UNIVERSITY COLLEGE OF

ENTREPRENEURSHIP (ETI)

BSC LEVEL 300

Management Information
Systems

Course code:
MGT 312

TOPIC:
INTRODUCTION TO
MANAGEMENT INFORMATION
SYSTEM

F. K. O. DUODU Ras K ®2015

EVOLUTIONS OF MIS
Before the 1960s, the role of most information systems was simple. They were
mainly used for electronic data processing (EDP), purposes such as transactions
processing, record-keeping and accounting. EDP is often defined as the use of
computers in recording, classifying, manipulating, and summarizing data. It is also
called transaction processing systems (TPS), automatic data processing, or
information processing. Transaction processing systems as the name implies process
data gotten from business transactions, update operational databases, and produce
business documents. Examples: sales and inventory processing and accounting
systems.
In the 1960s, another role was added to the use of computers: the processing of
data into useful informative reports. The concept of Management Information
Systems (MIS) was born. This new role focused on developing business applications
that provided managerial end users with predefined management reports that would
give managers the information they needed for decision-making purposes.
By the 1970s, these pre-defined management reports were not sufficient to meet
many of the decision-making needs of management. In order to satisfy such needs,
the concept of decision support systems (DSS) was born. The new role for
information systems was to provide managerial end users with ad hoc and
interactive support for their decision-making processes.
Decision support systems (DSS) – provide interactive ad hoc support for the
decision-making processes of managers and other business professionals. Examples:
product pricing, profitability forecasting and risk analysis systems.
In the 1980s, the introduction of microcomputers into the workplace ushered in a
new era, which led to a profound effect on organizations. The rapid development of
microcomputer processing power (e.g. Intel‘s Pentium microprocessor), application
software packages (e.g. Microsoft Office), and telecommunication networks gave
birth to the phenomenon of end user computing. End users could now use their own
computing resources to support their job requirements instead of waiting for the
indirect support of a centralized corporate information services department. It
became evident that most top executives did not directly use either the MIS reports
or the analytical modelling capabilities of DSS, so the concept of executive
information systems (EIS) was developed.
Executive information systems – provide critical information from MIS, DSS and
other sources, tailored to the information needs of executives. Examples: systems
for easy access to analysis of business performance, actions of all competitors, and
economic developments to support strategic planning.
Moreover, breakthroughs occurred in the development and application of artificial
intelligence (AI) techniques to business information systems. With less need for

F. K. O. DUODU Ras K ®2015

human intervention, knowledge workers could be freed up to handle more complex
tasks. Expert systems (ES) and other knowledge management systems (KMS) also
forged a new role for information systems. ES can serve as consultants to users by
providing expert advice in limited subject areas.
Expert systems: knowledge-based systems that provide expert advice and act as
expert consultants to users. Examples: credit application advisor, process monitor,
and diagnostic maintenance systems.
Knowledge management systems: knowledge-based systems that support the
creation, organization and dissemination of business knowledge within the
enterprise. Examples: intranet access to best business practices, sales proposal
strategies and customer problem resolution systems.
The mid- to late 1990s saw the revolutionary emergence of Enterprise resource
planning (ERP) systems. This organization-specific form of a strategic information
system integrates all facets of a firm, including its planning, manufacturing, sales,
resource management, customer relations, inventory control, order tracking,
financial management, human resources and marketing – virtually every business
function. The primary advantage of these ERP systems lies in their common interface
for all computer-based organizational functions and their tight integration and data
sharing needed for flexible strategic decision making.
The rapid growth of the Internet, intranets, extranets and other interconnected
global networks in the 1990s dramatically changed the capabilities of information
systems in business. Internet-based and web-enabled enterprise and global
electronic business and commerce systems are becoming commonplace in the
operations and management of today‘s business enterprises. Indeed today‘s
information systems are still doing the same basic things that they began doing over
50 years ago. We still need to process transactions, keep records, provide
management with useful and informative reports, and provide support to the
accounting systems and processes of the organization.

