CHAPTER UNE

1 1. .1 1 I IN NT TR RO OD DU UC CT TI IO ON N
Business managers today, are much more concerned about the eIIect oI competition than they
were even a Iew years ago. They must react to the competitive threats not only Irom local source
but also Irom regional, national and international source; likewise they must seek to explore all
opportunities that are available in the immediate, national and Global environment. Deregulation
has also increased competitive pressure Ior organizations to survive, grow and prosper. In such a
competitive environment, managers must employ a lot oI the resources at their disposal as
eIIiciently as possible so as to accomplish the objectives and goals oI the enterprise. The
managers are responsible to their organisations Ior being better than their competitors in all areas
in the industry so has to capture a higher market share and in order to be strong enough to
compete with Multinational Companies (MNC).
Management InIormation System provides inIormation in Iorm oI reports and displays to
managers and many business proIessionals. For example sales managers may use their
networked computer and web browser to get instantaneous display about the sales results oI their
daily sales analysis report to evaluate sales made by each sales personnel.
Management InIormation System also takes into account integrative nature oI
inIormation Ilow as well as the structuring oI the organisation around decision centres. Standards
oI perIormance are part oI any good plans; hence, determination oI standards like other aspects
oI the planning process depends on the availability oI relevant management inIormation system.
Management inIormation system aids the Iunctioning and monitoring oI an organisation. It also
describes the components and resources to ensure the proper Iunctioning oI an organisation.
Management inIormation system has changed the physical layout oI oIIices to
accommodate local networks and departmental integrated systems. It is also a Iormalised
procedure to provide management at all levels and in all Iunctions with appropriate inIormation
Irom all relevant source to enable them make timely and eIIective decisions Ior planning,
directing, evaluating, and controlling the activities Ior which they are responsible. A major task
also Iacing management in almost every Iield oI endeavour is to plan careIully so that the
quantity and quality oI inIormation obtained will be adequate to meet its needs.
A well planned management inIormation system enables a business Iirm to determine and
examine it inIormation needs in a perspective that is important to its need, which is evaluated in
relation to the overall operation oI the organisation. EIIective management inIormation system
requires operational personnel who are skilled in a wild array oI quantitative techniques. All
levels oI management need inIormation on which to base decisions, plan, organise and control
the overall structure oI Management InIormation System.
One potentially powerIul resource available to managers is InIormation Technology (IT),
though it could also serve as a threat/problem, but the Top management has to be creative and
strategic enough through their conceptual and intellectual capacity to explore Iull opportunities
in all strategic decisions oI the enterprise which aIIect the long term objectives oI the
Organisation. More reports has shown how InIormation Technology has successIully given some
companies an advantage over their competitors both in the National and Global Markets.
Simply stated, inIormation is the liIe blood oI any organisation. Without it business
collapses; either big or small.

1 1. .2 2 A AI IM MS S A AN ND D O OB BJ JE EC CT TI IV VE E O OF F T TH HE E S ST TU UD DY Y
The aims oI this study are to critically examine 'The Impact of Management Information System
on Organisational Performance`, using Opsonin Pharma Limited as the organisation Ior the
case study. The objective oI the study includes:
To determine iI MIS policies or practices, processes, objectives and internal control are
adequate.
To evaluate whether MIS application provides users with timely, accurate, consistent,
complete and relevant inIormation.
To determine whether MIS application and enhancement system exist to adequately
supports corporate goals.
1 1. .3 3 S St ta at te em me en nt t o oI I R Re es se ea ar rc cb b P Pr ro ob bI Ie em m
According to Barry (1988) inIormation is a generic term, because it has been described as the
livewire oI any enterprise (public, private, local Iirm, Multinational company, manuIacturing,
merchandise, and Iranchise business, retailing stores, multiple chain stores or service oriented
organisation). It provides the relevant concept and intelligence to enable the right thing to be
done at the right time.
Business Executives need to be inIormed about day-to-day events so that it can make
reasonable and appropriate decision based on Iacts rather than assumption. InIormation system is
more diIIicult due to the changing nature oI the application oI MIS. Against this background,
there is need to conduct a survey on the impact oI Management InIormation System on corporate
perIormance.
The problems to be studied are as Iollows:
Is there any need Ior Management InIormation System in Opsonin Pharma Limited?
Does the status oI Opsonin Pharma Limited determine the type oI inIormation system in
it?
Does MIS aid decision making in Opsonin Pharma Limited?
Is there any impact oI MIS on the company?
Is there any Iree and unattended inIormation in Opsonin Pharma Limited?
Could there be any room Ior development or improvement?

