.13 times as much output from the same inputs, if
they operate at efficiency frontier. In 20 inefficient banks, the technical inefficiency ranges from 2.6 percent to
36.8 percent. Both Andhra bank and Corporation Bank appear as an ideal benchmark for the laggards on the
efficiency and profitability dimensions of performance evaluation.
Z Irani , A.M. Sharif , P.E.D. Love (2007) seeks to explore the human and organizational dynamics associated
with knowledge and technology evaluation within a manufacturing organization . Inductively, showing the
propagation of knowledge and learning when set against a backdrop of information systems evaluation. The
rationale for exploring knowledge and information systems evaluation in manufacturing is that through
empirically extrapolating explicit and tacit knowledge drivers, a knowledge map will emerge for others to use
during their technical evaluation.
Olugbode M, Elbeltagi I , Simmons M, Biss T (2008) attempts to evaluate the effect of information system on
the performance as well as profitability of a firm using a case of Beale and Cole Company. A thorough analysis
of the operational systems was carried out covering both the manual systems and those supported by its
computerized accounting system . A number of beneficial changes were made, including the implementing of a
major new business system replacing the old accounting system.
Mamoun N. Akroush , Fahed S. Khatib (2009) examines the relationship between services quality dimensions
( functional and technical ) and banks performance assessed based on financial performance and customer
indicators . A quantitative methodology was employed to test a model of service quality which was developed
for the purpose of this study. The research findings indicate that the service quality dimensions (functional and
technical) have positively and significantly affected banks performance assessed based on financial performance
and customer indicators.
Tarawneh (2006) found that the bank with higher total capital, deposits, credit or total asset does not always
mean that has better profitability performance. Financial performance of the banks was strongly and positively
influenced by the operational efficiency and asset management, in addition to the bank size.
Sagar R. Dave , Rajesh Bhatt (2008) , evaluates the significance of intangible aspects as a tool for performance
measurement in Indian Banking Sector . Panel data spread over ten years from 1997 to 2006 and 19 indicators
of a representative Indian bank, namely Bank of Baroda, are used for the purpose. The importance for the
measurement of intangible assets and integration of contingencies in performance evaluation is discussed
initially. Being a part of service sector, long term strategic planning in a bank need to concentrate on these.
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Das et al. (2005), examined the output oriented technical efficiency , cost efficiency, revenue maximizing
efficiency and profit efficiency of Indian banks for the period 1997-2003. Four inputs were considered for their
study-borrowed fund, number of employees, fixed asset and equity. Only those banks which had at least three
branches during the entire study period were included in the study. The result shown that the Indian banks are
still not much differentiated if one considers input or output oriented technical efficiency or cost efficiency.
However, they differ sharply if one considers revenue and profit efficiencies for performance evaluation.
3. Need of Management Information System (MIS) in Punjab National

Bank (PNB)
The entire banking sector has undergone a restructuring during recent years as a result of innovation in financial
reforms. The arrival of foreign and private banks with the technology based services forced Public Sector banks
like PNB to follow the same by going in for the modern technologies so as to meet up the threat of competition
and hold their customer base. The technology that allows the bank to do so is clearly that of Management
Information System. As Information is inevitable for organizational decisions.
Significance of MIS
The MIS is very significant for a bank. In Punjab national Bank, there is a great role of Management
Information system in PNB as it provides accurate information related to customer requirement and data
gathering and processing. It helps in many ways to the Bank for the better result and customer satisfaction. This
research paper considers different dimensions to study the customer satisfaction as bank is using very concrete
information system to provide the best result to its customers and to compete in the market. Because Private and
Foreign Banks are good enough to provide the best technological support to its customers.
4. Objective of the Study
To analyze the response time of the services and complaints, provided to the customers by PNB.
To find out the reliability and convenience of the customer while doing transactions and using the banking
system.
To find out different factors which has encouraged or discouraged to the customer for banking with PNB.
5. Research Methodology
To obtain the data for this study a survey instrument was designed. The present study is empirical, descriptive
and analytical in nature based on primary and secondary data. To collect primary data, a well structured
questionnaire was distributed with close-ended questions. The survey was conducted in Lucknow (U.P.) among
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152 customer of Punjab National bank (This study is based on 200 customers of PNB out of which 152
questionnaires were relevant for the study.). The study was conducted in the Month of January to April in 2012.
The respondents were asked to indicate the degree of agreement / disagreement on a five point Likert type scale
that ranged from strongly agree to strongly disagree (Strongly agree , agree , Neither agree nor disagree ,
disagree and strongly disagree ). The survey included multiple item measures for each of the five dimensions of
perception of performance. Percentage and Weighted Average Score method was applied. The validity of
constructs was assessed by use of factor analysis. The data was analyzed using Statistical Package for the Social
Sciences (SPSS). The paper is also based on analysis and interpretation of the secondary sources of information
i.e. research report, Central government authentic reports and documents, reports by world level institutions and
other relevant publications and their findings.
6. Results and Discussions

