MANAGEMENT INFORMATION

SYSTEM
 UNDERSTANDING
MANAGEMENT INFORMATION
SYSTEM
INFORMATION SYSTEM

Information Management
Businesses gather information every day in the form of
invoices, proposals, daily sales, figures and time cards. This
information can provide a business insight into the operations, create
a platform for decision making and reveal ideas that feed strategy
planning. Information management requires a system that supports
the business model the information comes from.
INFORMATION SYSTEM

Data
Data found in information management systems is gathered y
hand or electronically. Documents can provide data that is then input
in the system or data can be gathered through conversation and
input directly in the system via a form. Data can be gathered using
an electronic device such as a barcode scanner that is then
downloaded into the management system.
INFORMATION SYSTEM

Tools
Software programs designed to fit the business rules and its
required document are entry points for an information system.
Hardware is needed to operate the software and can be include
large computer networks or simple single server with small number
of desktops.
INFORMATION SYSTEM

Output
Software applications allow the sorting and analyzing of
data. Output typically comes in the form of reports. Reports can be
disseminated electronically or by hand. A report can provide
information about sales figures, productions goals or even the
financial value of the business as a whole.
DATA VS INFORMATION
Data
• A “given,” or fact; a number, a statement, or an image.
• Represents something (quantities, actions and objects) in the real
world.
• The raw materials in the production of information
Information
• Data that have meaning within a context
• Data that has been processed into a form that is meaningful to
recipient
CONCEPT OF INFORMATION SYSTEM

Information system, an integrated set of components for collecting,

storing, and processing data and for delivering information, knowledge,
and digital products. Business firms and other organization rely on
information system to carry out and manage their operations, interact with
their customers and suppliers, and compete in the marketplace.
For instances, corporation use information systems to reach their
potential customers with targeted messages over the web, to process
financial accounts, and to manage their human resources.
COMPONENTS OF INFORMATION SYSTEM

1. Computer Hardware – These are microcomputers, also called

personal computers. Individuals may own multiple computers in
the form of smartphones and other portable devices.
2. Computer Software – Falls into two broad classes:
a. System Software is the operating system that manages the hardware,
data and program files, and other system resources and provides
means for the user to control the computer.
COMPONENTS OF INFORMATION SYSTEM

b. Application Software is the programs designed to handle specific task

for the users. Example include general-purpose application suites with
their spreadsheet and word-processing programs. Or an application
that schedules, routes, and tracks package deliveries for an overnight
carrier.
COMPONENTS OF INFORMATION SYSTEM
3. Telecommunications are used to connect, or network, computer systems and
transmit information. Connections are established via wired or wireless
media. For example, sensors such as radio frequency identification devices
(REFIDs) can be attached to product moving through supply chain to enable
the tracking of their location and monitoring their condition.
COMPONENTS OF INFORMATION SYSTEM
4. Databases and Data Warehouses
A database is collection of interrelated data (records) organized so that
individual records or groups of records can be retrieved to satisfy various
criteria. Typical examples of databases include employee records and product
catalogs.
Data warehouses contain archival data, collected over time, that can
be mined for information in order to develop and market new products, serve
the existing customers better, or reach out to potential new customers.
COMPONENTS OF INFORMATION SYSTEM
5. Human Resources and Procedures
Qualified people are a vital component of any information system.
Technical personnel include development and operations managers, business
analysts, system analysts and designers, database administrators, computer
programmers, and computer security specialist.
Procedures for using, operating, and maintaining an information system are
part of its documentation. For example, procedures need to be established to
run a payroll program, including when to run it, who is authorized to run it, an
who has access to the output.
TYPES OF INFORMATION SYSTEMS
Information system support operations, knowledge work, and management
in organization and it is differ in their business needs. Also depending upon
different levels in organization information system differ.
Three Major information systems are:
1. Transaction Processing System
2. Management Information System
3. Decision Support System
TRANSACTION PROCESSING SYSTEM
TPS process business transactions of the organization. Transaction can be
any activity of the organization and differ from organization to organization.
Basic business systems that serve the operational level.
This provides high speed and accurate processing of record keeping of
basic operational process. These include calculation, storage, and retrieval.
TPS provide speed and accuracy, and can be programmed to follow
routines functions of the organization.
MANAGEMENT INFORMATION SYSTEM*
These system assist lower management in problem solving and making
decisions. They use the results of transaction processing and some other information
also. It is a set of information processing functions. It should handle queries as
quickly as they arrive. An important element of MIS is database.
Serve middle management, provide reports on firm’s current performance
based on data from TPS, and typical have little analytics capability.
*** Database is a non-redundant collection of interrelated data items that ca be
processed through application programs and available to many users.
DECISION SUPPORT SYSTEM
These system assist higher management to make long term decisions. These
type of system handle unstructured or semi structured decisions. A decision is
considered unstructured if there are no clear procedures for making the decision.
Support non-routine decision making, e.g. “What is impact of production
schedule if December sales doubled?” and output in form decision analysis.
MANAGEMENT INFORMATION
SYSTEM
MANAGEMENT

