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Management Information System (MIS) is an integrated manmachine system that provides information to support the planning and control functions of managers in an organization. It is designed to provide information to various organizational levels , to assist them in decision-making. Many firms have customer information system, marketing information system, accounting information system. These levels use the information for the purpose of decision-making. As the business organizations grow in complexity managers depend more heavily upon various external and internal sources of information.
According to Schwartz Management information system is a system of people, equipment, procedures, documents, communications that collects, validates, operates, transforms, stores, retrieves and present data for use in planning , controlling and other managerial process.
According to G.B. Davis Management Information System is an integrated man-machine system for proving information to support the operations, management analysis, and decision-making functions in an organization. Jerome Kanter defined Management information system as a system that aids management in making , carrying out , and controlling decisions.
Management Information System (MIS) has three components: Management Information System Management is concerned about the functional aspects of the management. Managers have to perform important functions i.e. planning, organizing, directing and controlling for decision-making. Information can be defined as the data which is organized and presented at a time and place so that the decision-maker take necessary action. Information is the result/product of processing data. System is a group of elements/components joined together to fulfill certain functions. A system is made up of sub-systems, which directs the organization efforts towards the achievement of its objectives.
Thus Management Information system is a set of integrated , well knit and scientifically designed system whereby raw data get converted into decision-based and control oriented information. Management information system ensures: Right information at right time to right person and in right manner.
Objectives of Management Information System(MIS) : To provide information for planning , organizing and controlling. To store and manage data efficiently from all the functional areas of the management.
To process the collected data and derive information. To provide information quickly as and when required. To reduce the risk and uncertainty in the managerial decisionmaking. To collect and store the data for the purpose of internal research
Importance of Management Information System (MIS): Management information system helps in minimizing risks in decision-making.
Management information system process data and derive information out of them.
Management information system provides information about various aspects of the business.
Management information system helps the executives to avail the information regarding functional areas of quickly. Management information system helps in preparing corporate report.
Management information system helps the HRD manager in finding out the requirements of the human resources planning , recruitment, selection, performance appraisal, transfer ,training & development, promotion, absenteeism and employees turnover which is useful in drafting sound HRD policies. Data regarding production helps the production manager in deciding out capacity utilization, number of rejection per batch, frequency of break-down, status of shipment of processed order etc. It provides information regarding inventory position and ensures that the chances of inventory out of stock may be minimized. It present information regarding product price, promotion, demand, sales etc. to marketing manager instantly and ensures smooth functioning of the department.
Limitation of Management Information System (MIS) : Management Information System (MIS) takes the account mainly quantitative factors, thus it ignores the non-quantitative factors like morale, attitude of the members of the organization which have an important bearing on the decision-making of executives. Management Information System (MIS) effectiveness decrease due to the frequent changes in the top management, organizational structure and operational plan/team. The quality of output of MIS are governed by the quality of inputs and processes.
Need of Management Information System (MIS) : The need of MIS felt more in its absence than its presence. Very often in an organization some failure symptoms become apparent necessitating the introduction of MIS. Such failure symptoms could be: Organisation being unable to meet its commitments. Increased overtime in respect of clerical and other staff. Huge blockage in executive work-load Delayed decisions, indecisions, and wrong decisions. Non-availability of timely and relevant information. Maintenance of pocket or desk information. Loose control resulting in wastages, losses, and inefficiencies. Duplication of work and disjointed efforts.
Elements / Characteristics Of a Successful and Comprehensive Management Information System(MIS) : Economy Management orientation Flexibility Relevance Reliability Accuracy Simplicity Timeliness Conciseness Database Integrated Computerized Problem-solving
Data is the raw material from which useful information is derived. The word data is the plural of Datum. Data is commonly used in both singular and plural forms. It is defined as raw facts or observations, typically about the physically phenomenon or business transactions. Example-A sale of machine tool or automobile would generate a lot of data describing those events. Data are measurements of attributes(characteristics) of entities(such as people, place, things and events). These measurements are usually represented by symbols such as numbers, words, codes, alphabetical, It takes a variety of forms, including numeric data, text, voice and images. Data is the collection of facts, which is unorganized but can be organized into useful information.
Information: The data which has been converted into a useful & meaningful form is called information. Data are raw material resources that are processed into finished information products. Information can be defined as data that has been converted in to a meaningful and useful context for specific end users. Information may include: Its form is aggregated, manipulated and organized. Its content is analyzed and evaluated. It is placed in a proper context for human users.