1 1. .4 4 S SI Ig gn nI II II Ic ca an nc ce e o oI I T Tb be e S St tu ud dy y
The research study would be oI great importance to individual Iirms, industry and even the
government in the Iollowing ways:
To help the organisation structure themselves in such a way that will Iacilitate easy
inIormation Ilow.
To help the organisation in evaluating alternative long time and short term planning,
Iinancial projection, preparation oI reports and analysis.
The study will help change the structure oI the job nature oI the organisation, change the
way people do their jobs and to some extent the way individual organisation view
themselves in context oI the society.
It helps to ensure accuracy and consistency.
The study will help to promote good image oI the company, social responsibility and
customers` conIidence as well as dependency.
It will stimulate Iurther economic, social, political and academic research that will build
better initiative with regards to drawing maximum beneIits Irom an eIIective
Management InIormation System.

1 1. .S S S Sc co op pe e o oI I T Tb be e S St tu ud dy y
The scope oI the study is limited; this is because it covers Opsonin Pharma Limited, one
oI the older and major pharmaceutical company in Bangladesh. The company in question is very
large and has a variety oI pharmaceuticals products which are sold and distributed nationwide,
some countries in Asia and to UniceI. Our Iocus here is on their InIormation System used only
internally by the company. However, this will be conIined to current dimension analysis which is
relatively more readily available such as a characteristic oI an eIIective management inIormation
system in the organisation. The study will also cover a no. oI years, so as to ascertain the true
nature oI needs and beneIits oI management inIormation system.

1 1. .6 6 L LI Im mI It ta at tI Io on ns s o oI I T Tb be e S St tu ud dy y
The basic threats and limitation oI Management InIormation System is Iinancial constraints and
cooperation. Other limitations are:
O Speed and Ilexibility requirement oI product development, manuIactures and delivery
cycles.
O #e-engineering and Iunctional integration oI business processes.
O Integration oI the organisations strategies, processes, structures, and culture.

The limitation oI the study in the company Opsonin Pharma Limited stands as the System is not
yet a Iully developed system and there are some areas oI concern about its Iunctionality.



