The word “management” identifies a special group of people

whose job is to direct the effort and activities of other people
toward common objective.
Management is the process of coordinating work activities so
that they are completed efficiently and effectively with and through
other people.
INFORMATION

Information is data that has been manipulated to be useful to

someone and must have value.
Information tells people something they don’t already know or
confirms something that they suspect.
SYSTEM

A system is a group of interrelated components working

together toward a common goal by accepting inputs and producing
output in an organized transformation process. Computed-based
Information System take data as raw material, process it, and
produce information as output.
CHARACTERISTICS OF A USEFUL SYSTEM

• A system is a whole.
• Components of a system interact.
• Systems are goal seeking.
• System have input and output.
• System must be controlled.
• System forms a hierarchy.
• System exhibit differentiation.
DEFINITION OF MIS

The elementary conviction of MIS were to process data from

organization and present it in the form of reports at regular intervals.
MIS is prevalently demystified as the Information System, the
Information and Decision System, the Computer-based Information
System.
DEFINITION OF MIS
The MIS has more than one definition, some of which are given here:
• The MIS is defined as the system that provides information support for decision
making in the organization.
• The MIS is defined as an integrated system of man and machine for providing the
information to support the operations, the management and the decision making
function in the organization.
• The MIS is defined as the system based on the data base of the organization
evolved for the purpose of providing information to the people in the
organization.
• The MIS is defined as a computer-based information system.
• MIS is system of collecting, processing, storing, disseminating and utilizing data in
the form of information needed to carry out the functions of management.
DEFINITION OF MIS
Today, the term is used broadly in a number of contexts and includes (but is not
limited to):
• Decision support system,
• Resource and people management applications,
• Enterprise Resource Planning (ERP),
• Supply Chain Management (SCM),
• Customer Relationship Management (CRM),
• Project Management and Database Retrieval Application.
IMPORTANCE OF THE MIS
MIS not only include software systems, but the entire set of business processes and
resources that are used to pull together information from functional or tactical system.
Data is then presented in a user-friendly and timely manner so the mid and upper level
managers can use it to take the right actions.

Organizations have multiple functional systems. These usually include sales systems,
call center systems, financial systems, inventory systems and more. MIS combines
information from multiple systems.

MIS is not necessarily a specific combination of functional systems, but instead is

created based upon the business need. Customer Relationship Management (CRM)
systems combine data that relates directly to the customer experience. Enterprise
Resource Systems (ERP) combine data used in the entire sales process. Decision Support
Systems or Data Warehouse often combine summary data from multiple system.
IMPORTANCE OF THE MIS
Thus, the following points can summarize the importance of MIS:
• It helps in minimizing risk in decision making.
• It processes the data and derives information out of them.
• It provides information about the various aspects of business.
• It helps the executives to avail the information regarding the functional area quickly.
• The database helps in inducting research. The data stored are used as secondary data.
• It provides sound information regarding the financial health of the business organization.
• It helps in preparing corporate report.
• It helps the HRD manager in finding out the requirement of the human resource, their
wages and salary, performance appraisal, training, promotions, absenteeism and
employee’s turnover, which is used in drafting company policies.
• The data regarding production helps the production manager in decision regarding
about capacity utilization, number of rejections per batch, status of shipment or
processed order and product.
• It provides information regarding inventory position, and ensures that chance of inventory
out of stock may be minimized.
• It provides information regarding product , price, promotion, segments, demands, sale etc.
OBJECTIVE OF THE MIS
When any organization wishes to establish the MIS. It must be very clear about the need of
information required by different levels of management. Following are the reasons for the
adoption of the MIS:
• To provide information for planning, organizing and controlling purposes.
• To store and manage data efficiently from all functional areas of the business.
• To provide information quickly as and when required.
• To reduce the risk and uncertainties in the managerial decision-making.
• To collect and store data for the purpose of internal research.
• To assist in identifying the managerial problems and their solutions.
• To provide information regrading production and inventory.
• To provide information sales and other marketing aspects i.e. product price, promotion, market,
physical distribution, payment collection, market, etc.
• To speed up execution of the results with the reliable data available.
• To provide the information regarding work force planning.
• To smooth up the flow of data through various levels of organization.
IMPACT OF THE MIS
Management Functions
MIS facilitates effective management marketing, finance, production and personnel. It eases the
tracking and monitoring of the functional targets. The functional management is informed about the
progress, achievements, and shortfalls in the activity and the targets. It helps in forecasting and long-term
perspective planning.

Understanding Business
MIS uses the dictionary of data, entity and attributes. Respectively, designed for information
generation in the organization. Since all information systems use the dictionary, there is common
understanding terms and terminology in the organization delivering clarity in the communication and a
similar understanding of an event in the organization.