Data
Information
Data refers to details , facts about any event. Data is generally disorganized and disintegrated in the form. Data is in raw form.
Data cant be understood or made use of by the users. Data does not depend upon the information.
Information refers to only those events which are concerned with entity. Information is properly arranged classified and organized. Information is in finished form. Information is understood and used by the users. Information is based upon and derived from data.
Data:
50210 Information:
5/02/10 The date of your final exam. Rs.52,010 The average starting salary of an accounting major. 52010 Zip code of state.
Data
Information
SIRIUS SATELLITE RADIO INC.
6.34 6.45 6.39 6.62 6.57 6.64 6.71 6.82 7.12 7.06
$7.20
$7.00 $6.80
Stock Price
$6.60
$6.40
$6.20 $6.00 $5.80
$5.60
1 2 3 4 5 6 7 8 9 10 Last 10 Days
Information
in Context
Information technology and quality information are not the goals, but merely to support organizations to reach goals of Superior products and services
Processing Data
Classification of Information System: (i) Based on usage of computers: (a)Manual Information system: The being is the earliest and still most prevalent form of data processor. Human being receives input data by seeing or hearing them. These data then stored in the brain, which acts as a control and logic unit. The output obtained from this type of information processing are oral or written reports and a variety of physical actions. The human mind , acting as a control and logic unit , can perform many operations on data such as adding, subtracting, multiplying , dividing, storing results, comparing two items, out putting the results in a pre arranged manner and revising the processing operations as a result of changed instructions. (b)Computer Based Information System : Computer based information system is an information system that uses computer hardware and software to perform its information processing activities. It consists of people , procedures, data, programs, and computers. It process, stores, and retrieve the data.
1.Operations Support System(OSS): Information systems need to process data generated by and used in business operations is called operation support system(OSS). Operation support system(OSS) collects, processes and stores data generated by the operations systems of an organization and produces data and information for input into a management information system or for the control of an operations system. It may be noted that operation system is a basic subsystem of the business firm that constitutes its input, processing and output components. It is also called physical system. it produces a variety of information products for external and internal use. However , they do not emphasize producing the specific information products that can be best used by the managers. Further processing by management information systems is usually required. The role of a business firms operations support systems is to efficiently process business transactions, control industrial processes, support office communications and productivity, and update corporate databases.
(a)Transaction processing System(TPS): This is one of the earliest type of information system. It produces a variety of information like customer statements, employee pay cheque, sales receipts, purchase orders, dividend cheque, tax forms, financial statements etc. transactions can be internal or external. When ABC company places an order to suppliers/vendors internal transaction occurs. When a customer places an order for a product, external transaction occurs. Further , when a company orders raw materials from the supplier, a transaction occurs then transaction system records relevant information such as: Name of supplier Address Credit rating and past experience Kind of item ordered Quality ordered Quantity to be ordered Amount to be paid
Payroll TPS
Figure 2-10
Transaction processing system contains the following steps: Data Entry: The transaction data is entered into the system using various input devices. Data validation : data validation ensures the accuracy and reliability of data by comparing actual data with pre-determined standards or known results. ExPlacing quotation. Data Processing and Revalidation : There are two ways to do process transactions as under: Online Transaction Processing(OLTP):It means instantaneous processing of data and the data input device is directly linked to the TPS and therefore the data are processed as soon as it is entered into the system. Ex-Flight reservation. Batch Processing : Under this system, transactions are accumulated over time and processed periodically. Hence processing of data take place weekly/fortnight/monthly. Validation is done before and after data is processed. Data storage : It could be stored on CD, memory of computer , hard disk or any other suitable device meant for such purpose. Output Generation : Output can be communicated to decision makers. Query Support: The last step in processing a transaction is query(asking questions of) system. Query facilities allow users to access data and information that may otherwise not be readily Available. e.g.-sales manager may query the system for the number of damaged items in a given lot.
(b)Process Control System : Process control system makes routine decisions that control operational process. For example-Automatic inventory reorder limit and production control decision, which are used in assembly line decisions. Computer automatically makes process control system decisions, adjusting a physical production process. Process control system helps to monitor a physical operation ,capture and process data selected by sensors and makes real time adjustments to the process. Example: in a petroleum refinery use sensors to monitor chemical processes. (c) Enterprise Collaboration Systems: Enterprise Collaboration Systems are system whose primary goal is to facilitate communications. Enterprise Collaboration Systems are computer based information systems that collects, process, store and transmit electronic messages, documents, and other forms of communications among individuals, work groups and organizations. Enterprise Collaboration system uses mechanical, electrical and electronic devices to enhance communication in the work place and increase the efficiency and productivity of knowledge workers and clerical workers.