CHAPTER TWU
LI1LkA1UkL kLVILW

2 2. .1 1 M Ma an na ag ge em me en nt t I In nI Io or rm ma at tI Io on n S Sy ys st te em m D De eI II In ne ed d
Weihrich and Koontz |2001| deIined Management InIormation System as a Iunctional system oI
gathering, comparing, analysing, and dispersing internal and external inIormation to the
enterprise in a timely, eIIective, and eIIicient manner. According to Wikipedia, 'A management
information system (MIS) is a system that provides inIormation needed to manage
organizations eIIiciently and eIIectively.
According to Kenneth C. Laudon and Jane Price Laudon in their book Management
Information Systems. A Contemporary Perspective, an inIormation system is "a set oI procedures
that collects (or retrieves), processes, stores, and disseminates inIormation to support decision
making and control." In most cases, inIormation systems are Iormal, computer based systems
that play an integral role in organizations. Although inIormation systems are computer based, it
is important to note that any old computer or soItware program is not necessarily an inIormation
system. "Electronic computers and related soItware programs are the technical Ioundation, the
tools and materials, oI modern inIormation systems," Laudon and Laudon wrote. "Understanding
inIormation systems, however, requires one to understand the problems they are designed to
solve, the architectural and design solutions, and the organizational processes that lead to these
solutions."
Though it is sometimes applied to all types oI inIormation systems used in businesses, the
term "management inIormation systems," or MIS, actually describes speciIic systems that
"provide managers with reports and, in some cases, on-line access to the organization's current
perIormance and historical records, Laudon and Laudon noted. "MIS primarily serve the
Iunctions oI planning, controlling, and decision making at the management level." MIS are one
oI a number oI diIIerent types oI inIormation systems that can serve the needs oI diIIerent levels
in an organization. For example, inIormation systems might be developed to support upper
management in planning the company's strategic direction or to help manuIacturing in
controlling a plant's operations. Some oI the other types oI inIormation systems include:
transaction processing systems, which simply record the routine transactions needed to conduct
business, like payroll, shipping, or sales orders; and oIIice automation systems, which are
intended to increase the productivity oI oIIice workers and include such systems as word
processing, electronic mail, and digital Iiling. Ideally, the various types oI inIormation systems in
an organization are interconnected to allow Ior inIormation sharing.
Management inIormation system can be deIined as a support to management to provide
the competitive advantage which must support the goals oI the organisation. MIS is a planned
system oI collecting, processing, storing, disseminating data in the Iorm oI inIormation needed to
carry out the Iunctions oI management. It can also be documented reports oI the activities,
planned and executed.
Management inIormation systems involve three primary resources: technology,
inIormation, and people. It's important to recognize that while all three resources are key
components when studying management inIormation systems, the most important resource is
people. Management inIormation systems are regarded as a subset oI the overall internal controls
procedures in a business, which cover the application oI 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 inIormation systems are distinct Irom
regular inIormation systems in that they are used to analyze other inIormation systems applied in
operational activities in the organization. Academically, the term is commonly used to reIer to
the group oI inIormation management methods tied to the automation or support oI human
decision making, e.g. decision support systems, expert systems, and executive inIormation
systems.

2.2 OVERVIEW OF MANAGEMENT INFORMATION SYSTEM
Initially in businesses and other organizations, internal reporting was made manually and only
periodically, as a by-product oI the accounting system and with some additional statistic(s), and
gave limited and delayed inIormation on management perIormance. Previously, data had to be
separated individually by the people as per the requirement and necessity oI the organization.
Later, data was distinguished Irom inIormation, and so instead oI the collection oI mass oI data,
important and to the point data that is needed by the organization was stored.
Earlier, business computers were mostly used Ior relatively simple operations such as tracking
sales or payroll data, oIten without much detail. Over time, these applications became more
complex and began to store increasing amount oI inIormation while also interlinking with
previously separate inIormation systems. As more and more data was stored and linked man
began to analyze this inIormation into Iurther detail, creating entire management reports Irom the
raw, stored data. The term "MIS" arose to describe these kinds oI applications, which were
developed to provide managers with inIormation about sales, inventories, and other data that
would help in managing the enterprise. Today, the term is used broadly in a number oI contexts
and includes (but is not limited to): decision support systems, resource and people management
applications, enterprise resource planning (E#P), enterprise perIormance management (EPM),
supply chain management (SCM), customer relationship management (C#M), project
management and database retrieval applications.
"The Iive eras are general-purpose mainIrame and minicomputer computing, personal
computers, client/server networks, enterprise computing, and cloud computing."(Management
InIormation Systems: Managing the Digital Firm, 11th Edition. Prentice Hall/CourseSmart,
12/30/2008. p. 164). The Iirst era was ruled by IBM and their mainIrame computers, these
computers would oIten take up whole rooms and require teams to run them, IBM supplied the
hardware and the soItware. As technology advanced these computers were able to handle greater
capacities and thereIore reduce their cost. By 1965 microprocessors began to take the market
away Irom mainIrame computers. This technology allowed small desktop computers to do the
same work that it previously would have taken a room Iull oI computers. This also decentralized
computing power Irom large data centers to smaller oIIices. In the late 1970s minicomputer
technology gave way to personal computers. Now Ior a relatively low cost anyone could have a
computer in his own home. This allowed Ior businesses to give their employees access to
computing power that 10 years beIore would have cost tens oI thousands oI dollars. This
proliIeration oI computers also helped create a need to connect these computers together on a
network giving birth to the Internet. As technology has increased and cheapened the need to
share inIormation across a large company had also grown, this gave way to the client/server era.
With this era computers on a common network were able to access shared inIormation on a
server. This allows Ior large amounts oI data to be accessed by thousands and even millions oI
people simultaneously. The latest evolution oI InIormation Systems is cloud computing a recent
development, cloud computing lets users access data stored on a server, where they can not only
see the data but also edit, save, download or upload. This along with high speed networks has led
to a much more mobile view oI MIS. In cloud computing the manager does not have to be at a
desk to see what their employees are working on but instead can be on a laptop, tablet pc, or
even smartphone.
An 'MIS' is a planned system oI the collection, processing, storage and dissemination oI data in
the Iorm oI inIormation needed to carry out the management Iunctions. In a way, it is a
documented report oI the activities that were planned and executed. According to Philip Kotler
"A marketing inIormation system consists oI people, equipment, and procedures to gather, sort,
analyze, evaluate, and distribute needed, timely, and accurate inIormation to marketing decision
makers."
|3|

