mis

1. INTRODUCTION TO MIS
Management Information System plays a very important role in an
organization. There is hardly a business magazine that dos not
contain article about information system.
MIS can be defined as –
“A system which collects, processes, stores and distributes
information to help in decision making for managerial functions.”
(Planning, staffing, directing, controlling, organizing and budgeting)
It may also be defined as Integrated user/ Machine system for
providing information to support the decision making process.
MIS is a computer based system, which presents both external and
internal information of business.
This system utilizes computer hardware and software, manual
procedure for analysis, planning, control and decision making.
These system do not take decisions but they assist in providing a
necessary information as an input to the decision making process.
MIS should provide information which is consistent, accurate, timely,
economically flexible and relevant.
MIS can be computerized or manual. MIS provides information in
report format on regular basis to assist managers with decision
which occur frequently and can be anticipated.
MANAGEMENT
Management has been defined in a variety of ways, but for our
purpose it compromises the processes or activities that describes

2. what managers do in the operation of their organization; plan,
organize, initiative and control operations.
INFORMATION
Data must be distinguished from information. Data are facts and
figures that are not currently being used in decision process.
Information consist of data that have been retrived, processed or
otherwise used for informative or inference purposes, arguments, or
as a basis for forecasting or decision making.
SYSTEMS
A system can be described simply as a set of elements joined
together for a common objective. The system concept of mis is
therefore one of the optimizing the output of the organization by
connecting the operating sub-system through the medium of
information exchange
PYRAMIDICAL STRUCTURE OF MIS
I) Lower level :-The bottom layer consists of information
required for transaction processing and inquiry processing.
II) Operational level: - This layer has the information which is
required for day to day performance of activities and their
control.
III) Middle level: - This layer has the information which is useful
for tactical planning and decision making to implement the
policy of top management.

3. IV) Top level: - This layer has information which is useful for
strategies and policy planning.
CHARACTERISTICS OF MIS
The mis plays a vital role in management, administrations and
operations of an organization as it helps in information generation,
communication, problem identification in the process of decision
making.
The main features of mis are:-
I) Management oriented:- The development of mis starts after
deciding the management needs and keeping in view overall
objective of management.
II) Management directed:- A good mis removes the lack of
knowledge, enriches experience and improves analytical
abilities leading to better business judgement.
III) Integrated system: - MIS binds together database of business
system and through information interchange, integrates the
organization. It also provides adequate development resources
and removes the human and organizational barriers to
progress.
IV) Avoid redundancy: - Since mis is a integrated system, it avoids
unnecessary inconsistency and redundancy in data gathering
and storage.
V) Common data flow: -MIS provides common data flows, which
try to utilize minimum data processing efforts and minimize the
number of output document.

4. VI) Heavy planning element: - Designing and implementation of
mis require detailed and meticulous planning of activities like
acquisition and utilization of resources.
VII) Common database: - MIS acts as a master that holds the
functional sub-system together. It achieves this aim by allowing
access to different master files of data to several functional
sub-systems.
VIII) Flexibility: - MIS design should be flexible so as to provide
alternate ways of processing data and system should be easy to
operate so that not much of computers skills are required.
IX) Computerization: - MIS can be computerized because of its
nature. This provide speed, accuracy and consistency in
creating and access of files.
X) Relevance: - MIS should deal only with operation and control of
relevant information.
XI) Support to top management: - MIS cannot be effective unless
they receive the full support of top management. For this, top
management should be educated about cost and benefits of
mis.
XII) Periodic evaluation: - The last feature of mis is that the system
should be evaluated at periodic intervals to ensure that mis is
achieving the objective of which this has been installed.
COMPONENTS OF MIS
Management information system refers to the data, equipment and
computers program that are used to develop information for
managerial use. The MIS consists of following components which are
as follows-

5. I) People:- People is only living component of mis which
operates and controls the other components of mis. They
enter, analyze and diagnose data, so that useful information
is produced and provided to top executives for decision
making.
II) Data process: - Data process uses different procedures, so
that data can be properly analyzed and effective information
is generated. Procedures explain people how to operate the
computer hardware, what program to run, what data to use
and what to do with the results.
III) Data communication:- There are different ways for
communication of data. It may be informed orally or in the
form of written report. Written forms are more appropriate
than oral ones as it is permanent and systematic way of
organizing information.
IV) Information: - Data are facts and figures that are not
currently being used in decision process. Data is process by
applying different procedures to obtain information. It may
be recorded into computer, storage media or manual files
and is retrived whenever required.
V) System planning: - We have achieved a very high degree of
automation and combination sub-system in scientific,
mechanical and factory manufacturing operation. The
system concept of mis is therefore of optimizing the output
of the organization by connecting the operation sub-system,
through the medium of information exchange.
VI) Hardware and Software: - The hardware generally consists of
computer equipments, on the other hand software consists

6. of programs or instructions given to the computer such as
pay roll processing, invoices etc.
FUNCTIONS OF MIS
A MIS is used to collect data, store and process data and present
information to managers.
I) Collect data:- Data can be obtained from source within
and outside the organization. Internal sources such as
records, reports and external sources such as
publications, customers and consultancy.
II) Store and process data:- After creation of data, a
database must be stored and processed in a form useful
to managers. The data can be loaded into computers for
easy access by user.
III) Present information to users: - After collection of data,
storing and processing of data, the next step is to present
the information to managers for their use.
USES/BENEFITS/ROLE OF MIS
I) MIS ensures that appropriate and relevant data is
collected from various sources, processed and is sent
further to needy destination.
II) It fulfills the needs of individual, group, management.
III) Mis helps in strategic planning, management control,
operational control and transaction processing system.

