MIS

MIS is an old management

tool
Role of MIS in an
Organisation
An MIS performs various roles in an organization,
namely:—
 Supports day-to-day business operations
 Supports managerial decision-making
 Supports strategic decision-making and
competitive advantage
 Optimizing operational cost
 Provide timely and accurate information
 Provide expert advice to the managers on
selected domains.
Role of MIS in an
Organisation
MIS provides information to all levels of management for the following purposes
 To define the objectives of the organization
 To formulate strategies and policies to achieve the objectives set by the
management
 To report the organization performance to tax authorities, shareholders, regulatory
authorities and other stakeholders such as suppliers and customers, etc.
 To prepare future plans for short and long term basis
 To exercise day-to-day control on various operations in the different functional
areas in the organization
 To allocate different type of resources to different functional areas
 To allow management by exception
 To develop database of business partners and to devise procedures to deal with
them

To develop the training tools for the new recruits in the organization at all levels.
Features of MIS
 Management oriented. MIS starts from an appraisal of management
needs and overall business objectives. It provides for information
needs at all levels of management.
 Sub-system. MIS is actually an amalgamation of several sub-
systems, such that each of them shares the goal of the MIS and of the
organisation.
 Integration. Sub-systems are to be integrated, so that the activities of
each are inter-related with those of the others. Integration makes
information processing more efficient by reducing both intermediate
processing and the incidence of independent generation of the same
data by multiple departments. An even more important benefit of
integration is that it provides more timely, complete and relevant
information. Total information of sub-systems is neither achievable
nor desirable. A substantial degree of integration is required for an
effective MIS.
 Common data flows. Common input, processing and output should
be used to the extent possible. This helps in reducing duplication of
same information as well as simplifies operations.
 Common Data Base. Data Base is ‘super-file’ which consolidates
and integrates data record formerly stored in many data files. It should
be integrated to allow different users to access it commonly.
Features of MIS
 Information source and reporting format. MIS combines information from
multiple data resources into a structured report that enables managers to
monitor and organise the organisation in a better way. Provides Summary
information of the organisation. The level of detailing depends on the situation
and to which level, the reporting is being made.
 MIS is useful to structured decisions. As MIS focuses generally on internal
information and the input to MIS is the internal data, MIS is more useful mainly
for making structured decisions. Structured decisions are those decisions
which are predictable in nature and are pre-planned and pre-specified.
 Relevant information. A MIS should provide only relevant information.
Determining what information is relevant for a particular manager, in a
particular situation, is a difficult job which is to be carefully considered by
systems designers during the process of MIS designing and maintaining.
 Computerised. Although it is possible to have a MIS without using a
computer, however, the use of computers increases the efficiency of the MIS
as well as makes it more accurate, consistent and cost-efficient.
 Flexible. MIS provides alternative ways of data processing and information
reporting, which may vary from situation to situation and time to time. MIS is
enough flexible to absorb the inevitable changes in the information needs of
the business, while acquiring information as well as while reporting.
Limitations of MIS
 MIS cannot replace managerial judgement in decision making
and human intention in strategic activities. Thus, MIS is not a
substitution to managerial activities, and instead, an important
tool in managerial activities.
 MIS has to be application specific i.e., customized. It is not
possible to have a generalised MIS package which will suit all
firms in a particular industry.
 Just like any other systems, in MIS also, the quality of inputs
governs the quality of outputs.
 MIS takes into account mainly quantitative factors, thereby
ignoring non-quantitative factors like morale, attitudes of
members of the organisation, which have an important bearing
on decision-making process of executives.
 Effectiveness of MIS decreases due to frequent changes in
organisation structure, management personnel and concerned
operational team.
Limitations of MIS
 The quality of the outputs of MIS is largely governed by the quantity of
inputs and processes.
 MIS is not a substitute for effective management. It is merely an important
tool in the hands of executive for decision-making and problem solving.
 MIS may not have requisite flexibility to quickly update itself with changing
needs of time, especially in fast changing and complex environment.
 MIS cannot provide tailor-made packages suitable for the purpose of every
type of decisions made by managers.
 MIS takes into account only the quantitative factors. Non-quantitative
factors like morale and attitude of the members of the organization, which
have an important bearing on decision-making process, is conveniently
ignored.
 MIS is less useful for making non-programmed decisions.
 The effectiveness of MIS gets reduced in the organization of the type
where information sharing is not adopted as culture.
 MIS effectiveness decreases if there is frequent change of guards at the
top management and/or frequent alterations in the organizational structure
or the operational team.
Computer for MIS