The terms MIS and information system are oIten conIused. InIormation systems include systems
that are not intended Ior decision making. The area oI study called MIS is sometimes reIerred to,
in a restrictive sense, as inIormation technology management. That area oI study should not be
conIused with computer science. IT service management is a practitioner-Iocused discipline.
MIS has also some diIIerences with E#P which incorporates elements that are not necessarily
Iocused on decision support.
The successIul MIS must support a business's Five Year Plan or its equivalent. It must provide
Ior reports based upon perIormance analysis in areas critical to that plan, with Ieedback loops
that allow Ior titivation oI every aspect oI the business, including recruitment and training
regimens. In eIIect, MIS must not only indicate how things are going, but why they are not going
as well as planned where that is the case. These reports would include perIormance relative to
cost centers and projects that drive proIit or loss, and do so in such a way that identiIies
individual accountability, and in virtual real-time.
Any time a business is looking at implementing a new business system it is very important to use
a system development method such as system development liIe cycle. The liIe cycle includes
analysis, requirements, design, development, testing and implementation.

OB1ECTIVES OF MANAGEMENT INFORMATION SYSTEM
The objectives oI management inIormation systems includes the provision oI inIormation to all
levels management at the most appropriate time at an acceptable level oI accuracy and at an
economical cost, such inIormation is used in the decision making process Ior modiIying the state
oI system by taking appropriate action. An essential requirement oI MIS is Ieedback which is the
process oI communicating a system measured output to control system which generates eIIective
control system, normally a manager in respect oI business system. It is these Iactors which allow
the state oI a system to be modiIied.


2 2. .3 3 D DI IF FF FE ER RE EN NT T K KI IN ND DS S O OF F S SY YS ST TE EM MS S
Three main categories oI inIormation systems serve diIIerent organizational levels: operational-
level systems, management-level systems, and strategic-level systems.
Operational-level systems support operational managers by keeping track oI the
elementary activities and transactions oI the organization, such as sales, receipts, cash deposits,
payroll, credit decisions, and the Ilow oI materials in a Iactory. The principal purpose oI systems
at this level is to answer routine questions and to track the Ilow oI transactions through the
organization.

Management-level systems serve the monitoring, controlling, decision-making, and
administrative activities oI middle managers. The principal question addressed by such systems
is this: Are things working well? Management-level systems typically provide periodic reports
rather than instant inIormation on operations. An example is a relocation control system that
reports on the total moving, house-hunting, and home Iinancing costs Ior employees in all
company divisions, noting wherever actual costs exceed budgets.


