INTRODUCTION

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 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

Lower level:-The bottom layer consists of information required for transaction

processing and inquiry processing.
Operational level:- This layer has the information which is required for day to day
performance of activities and their control.
Middle level:- This layer has the information which is useful for tactical planning and
decision making to implement the policy of top management.
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.
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 followsI)

II)

III)

IV)

V)

VI)

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.
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.
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.
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.
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.
Hardware and Software:- The hardware generally consists of computer
equipments, on the other hand software consists 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)

II)

III)

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.
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.
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)
II)
III)
IV)
V)
VI)
VII)

MIS ensures that appropriate and relevant data is collected from various
sources, processed and is sent further to needy destination.
It fulfills the needs of individual, group, management.
MIS helps in strategic planning, management control, operational control and
transaction processing system.
MIS plays an important role in information generation, communication,
problem identification and decision making administration.
With good MIS support marketing, finance, production and personnel
functions increases efficiency.
MIS creates structured database and therefore saves time.
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
i)

ii)

iii)
iv)
v)

vi)

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.
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.
Relevance :- information should be to the point and meaningful to the decision
maker. Relevance of information for different users will be different.
Correct information format :- information should be given to the user in such a
form that it could be easily understood by user.
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.
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

I)

II)

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.
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.
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

III)

Cost of automated office hardware is very high.

OAS can disrupt traditional office work roles and environment.
OAS may lead to security problems.
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,

IV)

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 firms strategic objective.
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.
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.
Example of MIS :
Fulfilling a customer order involves a complex set of steps that requires the close
coordination of the sales, accounting, and manufacturing functions. The various steps
involved in the process are explained with the help of the following diagram.

Fig: Order Fulfillment Process

In this diagram order fulfillment process is explained . firstly the sales department
generate an order of the product requirement by the customer then the order is
submitted by the sales department for the further processing of order. The accounts
department check credit limit of the customer , if ordered quantity of product is
within the credit limit of the customer , the accounts department approve it and
generates the invoice. After that the manufacturing and production department
assembles th product and ships the product to the customer.

Design of MIS for Order Fulfillment Process

In the system illustrated by this diagram, three TPS supply summarized transaction
data to the MIS reporting system at the end of the time period. Managers gain access
to the organizational data through the MIS, which provides them with the appropriate
reports