7. IV) Mis plays an important role in information generation,
communication, problem identification and decision
making administration.
V) With good mis support marketing, finance, production
and personnel functions increases efficiency.
VI) Mis creates structured database and therefore saves
time.
VII) Mis brings clarity in communication and understanding,
thus helps in bringing degree of professionalism.
INFORMATION
We breathe information, eat information, drink information, wake
up with information, sleep with information etc. So information is as
life blood of any organization, without information survival of any
organization is not possible.
Information means “processing of data or analyses of data in a
specific context to get required information”. It is a basis of decision
making. The decision taken on basis of complete and accurate
information is less risky.
The value of perfect information is calculated by finding out the
difference between the optimal policy with and without perfect
information.
Characteristics of an information

8. i) Accuracy :- accuracy means that information is free from
mistakes and error and it accurately and clearly reflects the
meaning of data from which it is derived. It conveys the
accurate picture to receiver and is free from biasness.
ii) Timeliness :- information must be delivered at the right time
and the right place to the right person otherwise
information would be of little value to the organization.
hence, making information available to the receiver within
time is very crucial for every organization.
iii) Relevance :- information should be to the point and
meaningful to the decision maker. Relevance of information
for different users will be different.
iv) Correct information format :- information should be given
to the user in such a form that it could be easily understood
by user.
v) Completeness :-information is said to be complete if
decision maker can satisfactory solve the problem at hand
using that information. Incomplete information has no
meaning for user.
vi) Subjectivity :- it is the value and usefulness of the
information.
vii) Accessibility :- information should be readily accessible in
desired format when needed. Technological advancement
has made data accessibility easy.
Types Of Information System

9. I) TPS(Transaction Processing System) :- Most fundamental
computer system which is concerned with processing of
business is called TPS. The objective of TPS is to improve
routine business activities on which functions of organization
depends. The main work of TPS is to record and process the
data resulting from business transactions. A transaction is an
event or entity which affects the organization. Transaction
processing could also be considered as a set of procedures
for handling transactions and it includes activities like
calculation, classification, storage and retrieval, sorting,
validation, verification, summarization etc. These activities
occur at operational level in nay organization. TPS produces
a variety of information system for internal and external
cause.
II) OAS(Office Automation System) :- OAS collects, processes,
stores and transmits data and information in the form of
electronic office communication. These automatic systems
rely on text processing, telecommunication and offer
information system technologies. Example- word processing,
electronic mail, desktop publishing, telecommunication and
document image processing. It enhances the abilities of
users to communicate with their colleagues within their
work groups and organization and with external contact
such as customers and suppliers.
Advantages-
· They provide more time to managers to concentrate on their
basic jobs.
· They improve the quality of work in terms of content,
throughness, timeliness and accuracy.

10. · They speed up specific functions and thereby increases the
quantity of clerical output.
· They reduce the time spent on input capture and creation.
· They co-ordinate and integrate office tasks.
· They enable more cost- effective and time- effective
communications.
· They increase the productivity of office workers at all levels.
Disadvantages –
· Cost of automated office hardware is very high.
· Oas can disrupt traditional office work roles and environment.
· Oas may lead to security problems.
III) EIS(Executive Information System): - The decision made by
executives are mostly unstructured for which informational
requirements are generally for processed and summarized
data from variety of sources. Initially tip executive
information system relies on non computer source. Top level
executives get information whenever they require from
many sources like letters, memos, periodicals and report
produced manually as well as by computer system. Thus,
with computer based EIS provides top management with
immediate and easy access to selective information, which
reduces the information overload on executives and help to
achieve firm’s strategic objective.

11. IV) ES(Expert System): - Expert system aims at formalizing
expertise and makes it available for repetitive types of
business decisions. They use artificial intelligence tools to
generate knowledge out of information. It helps human
experts perform their jobs effectively and is important
where expertise is scarce and is therefore expensive. The
expert system has been developed for the purpose of
expertise from those with the knowledge in a convenient
and easily accessed manner. Expert systems are designed to
replace the function formed by human experts. Expert
system provide information to managers as expert advice.
An expert system supports the intellectual work of
professionals engaged in design, diagnosis or evaluation of
complex situation requiring expert knowledge in a well-defined
area.
Advantages:-
· Planning:- ES can make a valuable contribution to
planning. It can use information from earlier project
which can be used to improve subsequent plans.
· Decision making: - ES can support decision making by
storing information in its knowledge base from several
experts rather than a single expert.
· Monitoring: - ES can be used to monitor the process,
activities of employees and cash management etc.
· Diagnosis: - ES can be used in diagnosing different
conditions. Ex- in diagnosing the reasons for
manufacturing equipment, human diseases in medicine
etc.