Strategic-level systems help senior management tackle and address strategic issues and
long-term trends, both in the Iirm and in the external environment. Their principal concern is
matching changes in the external environment with existing organizational capability.

InIormation systems also serve the major business Iunctions, such as sales and marketing,
manuIacturing and production, Iinance and accounting, and human resources. A typical
organization has operational-, management-, and strategic-level systems Ior each Iunctional area.
For example, the sales Iunction generally has a sales system on the operational level to record
daily sales Iigures and to process orders. A management-level system tracks monthly sales
Iigures by sales territory and reports on territories where sales exceed or Iall below anticipated
levels. A system to Iorecast sales trends over a Iive-year period serves the strategic level. We
Iirst describe the speciIic categories oI systems serving each organizational level and their value
to the organization. Then we show how organizations use these systems Ior each major business
Iunction.

Four Major Types of Systems
Figure 2-2 shows the speciIic types oI inIormation systems that correspond to each
organizational level. The organization has executive support systems (ESS) at the strategic level;
management inIormation systems (MIS) and decision-support systems (DSS) at the management
level; and transaction processing systems (TPS) at the operational level. Systems at each level in
turn are specialized to serve each oI the major Iunctional areas. Thus, the typical systems Iound
in organizations are designed to assist workers or managers at each level and in the Iunctions oI
sales and marketing, manuIacturing and production, Iinance and accounting, and human
resources.


FIGURE The four major types of information systems
This Iigure provides examples oI TPS, DSS, MIS, and ESS, showing the level oI the
organization and business Iunction that each supports.

Table 2-1 summarizes the Ieatures oI the Iour types oI inIormation systems. It should be
noted that each oI the diIIerent systems may have components that are used by organizational
levels and groups other than its main constituencies. A secretary may Iind inIormation on an
MIS, or a middle manager may need to extract data Irom a TPS.


TABLE Characteristics of Information Processing Systems


O Transaction processing systems (TPS) collect and record the routine transactions oI an
organization. Examples oI such systems are sales order entry, hotel reservations, payroll,
employee record keeping, and shipping.
O Management information systems (MIS) produce Iixed, regularly scheduled reports based
on data extracted and summarized Irom the Iirm`s underlying transaction processing
systems (TPS) to middle and operational level managers to provide answers to structured
and semi-structured decision problems.
O ecision-support systems (SS) are computer program applications used by middle
management to compile inIormation Irom a wide range oI sources to solve problems and
make decisions.
O ecutive support systems (SS) is a reporting tool that provides quick access to
summarized reports coming Irom all company levels and departments such as accounting,
human resources and operations.
Other than the Iour major inIormation system there are more-
O pert system (S) is a knowledge about a speciIic area to act as an expert consultant to
the user. It is no the replacement oI human being rather they help them in using their
expertise more eIIiciently and eIIectively. When we join the concept oI artiIicial
intelligence with inIormation system, the result is an Expert System.
O Office automation systems (OAS) are meant Ior improving the communication and
productivity oI people in the enterprise. They attempt to automate oIIice procedures and
remove bottlenecks, lacuna in the secretarial work. These systems are helpIul to all levels
oI management.

2 2. .4 4 E EN NT TE ER RP PR RI IS SE E A AP PP PL LI IC CA AT TI IO ON NS S
O nterprise systems, also known as enterprise resource planning (#P) systems provide
an organization with integrated soItware modules and a uniIied database which enable
eIIicient planning, managing, and controlling oI all core business processes across
multiple locations. Modules oI E#P systems may include Iinance, accounting, marketing,
human resources, production, inventory management and distribution.
O Supply chain management (SCM) systems enable more eIIicient management oI the
supply chain by integrating the links in a supply chain. This may include suppliers,
manuIacturer, wholesalers, retailers and Iinal customers.
O Customer relationship management (C#M) systems help businesses manage relationships
with potential and current customers and business partners across marketing, sales, and
service.
O nowledge Management System (MS) helps organizations Iacilitate the collection,
recording, organization, retrieval, and dissemination oI knowledge. This may include
documents, accounting records, and unrecorded procedures, practices and skills.