However, what has changed is that we now enjoy a much higher level of integration
of system functions across applications, greater connectivity across both similar and
dissimilar system components, and the ability to reallocate critical computing tasks
such as data storage, processing, and presentation to take maximum advantage of
business and strategic opportunities. With increasing capabilities, future systems will
focus on increasing both the speed and reach of our systems to provide even tighter
integration combined with greater flexibility.
The Internet and related technologies and applications have changed the way
businesses operate and people work, and how information systems support business
processes, decision-making and competitive advantage.

F. K. O. DUODU Ras K ®2015

Today many businesses are using Internet technologies to web-enable business
processes and to create innovative e-business applications.
E-business is the use of Internet technologies to work and empower business
processes, electronic commerce and enterprise collaboration within a company and
with its customers, suppliers and other business stakeholders. The Internet and
Internet-like networks – those inside the enterprise (intranet) and those between an
enterprise and its trading partners (extranet) – have become the primary information
technology infrastructure that supports the e-business applications of many
companies. These companies rely on e-business applications to:
Reengineer internal business processes, implement electronic commerce systems
with their customers and suppliers, and promote enterprise collaboration among
business teams and workgroups.

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
Information consists of data that have been retrieved, processed or otherwise used
for informative or inference purposes, arguments, or as a basis for forecasting or
decision making.
Data must be distinguished from information. Data are facts and figures that are not
currently being used in decision process.

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 optimizing the output of the
organization by connecting the operating sub-system through the medium of
information exchange

Management Information System can be defined as –

1. “A system which collects, processes, stores and distributes information to

help in decision making for managerial functions.” (Planning, staffing,
directing, controlling, organizing and budgeting)
2. “An Integrated user/ Machine system for providing information to support
the decision making process.”

F. K. O. DUODU Ras K ®2015

 3. “A computer based system, which presents both external and internal
information of business”.
4. “The study of people, technology, organizations and the relationships among
them”.

This system utilizes computer hardware and software, manual procedure for
analysis, planning, control and decision making. The 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.

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.
IV) Top level:- This layer has information which is useful for strategies and
policy planning.

MIS: A SUPPORT TO THE MANAGEMENT

The management process is executed through a variety of decisions taken at each
step of planning organizing, staffing, directing, coordinating and control. As discussed
earlier the MIS aids decision making. If the management is able to spell out the
decisions required to be taken in these steps are tabulated;

STEPS IN MANAGEMENT DECISION

A selection from various alternatives- strategies,
PLANNING
resources, methods, etc.
A selection of a combination out of several
ORGANISATION combinations of the goals, people, resources,
method, and authority.
STAFFING Providing a proper manpower complement.
Choosing a method from the various methods of
DIRECTING
directing the efforts in the organization.
COORDINATING Choice of the tools and the techniques for

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 coordinating the efforts for optimum results.
A selection of the exceptional conditions and the
CONTROLLING
decision guidelines.

The objective of the MIS is to provide information for a decision support in the
process of management. It should help in such a way that the business goals are
achieved in the most efficient manner. Since the decision making is not restricted to
a particular level, the MIS is expected to support all the levels of the management in
conducting the business operations.

CHARACTERISTICS OF MIS
The MIS plays a vital role in management, administrations and operations of an
organization as it helps in information generation, communication, and 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 of 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 an 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
provides speed, accuracy and consistency in creating and access of files.

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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-
I) People: - People is the 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 to 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 retrieved 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
equipment on the other hand software consists of programs or
instructions given to the computer such as pay roll processing, invoices etc.

F. K. O. DUODU Ras K ®2015

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.
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.