Conceptually, Management Information System

can exist without Computer; but it is the
power if computer which makes MIS feasible.
MIS are characterised mainly by their ability
to produce periodic reports (e.g. quarterly
sales forecast, etc.), compared with set target
(e.g. budget) and providing required
representation of analysis to be made thereof
— all done in minimum time with minimum
human involvement.
Advantages of using
computer

for
Data access from several MIS
(remote) locations. It is possible to assimilate
data from multiple (remotely situated) business locations, where these data
are inputted and validated. After data processing/analysis, reports can be sent
back to the remote locations, if required.
 Data security.
 Data confidentiality. The confidential nature of data and information can be
maintained in a computer system. With this application, the MIS becomes a
safe application in the organisation.
 Data storage.
 Faster computation.
 Integrates working of different information sub-system.
 Widened scope of analysis.
 Better decision making.
 Increased effectiveness of information system.
 User-friendly.
 More comprehensive information. The use of computer for MIS enables
system experts to provide more complete and wide-ranging information to
executives on business matters, so as to assist better decision making.
Constraints in operating MIS

 Non-availability of experts. There is a deficiency of qualified

MIS people, who can — identify the information needs for
decision making process; design and implement an effective
MIS as per this information needs; etc..
 Difficulty in obtaining experts to operate MIS. The source of
availability of experts for running MIS effectively is not always
known to management.
 Non-standardized. Due to varied business objectives, MIS
has varied applicability — which makes it impossible to
standardise MIS. As a result, difficulty arises in designing,
implementing and maintaining the MIS.
 Limitation in financial sourcing. In order to operate,
implement and execute effective MIS, appropriate financial
sourcing is required, which poses problem at times.
Subsystems of MIS
System
 Database systems. These systems process and store
information, which becomes the organisation’s memory.

 Direct Control systems. These systems monitor and report

on activities such as output levels, sales ledger and credit
accounts in arrears.

 Enquiry systems. These are systems based on databases,

which provide specific information such as the performance of
a department or an employee.

 Support systems. Support systems are systems that provide

computer-based methods and procedures for conducting
analyses, forecasts and simulations.
Misconceptions about MIS
 Study of MIS is about computers. This is a false statement. MIS can be computerised
as well as used manually. Computer is just a tool which ensures complex activities at
high speed, assured accuracy and consistency. The installation of computer depends on
several factors such as: size of the organisation, complex needs of information
processing, etc.

 More data means more Information. In a report, it is the information which is relevant.
Along with information, data might also be there to support the information. Irrelevant
data or irrelevant information, both are unwanted and are to be avoided. It may be worth
mentioning, that in advertising, white (i.e. blank space) is also significantly important.
Presentation of extra data/information, or mentioning irrelevant or avoidable
facts/data/information, is termed as ‘information overload’. Such an information overload
not only reduces the importance of report, but also destroys the purpose of its
preparation.

 Accuracy in reporting is action of vital importance. Accuracy in reporting depends

on the type of usage it is put into. For example, in Financial Accounting, when we are
recording transactions in the financial books (e.g. ledger posting), we need to put the
exact amount, rounded to the nearest rupee; but, when the Balance Sheet is presented,
the amount is rounded to the nearest hundred, or what-ever may be the requirement.
Similarly, in MIS, accuracy of quantitative values is not of prime importance, but that of
content of information is importance. Whereas in case of operational level, the scenario
is just the reverse.