2 2. .S S I IT T I IN NF FR RA AS ST TR RU UC CT TU UR RE E T TO O D DE EV VE EL LO OP P M MA AN NA AG GE EM ME EN NT T I IN NF FO OR RM MA AT TI IO ON N
S SY YS ST TE EM M
l1 lnfrasLrucLure lncludes lnvesLmenL ln hardware sofLware and servlcessuch as consulLlng
educaLlon and LralnlngLhaL are shared across Lhe enLlre flrm or across enLlre buslness unlLs ln Lhe
flrm A flrm's l1 lnfrasLrucLure provldes Lhe foundaLlon for servlng cusLomers worklng wlLh vendors and
managlng lnLernal flrm buslness processes (see llgure 61) ln Lhls sense l1 lnfrasLrucLure deflnes Lhe
capablllLles of Lhe flrm Loday and ln Lhe near Lerm of say Lhree Lo flve years (Lhe lengLh of Llme lL Lakes
Lo make a slgnlflcanL change ln Lhe flrm's l1 lnfrasLrucLure)



FIGURE 6-1 The connection between the firm, IT infrastructure, and business capabilities
The services a firm is capable of providing to its customers, suppliers, and employees are a direct function of
its IT infrastructure. Ideally, this infrastructure should support the firms business and information systems
strategy. New information technologies have a powerful impact on business and IT strategies, as well as the
services that can be provided to customers.
efining IT Infrastructure

There are two ways oI deIining IT inIrastructure: as technology or as services clusters. In one
sense IT inIrastructure is like the plumbing or electrical systems in a building: a set oI physical
devices and soItware applications that are required to operate the entire enterprise. But an even
more useIul service-based deIinition Iocuses on the services provided by all this hardware and
soItware. In this deIinition, IT inIrastructure is a set oI Iirmwide services budgeted by
management and comprising both human and technical capabilities (Weill et al., 2002). These
services include the Iollowing:

O Computing platIorms used to provide computing services that connect employees,
customers, and suppliers into a coherent digital environment, including large
mainIrames, desktop and laptop computers, and personal digital assistants (PDAs)
and Internet appliances.
O Telecommunications services that provide data, voice, and video connectivity to
employees, customers, and suppliers.
O Data management services that store and manage corporate data and provide
capabilities Ior analyzing the data.
O Application soItware services that provide enterprise-wide capabilities such as
enterprise resource planning, customer relationship management, supply chain
management, and knowledge management systems that are shared by all business
units.
O Physical Iacilities management services that develop and manage the physical
installations required Ior computing, telecommunications, and data management
services.
O IT management services that plan and develop the inIrastructure, coordinate with the
business units Ior IT services, manage accounting Ior the IT expenditure, and
provide project management services.
O IT standards services that provide the Iirm and its business units with policies that
determine which inIormation technology will be used, when, and how.
O IT education services that provide training in system use to employees and oIIer
managers training in how to plan Ior and manage IT investments.
O IT research and development services that provide the Iirm with research on
potential Iuture IT projects and investments that could help the Iirm diIIerentiate
itselI in the marketplace.