SYSTEM DEVELOPMENT CYCLE

The systems development life cycle (SDLC) is an approach for designing and
developing MIS solutions. It proceeds in stages: feasibility study, requirements
analysis, design, development, and implementation. MIS is designed using the
systems development life cycle (SDLC). The SDLC is developed in stages. The first
stage is to do a feasibility study to know the system is worthwhile, analyze the
current situation. Then specify the requirements that the solution should contain.
The next stage is to design a solution (no programming yet). Then the system is
developed (programmed) and tested. Finally, the system goes live for the end users
as it is implemented in the business setting.

F. K. O. DUODU Ras K ®2015

The five phases are:
1. Feasibility Study
2. Requirement Analysis
3. System Design
4. Development
5. Implementation

1. Feasibility study
This is the first stage of the systems life cycle. The scope and objectives of the
proposed system must be written down. The aim of the feasibility study is to
understand the problem and to determine whether it is worth proceeding. There are
five main factors to be considered:
Technical feasibility means investigating whether the technology exists to
implement the proposed system, or whether this is a practical proposition.
Economic feasibility has to do with establishing the cost-effectiveness of the
proposed system if the benefits do not outweigh the costs, then it is not worth going
ahead.
Legal feasibility determines whether there is any conflict between the proposed
system and legal requirements – for example, will the system contravene the Data
Protection Act?
Operational feasibility is concerned with whether the current work practices and
procedures are adequate to support the new system. It is also concerned with social
factors – how the organizational change will affect the working lives of those
affected by the system.
Schedule feasibility looks at how long the system will take to develop, or whether it
can be done in a desired time-frame.
The completion of this stage is marked by the production of a feasibility report
produced by the systems analyst. If the report concludes that the project should go
ahead, and this is agreed by senior managers, detailed requirements analysis will
proceed.

2. Requirements analysis
The second phase of systems analysis is a more detailed investigation into the
current system and the requirements of the new system.
Gathering details about the current system will involve:
o Interviewing staff at different levels of the organization from the end-users to
senior management.

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o Examining current business and systems documents and output. These may
include current order documents, computer systems procedures and reports used
by operations and senior management.
o Sending out questionnaires and analyzing responses. The questions have to be
carefully constructed to elicit unambiguous answers.
o Observation of current procedures, by spending time in various departments. A
time and motion study can be carried out to see where procedures could be
made more efficient, or to detect where bottlenecks occur.
• The systems analyst‘s report will examine how data and information flow around
the organization, and may use data flow diagrams to document the flow. It will
also establish precisely and in considerable detail exactly what the proposed
system will do (as opposed to how it will do it). It will include an in depth analysis
of the costs and benefits, and outline the process of system implementation,
including the organizational change required. It must establish who the end-users
are, what information they should get and in what form and how it will be
obtained.
• Alternative options for the implementation of the project will be suggested.
These could include suggestions for:
• Whether development should be done in-house or using consultants;
• What hardware configurations could be considered;
• What the software options are.
The report will conclude with a recommendation to either proceed or abandon the
project.

3. System design
The design specifies the following aspects of a system:
• The hardware platform – which type of computer, network capabilities, input,
storage and output devices;
• The software – programming language, package or database;
• The outputs – report layouts and screen designs;
• The inputs – documents, screen layouts and validation procedures;
• The user interface – how users will interact with the computer system;
• The modular design of each program in the application;
• The test plan and test data;
• Conversion plan – how the new system is to be implemented;
• Documentation including systems and operations documentation. Later, a user
manual will be produced.

F. K. O. DUODU Ras K ®2015

4. System Development
This phase includes both the coding and testing of the system, the acquisition of
hardware and software.

5. Implementation
This phase involves the installation of the new system or conversion of the old
system to the new one. The installation phase can include:
• Installing the new hardware, which may involve extensive re-cabling and
changes in office layouts;
• Training the users on the new system;
• Conversion of master files to the new system, or creation of new master files.

Review Questions

1. Define Management information systems from both a technical and a

business perspective. 4 marks

2. Describe six (6) reasons why Management information systems are so

important for businesses today. 6 marks

F. K. O. DUODU Ras K ®2015