Figure 2-5
MIS
Creates reports managers can use to make routine business decisions
Scheduled
reports Key-indicator reports Exception reports Ad hoc (demand) reports Drill-down reports
(b)Decision Support System : Decision Support System is a set of well-integrated, user friendly, computer based tools combine data with various decision-making models(both quantitative and qualitative) to solve semi-structured and unstructured problems. Decision support System allows the decision-makers to retrieve data and test alternative solutions during the process of problem solving. Decision support system is invariable an outcome of management information system, providing support for operational control, management control and strategic planning. Decision Support system contains following characteristics: DSS integrates data with decision-making models. DSS solves semi-structured and unstructured problems DSS supports a wide variety of decision-making processes and styles. DSS facilitates decision making under dynamic conditions.
Figure 2-7
Figure 2-6
The goal of executive information system is to provide top management with immediate and easy access to selective information about key factors that critical to accomplish a firms strategic objectives.
Expert System:
Expert System is an computer based information system in which knowledge is represented in data, In which the processing of the knowledge is directed primarily by computer programs. This system has the greatest degree of computer control. Expert system could be classified either operation information system or management information system. Although Expert systems are versatile, it can not be used everywhere. The development of systems that process the knowledge of a true human expert has proven to be difficult and expensive. It is aimed at replicating abilities of true human experts.
It contains following
components: Knowledge acquisition: This program is used by an individual who has expertise in the problem to create, add or change the knowledge base. Potential sources of knowledge include human experts, text books, data bases, special research reports and users own experiences. The Knowledge base : knowledge base is a depository of knowledge that human expert might apply to solve problem in a subject are like medicine, engineering, finance etc. the information in the knowledge base is incorporated into a computer program by a process called knowledge representation. Inference Engine : It is a section of software that determines what knowledge to apply, when and how apply it.it applies rules and other forms of knowledge in an attempt to make sequence of logical conclusions that will solve users problem. User interface : expert system contains a language professor for friendly problem oriented communications between the manager-user and the computer . This communication is best carried out in a natural language, and in some cases, it is supplemented by graphics.
Scheduled Reports
59
Key-Indicator Report
Summarizes the previous days critical activities and typically available at the beginning of each day.
Demand Report
Exception Report
Automatically produced when a situation is unusual or requires management action.
61
62
Figure 2-8
Enterprise Systems
Enterprise systems, also known as enterprise resource planning (ERP) systems, provide a single information system for organization-wide coordination and integration of key business processes. Information that was previously fragmented in different systems can seamlessly flow throughout the firm so that it can be shared by business processes in manufacturing, accounting, human resources, and other areas.
Figure 2-13
Figure 2-14
Enterprise Systems
Figure 2-15
System Transaction processing system (TPS) Management information system (MIS) Office automation system (OAS) Word processing system CAD/CAM Communication and collaboration systems (e.g., e-mail, voice mail, call centres, others) Desktop publishing System Document management system (DMS) Decision support system (DSS) Executive support system (ESS) Group support system (GSS) Expert system (ES) Knowledge work system (KWS) Neural networks, casebased reasoning Data warehouse
All employees
Description Processes an organizations basic business transactions (e.g., purchasing, billing, payroll). Provides routine information for planning, organizing, and controlling operations in functional areas. Increases productivity of office workers; includes word processing. Helps create, edit, format, distribute, and print documents. Allows engineers to design and test prototypes; transfers specifications to manufacturing facilities. Enable employees and customers to interact and work together more efficiently. Combines text, photos, graphics to produce professional-quality documents. Automates flow of electronic documents. Combines models and data to solve semi-structured problems with extensive user involvement. Supports decisions of top managers. Supports working processes of groups of people (including those in different locations). Provides stored knowledge of experts to nonexperts and decision recommendations based on built-in expertise. Supports the gathering, organizing, and use of an organizations knowledge. Learn from historical cases, even with vague or incomplete information. Stores huge amounts of data that can be easily accessed and manipulated for decision support. Gathers and uses large amounts of data for analysis by DSS, ESS and intelligent systems. Support employees who work with customers or business partners outside the physical boundaries of the organization.
Office workers Office workers Decision makers, Managers Executives, senior Managers People working in Groups Knowledge workers, nonexperts Managers, knowledge Workers Knowledge workers, Professionals Managers, knowledge workers Decision makers, managers Mobile employees