INFRASTRUCTURE COMPONENTS

IT inIrastructure today is composed oI seven major components. Figure 6-11 illustrates these
diIIerent but related inIrastructure components and the major vendors within each component
category. Table 6-3 describes the overall spending on each component in the United States
estimated Ior 2005. From the point oI view oI the Iirm, these components constitute
investments that must be coordinated with one another to provide the Iirm with a coherent
inIrastructure.
O Computer Hardware PlatIorms
O Operating System PlatIorms
O Enterprise SoItware Applications
O Data Management and Storage
O Networking/Telecommunications PlatIorms
O Internet PlatIorms
O Consulting and System Integration Services



FIGURE 6 The IT infrastructure ecosystem
There are seven major components that must be coordinated to provide the Iirm with a
coherent IT inIrastructure. Listed here are major technologies and suppliers Ior each
component.
TABLE 6 Estimated Size of US Infrastructure Marketplace Components




2.6 DeveIopIng InIormatIon Systems
"The actions that are taken to create an inIormation system that solves an organizational problem
are called system development (Laudon & Laudon, 2010)". These include system analysis,
system design, programming, testing, conversion, production and Iinally maintenance. These
actions usually take place in that speciIied order but some may need to repeat or be accomplished
concurrently.
System analysis is accomplished on the problem the company is Iacing and is trying to solve
with the inIormation system. Whoever accomplishes this step will identiIy the problem areas and
outlines a solution through achievable objectives. This analysis will include a Ieasibility study,
which determines the solutions Ieasibility based on money, time and technology. Essentially the
Ieasibility study determines whether this solution is a good investment. This process also lays out
what the inIormation requirement will be Ior the new system.
System design shows how the system will IulIill the requirements and objectives laid out in the
system analysis phase. The designer will address all the managerial, organizational and
technological components the system will address and need. It is important to note that user
inIormation requirements drive the building eIIort. The user oI the system must be involved in
the design process to ensure the system meets the users need and operations.
Programming entails taking the design stage and translating that into soItware code. This is
usually out sourced to another company to write the required soItware or company`s buy existing
soItware that meets the systems needs. The key is to make sure the soItware is user Iriendly and
compatible with current systems.
Testing can take on many diIIerent Iorms but is essential to the successIul implementation oI the
new system. You can conduct unit testing, which tests each program in the system separately or
system testing which tests the system as a whole. Either way there should also be acceptance
testing, which provides a certiIication that the system is ready to use. Also, regardless oI the test
a comprehensive test plan should be developed that identiIies what is to be tested and what the
expected outcome should be.
Conversion is the process oI changing or converting the old system into the new. This can be
done in Iour ways:
Parallel strategy Both old and new systems are run together until the new one Iunctions
correctly (this is the saIest approach since you do not lose the old system until the new one is
'bug Iree).
Direct cutover The new system replaces the old at an appointed time.
Pilot study Introducing the new system to a small portion oI the operation to see how it Iares. II
good then the new system expands to the rest oI the company.
Phased approach New system is introduced in stages.
Anyway you implement the conversion you must document the good and bad during the process
to identiIy benchmarks and Iix problems. Conversion also includes the training oI all personnel
that are required to use the system to perIorm their job.
Production is when the new system is oIIicially the system oI record Ior the operation and
maintenance is just that. Maintain the system as it perIorms the Iunction it was intended to meet.

Characteristics of an Effective and Efficient Management Information System
Management inIormation systems (MIS) is an organized approach to gathering inIormation Irom
company operations and making a strategic management decision. Developing quality
characteristics Ior gathering inIormation is essential to making solid management decisions.
Accuracy
O EIIective MIS may be electronic or manual, but, above all, the data contained within the
system must be accurate. Accurate data allow managers and board executives to analyze
the inIormation Ior real risks to the company. Decisions made on accurate data provide
Ior timely decisions to steer the direction oI the company. Inaccurate data waste
management's time chasing red-herring problems and incompetency.
Consistency
O MIS must disseminate complex inIormation throughout the company. An eIIective MIS
will be used to make relevant decisions at all managerial levels so long as the inIormation
contained is consistently added. Companies need to establish input and data collection
procedures that all relevant employees Iollow to ensure uniIormity. Establishing a data
collection monitoring system will reduce inconsistencies. Communicate all changes in
data collection procedures to appropriate compilers.

