Module 1 Introduction to MIS

Management of Information System? A management information system, or MIS, is a computer-based system that optimizes the collection, transfer, and presentation of information throughout an organization by using an integrated structure of databases and information flow. A management information system (MIS) is a system or process that provides the information necessary to manage an organization effectively. MIS and the information it generates are generally considered essential components of prudent and reasonable business decisions. An MIS has been called a method, a function, an approach, a process, an organization, a system, and a subsystem. MIS Elements Management Functions o Planning o Controlling o Decision Making Information System Management Information

STEPS IN PLANNING 1. 2. 3. 4. 5. Selecting objectives Identifying activities required to achieve the stipulated objectives Describing the resources or skills, or both, necessary to perform the activities Defining the duration of each activity to be undertaken Determining the sequence of the activities

The MIS versus the Data Processing System Data processing systems, or DP systems, are concerned with transaction handling and record-keeping, usually for a particular functional area. Here are a few differences between an MIS and a DP system: 1. The integrated database of an MIS enables greater flexibility in meeting the information needs of management. 2. An MIS integrates the information flow between functional areas (accounting, marketing, inventory management, etc.), whereas DP systems tend to support a single functional area.

3. An MIS caters to the information needs of all levels of management, whereas DP systems focus on the clerical and operational levels. 4. Management's information needs are supported on a timelier basis with an MIS than they are with a DP system. An MIS, for example, has online inquiry capability for the immediate generation of reports, whereas a DP system usually produces only scheduled reports. Characteristics of Management Information Systems These are desirable characteristics of an MIS: 1. An MIS supports transaction handling and record keeping. 2. An MIS uses an integrated database and supports a variety of functional areas. 3. An MIS provides operational-, tactical-, and strategic-level managers with easy access to timely but, for the most, structured information. 4. An MIS is somewhat flexible and can be adapted to meet the changing information needs of the organization. 5. An MIS can boost system security by limiting access to authorized personnel. Main Types of Resources The manager manages five main types of resources: Personnel Material Machines (including facilities and energy) Money Information (including data) What Managers Do Despite the obvious differences that exist between management levels and between functional areas, all managers perform the same functions and play the same roles.

Management Functions. Early in this century, around 1914, the French management theorist Henri Fayol recognized that managers perform five major management functions. First, managers plan what they are to do. Then, they organize to meet the plan. Next, they staff their organization with the necessary resources. With the resources in place, they direct them to execute the plan. Finally, they control the resources keeping them on course. All managers, regardless of their level or functions area, perform these functions to some degree, although perhaps with varying emphasis. Managerial Roles. Within the past twenty-five years the idea of managerial roles has become more popular, Henry Mintzberg, a professor at McGill University in Canada, decide the Fayol's functions did not tell the whole story. He developed

a more detailed framework consisting of ten managerial roles that managers play, involving interpersonal, informational and decisional activities.

Management Skills A successful manager should possess many skills, but two stand out as being basic - communication and problem solving. Managers communicate with their subordinates, their superiors, other persons in other units of the firm, as well as with persons outside the firm. They also solve problems by making changes to the firm's operations so that the firm can achieve its objectives. Communication Skills. Managers receive and transmit information in both written and oral forms. Written communications include reports, letter, memos, electronic mail, and periodicals. Oral communications occur during meetings, while using the telephone and voice mail, when taking tours of facilities, and during business meals and social activities. Problem-Solving Skills. We define problem solving as all of the activities that lead to the solution of a problem.

MANAGEMENT KNOWLEDGE The term literacy has been used to describe two types of knowledge that are the key to use the computer. One kind of knowledge is computer literacy; the other is information literacy. Computer Literacy. The knowledge of the computer that is necessary to function in today's world is called computer literacy. This knowledge includes an understanding of computer terminology, a recognition of the strengths and weaknesses of the computer, an ability to use the computer (although not necessarily being a programmers), and so on. Information Literacy. In addition to understanding the computer, the modern manager should have information literacy. Information literacy consists of understanding how to use information at each step of the problem-solving process, where that information can be obtained, and how to share information with others. Information literacy is not dependent on computer literacy. A manager can be information literate but not computer literate. In fact, if one had to choose, information literacy is more important. Ideally, however, a manager should be both information literate and computer literate.