The table-1 represents the demographic profile of the respondents. All the respondents are the customers of PNB
taken for the study. The demographic profile considered Age , Gender , Marital Status , Education , Occupation
and Income . The previous studies on banking have shown that demographic profile of the respondents to be one
of the factors that affect their perceptions towards various dimensions of services provided by bank. It is clear
from the table -1 that around 44% male and 55 % female are taken for the study and study also shown that
respondents of the age 50+ were highly dissatisfied with the services provided by PNB.
The table-2 shown the 16 variable under the four dimensions of the services and it is clear from the table-2 that
the respondents highly agreed that the most important factors which influenced them to adopt PNB services
were - satisfaction with the way the bank treats them as a customers, satisfaction with the ATM services & bank
branches and grievance with respect to the service of the bank. The weighted average score for these services
are 1.375%, 0.763% and 0.757 % respectively.
6.1 Factor Analysis

To find the underlying constructs and investigate the relationship among the variables which were supposed to
determine efficiency of management information system for the better performance of Punjab National Bank,
factor analysis was applied. After literature review, 16 variables of the four dimensions were selected. To test
the sampling adequacy, Kaiser-Meyer-Olkin measure of sampling adequacy was calculated and it was 0.777. It
indicates that sample is good enough for sampling. The overall significance of correlation matrix was tested
with Bartlett test of sphericity (Chi square 781.417 and significant at 0.00). This supports the validity of
applying the factor analysis. For extracting variables, principle component analysis was employed and varimax
rotation with Kaiser Normalization was also applied. The variable whose communalities were greater than 0.50
were retained. The factors with Eigen values greater than one were considered. All the 16 variables had their
communalities greater than 0.50 and were retained for the analysis. Table -3 gives the communalities of the
variables and also depicted in chart-1. For the study, five factors having Eigen-value greater than one were
extracted .The Eigen- value of the five factors along with the cumulative percentage of the variance is shown in
the table- 4.
The percentage of the total variance which is used as an index to determine how well the factor solution
accounts for what the variables together represent was found to be 65.732%.Table-5 gives the factor loading of
the variables under each of the five extracted factors. Chart -2 depicts the eigen value and cumulative percentage
Factor one describes satisfaction with the services that has five measure. These measures are satisfaction with
the ATM Services and bank branches, easy to use while doing transaction, reports like mini-statements, quickly
solved problems and reference to the other. This is the most important factor explains 28.833 % of variance
before rotation.
Factor two covers grievance and banking system and has four measures. These measures are easy to accessible,
easy to learn, difficulty while operating and grievance , explains 12.157 % of variance before rotation. Factor
three refers websites and safety, explains accessibility of website and safety while doing transactions Factor
three explains 10.512 % of variance before rotation. Factor four refers for timely delivery and staff, explains
7.355 % of variance before rotation Factor five stands for appropriate reply for the complaints and explains
6.874 % of variance before rotation.
7. Conclusion
Study shows that among the varied dimensions , the customer are highly satisfied with the way bank treat with a
customer, ATM services , reports like mini-statement, accessibility of website and there is a requirement to
improve the speed of transaction, problem solving technique , and confidentiality of the customers , rest
variables are satisfactory .There is a need to guide the customers for using new electronic services which is
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provided by the bank and the customers are not aware about that like internet banking , mobile banking etc.
Public relation as a part of information system try to increase the trustworthiness of a bankers interactions by
appearing finely in a third- party editorial vehicle.MIS is one relations approach that aims to suggest action. Its
unique feature is the ability to target small segments of customer, to measure response to different offers and to
build customer database. The promising discipline and philosophy of management information system tries to
make all these essential work with one voice and in mutually reinforcing ways. In order to successfully utilize
the MIS, Public Sector Banks like PNB should use it as a strategic tool to stay ahead of their competitors.
Mr. Suyash Mishra*

Research Scholar, (U.G.C-JRF),
Department Of Management Studies,
Central University of Haryana,
Mahendergarh
Mr. Rishi Kant

Assistant Professor,
Department Of Management Studies,
Futura Institute of Management Studies,
Lucknow
References
Bhasker B. (2003), Electronic Commerce, Tata McGraw Hill , India.