Objectivity
O The inIormation collected and entered into the MIS must be consistent, accurate and
objective. Data compilers cannot selectively input inIormation that purposely skews
managerial decisions one way or another. The eIIective MIS contains a methodology Ior
objective recording and assemblage oI inIormation.
Completeness
O All data recorded in an MIS must be complete. All angles oI an issue need to have
corresponding data to provide decision-makers with a Iull view oI complex issues and
problems. Where reports can be generated, inIormation summaries must not be myopic in
scope, to eIIect positive results.
Timely
O Many management decisions are based on inIormation Irom a certain time period, such as
quarterly or annual periods. InIormation outside oI the requested time Irame may skew
inIormation and lead to an improperly inIormed decision.
Relevance
O InIormation should be relevant to the strategic decision that company management is
currently reviewing. Because companies may review several business opportunities at
one time, avoiding inIormation not relating to the decision is essential.
CostEffective
O The MIS needs to be a cost-eIIective and eIIicient system Ior gathering inIormation. Most
oI these systems are developed internally, creating costs that cannot be passed to clients





6 PROBLEM OF IMPLEMENTING A COMPUTER BASE MANAGEMENT
INFORMATION SYSTEM
Dickson |1970| identiIied some major Iactors that determine whether the implementation oI a
new MIS will be resisted and to what event they are:
isrupting of established departmental boundaries: The establishment oI a new MIS oIten
results in change in several organizations units.
Participation. In designing and implementing MIS Ieatures users should be made members oI
the MIS team operating mangers, in particular they should have a particular say in the item to be
included. The disposition oI the entire inIormation and possible job modiIication, iI the entire
design and implementation process is taken over by technology.
Communication. The aim and characteristics oI the system should be communicated to all
members oI the MIS team as well as the users.
#edefinition of performance measurement. A new MIS may modiIy a manager`s job to the point
where old methods oI perIormance evaluation no longer apply or is no longer applicable. For this
reason MIS calls Ior proper evaluation.
ThereIore, a new MIS may liberate middle managers Irom many boring and routine task
and may also give them the opportunity to use the inIormation provided by the system in more
creative and productive ways.

2.? ADVANTAGES OF MANAGEMENT INFORMATION SYSTEMS
The Iollowing are some oI the beneIits that can be attained Ior diIIerent types oI management
inIormation systems.
O The company is able to highlight their strength and weaknesses due to the presence oI
revenue reports, employee perIormance records etc. The identiIication oI these aspects
can help the company to improve their business processes and operations.
O Giving an overall picture oI the company and acting as a communication and planning
tool.
O The availability oI the customer data and Ieedback can help the company to align their
business processes according to the needs oI the customers. The eIIective management oI
customer data can help the company to perIorm direct marketing and promotion
activities.
O InIormation is considered to be an important asset Ior any company in the modern
competitive world. The consumer buying trends and behaviors can be predicted by the
analysis oI sales and revenue reports Irom each operating region oI the company.

PROBLEMS OF MANAGEMENT INFORMATION SYSTEM
The users oI MIS results into a situation where a relatively little success in providing
management with inIormation is achieved and the Iollowing reasons are responsible:
1. Lack oI management involvement in the design oI MIS.
2. Narrow and/or inappropriate emphasis oI the computer system.
3. Undue concentration on low level data processing application.
4. Lack oI management knowledge oI computer.
5. Poor appreciation by inIormation specialist oI management inIormation
requirement and organisational problems.
6. Lack oI top management support.


LIMITATION OF MANAGEMENT INFORMATION SYSTEM
Although inIormation system plays a vital role in modern organisations, they are not with their
limitations. In particular, inIormation systems have some basic limitations.
1. InIormation systems are expensive and diIIicult to develop and implement.
2. InIormation systems are not suitable Ior all tasks or problems.
3. InIormation provided to managers may not be as accurate, timely, complete or
relevant as it appears.
4. Managers may have unrealistic expectations oI what inIormation systems can do.
5. The inIormation system may be subject to sabotage, computer viruses or down
time.