Characteristics of Information Timeliness: Information must reach the user in a timely manner, just when it is needed; not too early, because by the time it is used it would be out-of-date; not too late because the user will not be able to incorporate it into his/her decision making. Appropriateness: Information must be relevant to the person who is using it. It must be within the sphere of his/her activities so that it can be used to reduce uncertainty in his/her decision making. Accuracy: Accuracy costs. We don't always need 100% accurate information so long as we know the degree of accuracy it represents (eg: + or - 5%). (Remember the value of information). Conciseness: Information should always contain the minimum amount of detail that is appropriate for the user. Too much detail causes information overload. Understandability: The format and presentation of information are very important. Some people prefer tabular information, whereas others may need it in a graphical form. Also the use of colors enhances the understandability of what is presented.

THE EVOLUTION OF COMPUTER-BASED INFORMATION SYSTEMS The initial efforts to apply the computer in the business area focused on data. Then came an emphasis on information and decision support. Today, communication and consultation are receiving the most attention.

The Initial Focus on Data

During the first half of the twentieth century, when punched-are and keydriven bookkeeping machines were in their heydey, firms generally ignored the information needs of managers. This practice continued wit the first computers, since they were restricted to accounting applications.

The name given to these early computer-based accounting applications was electronic data processing (EDP). The term EDP is no longer popular, having been shortened to data processing (DP). We use the term accounting information system (AIS) to describe the system that processes the firm's data. The AIS produces some information as a byproduct of the accounting processes.

The New Focus on Information In 1964, a new generation of computing equipment was introduced that exerted a strong influence on the manner in which computers were employed. The new computers were the first to use silicon chip circuitry, and they offered opportunities for more processing power per dollar. The concept of using the computer as a management information system, or MIS, was promoted by the computer manufacturers as the justification for upgrading to new equipment. The MIS concept recognized that computer applications should be implemented for the primary purpose of producing management information. The concept was quickly adopted by many of the larger firms.

The road traveled by these pioneers was rocky. Actual accomplishments seldom matched those initially envisioned. There were several reasons for this shortfall: a general lack of computer literacy among users, a general lack of business literacy and an ignorance of the management role on the part of information specialists, computing equipment that was both expensive and limited by today's standards, and so on. But one error in particular characterized the early systems. They were too ambitious. Firms believed they could build giant information systems to support all managers. System designs snowballed, and the task became unmanageable. Some firms stuck it out, invested more resources, and eventually developed workable systems - although more modest in size than originally projected. Other firms decided to scrap the entire MIS idea and retreated to DP.

The Revised Focus on Decision Support While many watched from the sidelines as firms grappled with their giant MISs, some information scientists at the Massachusetts Institute of Technology (MIT) formulated a different approach. These scientists were Michael S. Scott Morton, G. Anthony Gorry, and Peter G. W. Keen, and their concept was named the decision support system (DSS). A DSS is an information-producing system aimed at a particular problem that a manager could be located anywhere in the organization - on any level and in any functional area.

For the first few years of the DSS era, there was a considerable argument concerning DSS and MIS. Did the DSS offer a new approach to computer use, and if so, how? These arguments were never really settled, but the issue does not seem to be as critical today as it once was.

The MIS is intended to provide problem-solving information to a group of managers in a general way, whereas the DSS is intended to support a single manager in a specific way, whereas the DSS is intended to support a single manager in a specific way. We regard the management information system (MIS) as an information-producing system that supports a group of managers who represent an organizational unit such as a management level or a functional area.

THE CURRENT FOCUS ON COMMUNICATION During the time that the DSS evolved, interest was also focused on another computer application - office automation (OA). OA facilitates communication and increases productivity among managers and office workers through the use of electronic devices.

OA got its start in 1964, when IBM announced its Magnetic Tape/Electric Typewriter (MT/ST) - a typewriter that could type words that had been recorded on magnetic tape. This automatic typing operation led to the OA application that is called word processing.

Office automation grew to include a wide variety of such applications as video conferencing, voice mail, electronic mail, electronic calendaring, facsimile transmission, and desktop publishing. We use the term virtual office to describe all of the office automation applications. All of these applications are intended to facilitate communication. The Potential Focus on Consultation There is a movement presently under way to apply artificial intelligence (AI) to business problems. The basic idea of AI is that the computer can be programmed to perform some of the same logical reasoning tasks as a human. A special class of AI, expert systems, is

receiving the most attention. An expert system is one that functions as a specialist in an area. For example, an expert system can provide some of the same assistance to a manager as would come from a management consultant. One limitation of an expert system is that it does not improve its intelligence over time. A way to overcome this limitation is to use neural networks that are electronic and mathematical analogs of the human brain. We use the term knowledge-based systems to represent all varieties of systems that apply artificial intelligence to problem solving.

The 1990s saw selected organizations invest heavily in knowledge-based systems, and dramatic results were reported. However, recent reports reveal that the accomplishments may not have been a dramatic as first thought. The future of knowledge-based systems remains unclear.