Systemization of Business Operations

MIS leads to streamlining the operations, which complicate the system design. It improves the
administration of business by bringing a discipline in its operations, as everybody required to follow and
use the systems and procedures.
 MIS STRUCTURE
BASED ON ORGANIZATION FUNCTIONS
The structure of MIS can be described in terms of organizational functions which
makes use of information. MIS is typically an integrated combination of functional
information systems that designed to meet the requirements of functional
subdivisions of an organization.

• FUNCTIONAL SUBSYSTEM
• Production Subsystem – production info system support the production function which
includes all the activities concerned with the planning and control of the processes
that produce goods and services. In production subsystem there are transaction
processing, operation control, managerial control and strategic planning.
• Marketing Subsystem – marketing is another important function of an organization.
Its function to the organization is concerned with the planning, promotion and sale of
existing products in markets and the development of e products. MIS help to analyze
for different products in different regions and its mainly concerned with the
marketing right product to target customers.
 MIS STRUCTURE
BASED ON ORGANIZATION FUNCTIONS
• HUMAN RESOURCE SUBSYSTEM
The HRM function is concerned with the recruitment, placement, compensation
and development of employees in an organization. It mainly helps in record
keeping and employee evaluation.

• FINANCE AND ACCOUNTING SUBSYSTEM

Financial subsystem undertakes the function of arranging adequate finance to
business at min cost. This functions includes granting credit to the customers, cash
management and financial arrangement. Accounting info system record and report
the flow of funds through organization on a historical basis and prepares important
financial statements like profit and loss account and balance sheet.
 MIS STRUCTURE
BASED ON ORGANIZATION FUNCTIONS
• LOGISTICS SUBSYSTEM
The logistic subsystem includes activities like purchasing, receiving, inventory
control and distribution. The transactions to be processed are purchased requisitions,
manufacturing orders, receiving reports and shipping orders.
 PHYSICAL STRUCTURE OF MIS
A MIS is an organized system which consists of people, hardware, and communication
networks and data sources that collects, transforms and distributes information in an
organization.
HARDWARE
Hardware consists of all physical components of a computer system like central
processing unit (CPU), input devices, output devices, storage and communication devices.
SOFTWARE
Software is an interface between the information system and users of information
system. Software can be of two types’ system software and applications. The system software
includes the operating system and special purposes programs. Application is developed to
achieve a specific task. Software plays an important part in MIS.
 PHYSICAL STRUCTURE OF MIS
DATABASE
A database is a centrally managed and organized collection of data. Database helps
to store data in an organized manner and to make available to those who need that data.
Database helps to reduce duplication of data as it is centrally managed data one data can be
store at one place avoiding redundancy and duplication of data.

PROCEDURES
Procedures are essential for effective use of information system. Procedures consist of
various instructions like user instructions, instructions for input preparation and operating
instructions. These instructions help in using information system effectively.

PERSONNEL
Number of personnel is required for implementation of MIS like computer operators,
programmers, systems analysts and managers. Human beings are key requirements for
implementation of MIS. In MIS both technical and managerial level people are required for
proper implementation of MIS.
 APPLICATION OF MIS
APPLICATION IN MARKETING
1. Order Processing System – Computerized order processing system captures sales orders
from customers and processes the orders for further actions. It checks the inventory
availability, pending orders, production details etc. before accepting customers order
and generates sales order reports.
2. Sales Management System – Computerized sales management system uses data from
sales order processing system to generate various sales related reports. This system
supports account management, direct marketing, sales forecasting and sales
presentations.
3. Logistics Management – The physical distribution is a major activity of marketing
functions. It uses computer based OR models to find optimum location, warehouses,
shipment routes, quantity to be transported and stocked etc.
4. Consumer Research – Computerized transaction processing system captures huge
quantity of data about customers and their buying pattern etc. It use to generate vital
information about customer behavior.
 APPLICATION OF MIS
APPLICATION IN FINANCE
1. General Ledger – The main use of a MIS in finance is that it automatically updates all
the transactions in the General Ledger. Financial transactions are simultaneously posted
on the various accounts that comprise the organization’s “Chart of Accounts”
2. Cash Management – It refers to the control, monitoring and forecasting of cash for
financing needs. Use of MIS in finance helps companies track the flow of cash through
accounts receivable and accounts payable accurately.
3. Budget Planning – Financial budget planning uses perform a or projected financial
statements that serves as a formal documents of management’s expectations regarding
sales, expenses and other financial transactions.
4. Financial Reporting – The use of MIS system in Finance enables companies to generate
multiple financial reports accurately and consistently.
5. Financial Modeling – A financial model is a system that incorporates mathematics, logic
and data in the form of a large database. This model is used to manipulate the
financial variables that affects the earnings.