Das Abhiman, Ashok Nag and Subhash Ray (2005).Liberalization, Ownership and Efficiency in Indian Banking: A Nonparametric
Analysis.Economic and Political Weekly , May 19,XL ,12
Devi P. Ambiga and Malavizhi V. (2010). Customers Perception of E-banking: Factor Analysis. The IUP Journal of Management
Research, IX, 6, 7-18.
Irani Z, Sharif A.M., Love P.E.D. (2007). Knowledge mapping for information systems evaluation in manufacturing. International
Journal of Production Research ,45, 11,2435-2457.
Kalakota R and Whinston (2002), Frontiers of E- Commerce, Person Publication
Mamoun N. Akroush , Fahed S. Khatib(2009).The impact of Service Quality Dimensions on Performance : An Empiri cal
Investigation of Jordans Commercials Banks. Journal of Accounting Business & Management, 16, 1, 22-44.
Olugbode M, Elbeltagi I, Simmons M, Biss T (2008), The Effective of Information Systems on Firm Performance and Profitability
Using a Case Study Approach. The Electronic Journal Information System Evaluation , 11, 1, 35-40.
Sagar R. Dave , Rajesh Bhatt (2008).Incorporating Intangible aspects in performance evaluation of Indian Banks. Social Sciences
Research Network, September 2008.
Sunil Kumar (2008). An Analysis of Efficiency Profitability Relationship in Indian Public Sector banks . Global Business Review, 9,
1, 115-129.
Tarawneh , Medhat (2006) .A comparison of financial performance in the Banking Sector :Some evidence from Omani Commercial
Banks International Research Journal of Finance and Economics , 3, 101-112.
Parameters
Age
Gender
Marital Status
Education
Occupation
Income
ISSN: 2249-9962
Tables
Table 1: Profile of the Respondents
Segmentation of the parameters Total
Less than 20
36
20-30
57
30-40
27
40-50
14
50+
18
Total
152
Male
68
Female
84
Total
152
Married
76
Unmarried
76
Total
152
Graduate
57
Post Graduate
48
Professional
12
Other
35
Total
152
Salaried
30
Self Employed
50
Student
63
Other
9
Total
152
Less than 1 Lakh
90
Rs. 1-2 Lakh
30
Rs. 2-3 Lakh
20
Rs. 3 Lakh and above
12
Total
152
May|2012
Percentage
23.6842
37.5
17.76316
9.210526
11.84211
100
44.73684
55.26316
100
50
50
100
37.5
31.578947
7.8947368
23.026316
100
19.736842
32.894737
41.447368
5.9260526
100
59.210526
19.736842
13.257895
7.8947368
100
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Dimensions
Response time of the
services and complaints
Reliability
Convenience
Complaints of the customer
Table 2 : Preference for the different variables

Variables
I am satisfied with the way the bank treats me as a customer.
Timely delivery of the services.
I am satisfied with the ATM services and bank branches
I get appropriate reply for my complaints from banks.
The bank website is accessible, when I need.
The banks never misuse personal information.
I feel safe in my transactions with my bank
My bank is fast to complete the transactions.
The system is easy to use while doing transactions.
The reports like mini - statement provided by bank are in a proper
manner.
The services are easy to accessible.
The banking system is easy to learn.
Difficulty while operating with the bank.
I do not have any grievance with respect to the service of the bank.
The bank quickly resolves my problems.
I shall give the reference of the bank to other people.
Table 3: Communalities
Variables
Timely delivery of the services.
I am satisfied with the ATM services and bank branches.
The bank website is accessible, when I need.
The bank never misuse personal information.
The reports like mini - statement provided by bank are in a proper manner.
Vol. 2 No. 5
SA
83
13
44
12
40
22
31
20
25
A
54
80
56
74
44
51
53
56
66
N
7
47
27
39
45
60
32
43
44
DA
5
9
22
22
17
15
33
19
13
SDA
3
3
3
3
6
4
3
14
4
WAS
1.375
0.599
0.763
0.434
0.625
0.474
0.5
0.322
0.625
41
57
27
24
0.717
22
15
53
44
35
57
73
75
36
58
53
38
35
41
29
27
31
19
10
16
29
15
21
20
12
5
5
8
12
18
0.546
0.52
0.678
0.757
0.513
0.632
Communalities
0.838
0.672
0.665
0.621
0.646
0.66
0.691
0.677
0.623
0.56
0.614
0.581
0.714
0.526
0.746
0.682
Extraction Method: Principal Analysis. Component Analysis

Table 4 :Total Variance Explained
Variables Initial Eigen Values % of Variance Cumulative %
F1
4.613
28.833
28.833
F2
1.945
12.157
40.99
F3
1.682
10.512
51.502
F4
1.177
7.355
58.857
F5
1.1
6.874
65.732
Extraction Method: Principal Analysis. Component Analysis
Table 5 : Rotated Component Matrix( Factor Loading >0.50)
Component
Variables
F1
F2
Timely delivery of the services .
I am satisfied with the ATM services and bank branches.
0.623
The bank website is accessible, when I need .
The banks never misuse personal information.
0.547
The reports like mini - statement provided by bank are in a proper manner. 0.69
0.632
0.729
0.624
0.649
0.844
0.814
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
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F3
F4
0.885
0.714
F5
0.696
0.664
0.714
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Vol. 2 No. 5
Graphs
Chart 1: Communalities of variables
0.9
0.838
0.8
0.672 0.665
0.7
0.66
0.621 0.646
0.746
0.714
0.691 0.677
0.623
0.614
0.56
0.6
0.682
0.581
0.526
0.5
0.4
0.3
0.2
0.1
0
Chart 2: Depicting Eigen Value and Cumulative Percentage

Initial Eigen Values
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
4.613
Initial Eigen Values
1.945
1.682
1.177
F1
F2
F3
F4
1.1
F5
Cumulative %
70
65.732
60
58.857
51.502
50
40.99
40
30
Cumulative %
28.833
20
10
0
F1
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F2
F3
May|2012
F4
F5
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International Journal of Business and Management Tomorrow