12. · Training: - when an ES is being used as a regular nature
in the course of work, users learn the way the system
reaches destination.
· Timely response: - ES are available on call at all the
time and, can be used to provide immediate support
and to perform task immediately.
· Reliability: - they are reliable in the sense that they do
not become tired or bored. They pay attention to all
details and do not overlook any relevant information.
Disadvantages:-
· Expert system are not problem solver.
· It may take longer time to solve problem than an expertise.
· Expert system take long development time and are expensive.
SYSTEM VIEW OF BUSINESS
We should be able to visualize any business organization as a system.
Thus business is a system which is a set of interrelated components
that are working together to achieve organization’s objective in a
controlled manner. In the past, managers had to solve the problem,
independently and in isolation. Suppose organization face the
problem of decline in sales and it is traced that problem is due to
poor performance of sales man. But practically there are no. Of
reasons responsible for that such as poor management, poor
understanding, poor quality of product, poor marketing policy etc.

13. This type of activity could be related to a system. A business must
maintain appropriate relationships with other political, economic
and social systems in the environment. This group includes its
stakeholders such as customers, suppliers, stockholders etc.
Information system can help a business to shape its relationships
with each of these stakeholders. In the same way, MIS is also a
system which consists of group of people, a set of manual and data
processing equipment which aims to provide information to reduce
the uncertainity in decision making.
SYSTEM APPROACH
The system approach in business was born in decade of 1960’s. it is a
systemmatic process of problem solving based on scientific methods
which defines problems and oppurtunity in a system context.
Information describing the problem or oppurtunity is gathered.
Alternative solutions are identified, evaluated so that, best solution
is selected, implemented and then its success is evaluated.
Purpose of system approach is to utilize scientific analysis in complex
organization for-
· Developing and managing operating system i.e. money flow,
personnel system.
· Designing information system for decision making.
System approach of MIS is optimizing the output of the organization
by connecting to operative sub system through the medium of
information exchange. The basic notation of system approach in MIS

14. is to provide information on decision making on planning, organizing,
controlling the operations of sub-system of the firm.
The system approach in business for MIS is implemented by
“SYNERGY”. The concept of synergy tells us that the sum of part is
greater then the whole i.e. the output of total organization can be
enhanced if the components part can be integrated.
Thus, in an organization synergy is simultaneous action of separate
but inter-ralated parts that together produce a total effect greater
than sum of individual parts.
SYSTEM APPROACH IN PLANNING
The Most Basic And Important Function Of Management Is
Plannning. We Know That Plannning Is Needed At All Levels Of
Management And Success Of All Other Management Function
Depend Upon Plannning
Planning means deciding in advance what has to be done, who has to
do it, when it has to be done and how it has to be done. It bridges
the gap between where we are and where we want to go.
This system approach to planning starts with strategic plan as a
framework. The strategig plan is specific but not detailed. The long
term goal provides the constraints for setting intermediate and short
term goals.
Therefore strategic plans ties together the development plan also.
The strategic plannning process consists of two steps-
· Developing the strategy
· Formulating the steps, timing, cost required to achieve the
strategy.

15. SYSTEM APPROACH IN ORGANIZING
Organizing is important to managers because it helps in effective
group action. It also helps in maintaining the people to work
together and accomplish objectives i.e. organizing. It involves the
grouping of tasks necessary to accomplish plans and assign activity to
department.
It consists of following componenets-
 The formal organization system as describes in chart policies
and procedures.
 The informal organization
 The individual as a system
 The organizational communication system
 The power system
 The functional system
 The managemnet process system
 The material logistic system
We know that system approach saya that, output is greater if all part
work with integration. This is same concept of organizing.
Phases of organizing are-
 Developing a technical organization based on traditional
methods of departmentalization.
 Start with overall company’s objectives and develop a hierarchy
of network of system required.

16.  Involve key manager and specialist in order to select group of
people so that plannned activities are done in order to achieve
objective.
SYSTEM APPROACH IN CONTROLLING
Controlling Is Important Because It Is Needed To Achieve The Desired
Results. The Most Common Process Consists Of Three Steps-
 Setting standards of performance- it involves what level of
performance we need. Hence, standards are criteria against
which result can be measured. These criteria can be
quantitative or qualitative.
 Measuring performance- once standards have been
established it is necessary to measure performance against
standards. The statement of measurement and of any
difference is usually in form of personal observation type of
report in oral or written form.
 Deviation control- we know that measuring deviation first
comparison of standards with actual performance is made. If
deviation is found then correction is made by taking some
course of action to achieve the targeted objectives.
Methods and techniques for correcting deviation can be
described in terms of functions of management-a)
PLAN- recycle the management process, review the plan,
modify the goal or change standards.
b) Organize- examine the organization in standard and make
sure duties are well understood.

17. c) Staffing- improve selection of sub-ordinate, improve
training, reassign duties.
d) Directing- provide better leaderhip, motivate the people,
explain the job better.