Relationship of IT with Management

Management information system (MIS)

A management information system (MIS) is a system that provides information needed to manage organizations efficiently and effectively. Management information systems involve three primary resources: technology, information, and people. It's important to recognize that while all three resources are key components when studying management information systems, the most important resource is people. Management information systems are regarded as a subset of the overall controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization.

How management relates with information technology?

The computerization of important business functions has resulted in information technology taking over traditional management functions. Managers now work with or within information technology systems to organize and run their fields or departments. Data and statistical analysis now dominate many management strategies and methodologies.

The ability to quantitatively pin down flaws, anomalies and errors within an systematically organized body of information is a great boon to businesses. Identifying the precise opportunity where profits are made or lost can also suggest possibilities for remedying the situation effectively. Profitability can be restored and enhanced thanks to the innovations of the computer industry.

Implementation of information technology in management:

Companies can implement management information systems to take advantage of information technologys ability to rely on so much detailed information. For instance, a leading provider of management information systems for hospitals is McKesson Corporation. The system compiles
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Relationship of IT with Management

the information and sends it to a manager in a readable format. The reports created by the system tell the manager everything he needs to know to make critical decisions on both small and large scales, from strategy to daily details. This concept actually predates the computerization of business. Information technology has streamlined and automatized the process.

The Role of information technology in management:

The Role of information technology in management is to make the activities and decisionmaking processes of managers more efficient and productive. The management information system pools data from different sources and creates a database. This database allows the manager to perform various analyses on the data and discern what the most appropriate course of action is for a given problem. The system can collect almost any type of information the manager desires, from financial statements by department to product quality and project completion timetables. The system also serves as a communication channel for employees. Employees can edit and share documents within the system with managers or other employees and departments. The system can also be used to send updates and warnings throughout the company. The most important function of a management information system is creating reports. Internal reports help managers by organizing relevant data streams in a coherent and logical manner. The manager can view different reports from different locations or different departments in those locations. Managers can use these reports to identify problems within an organization, such as waste or theft.

Advantages of computer based management system over manual management system 1) Accuracy:
The output or results of a computerized system are more accurate than manual results

2) SPEEDY:
Computer can perform more faster processing of data than a human being. it saves time.

3) Back up system:
Computer can build up of historical records which can be retrieved.

4) Error free results:

There is least probability of finding errors in computerized results.

5) Customer profile:
Computer can build up customer profile. it makes easy to remain in contact with customers.
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The advantages associated with computer-based managerial decision-making can be the following:

(1) Response time is greatly reduced (2) Very large data are stored for information and decision-making (3) Accuracy of information is considerably improved, thereby improving the quality of the decision. (4) Problems are handled more easily by using various operation research models (5) The cost involved in the decision-making process is reduced (6) More secrecy is observed as compared to manual file system

Example of a computer application in banking:

An ATM is an example of a computer application in banking. Computers in the banking sector have enhanced customer service and productivity regarding account management, while streamlining back-office activities. The biggest impact is in the area of competition. Small banking institutions can access the same technology as large banking institutions and, therefore, can compete with them more effectively for business.

Account Management
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In banking, activities start with banks automating customer accounts, which allow personnel to create, update and maintain customer records. Banking hardware and software have enhanced the accuracy of accounts that tellers and other banking personnel process. Banking software performs customer transactions through a centralized data record system. Account management is the genesis and backbone of all banking information systems.

Hardware Technology
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In the 1960s, bank hardware consisted of a mainframe and a punch card machine. Punch cards contained customer account information and were read into the main system by a punch card machine. Midrange and client/server hardware configurations, which are no larger than a minitower system, can run an entire bank in addition to receiving transactions from affiliated bank branches. These new hardware technologies can process more transactions than legacy
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banking hardware systems. Hardware technologies have enabled advances into wireless banking and telecommunications banking.

Electronic Transactions
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Banking systems must perform electronic transactions. Direct deposit is an example of an electronic transaction. Computers processing electronic transactions must have hardware and software encryption capabilities to keep data from being compromised during a transmission. After the computer performs electronic transmissions, it transfers the information to the main computer system for processing and updating. Banks have extended electronic transaction capabilities through landline and cell phones, the Internet and ATMs.

Web-based Banking
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Web-based banking systems use a dedicated server through a bank network system. An area of the banking system is partitioned for Internet applications. Web-based banking systems by law must include secure servers and authenticated certificates regarding transactions from the Federal Deposit Insurance Company and the Federal Reserve Board. Customers who choose to bank online can access their account through a web interface, which integrates with the main computer. A customer's credentials -- user ID and password -- pass through several checkpoints before entering the main system to perform a web-based transaction.

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