MANAGEMEN

T
INFORMATIO
N SYSTEM
Information
System
 Information
System
An information system (IS) collects, processes, stores,
analyzes, and disseminates information for a specific
purpose “Application”.

• Hardware
Hardware
• Software
Software
• Data Application
• Network Data
People
• Procedures
• People
3
Information System
Resources

(Management) Information Systems 4

Different information for different users
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR
MANAGERS

MANAGEMENT LEVEL MIDDLE

MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE &

DATA WORKERS

OPERATIONAL
OPERATIONAL LEVEL
MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
MARKETING RESOURCES
 Information System -
Classification By Support Function
•5-year sales trend
•Profit Planning
•5-year budget forecasting
Executive Support •Product development

System
•Sales Management
•Inventory Control
Management Information •Annual budget
System •Production Scheduling
Decision Support System •Cost Analysis
•Pricing Analysis
Intelligent Support Systems
•System support
•Word Processing
Knowledge Management •Desktop Publishing
System
Office Automation System
•Order Processing
•Fulfillment
•Material Movement
Transaction Processing •A/R, A/P, GL
System •Payroll
•POS
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Types of Information
0

Systems
Management Information System (M.I.S.) is basically
concerned with processing data into information.
Which is then communicated to the various
Departments in an organization for appropriate
decision-making.
Data Information Communication Decisions
Data collection involves the use of Information
Technology (IT) comprising: computers and
telecommunications
networks (E-Mail, Voice Mail, Internet,
telephone, etc.)
Computers are important for more quantitative,
than qualitative, data collection, storage and
retrieval; Special features are speed and accuracy,
 Management Information
Systems
Function: (MIS)
Produce reports
summarized from transaction data,
usually in one functional area.
Example: Report on total sales of
each customer.
Supports: Primarily for middle
managers, sometimes for lower
MANAGEMENT LEVEL
• INPUTS: HIGH VOLUME DATA
• PROCESSING: SIMPLE MODELS
• OUTPUTS: SUMMARY REPORTS
• USERS: MIDDLE MANAGERS
 Management Information Systems
(MIS)
Feature
s:DECISIONS
• STRUCTURED & SEMI-STRUCTURED

• REPORT CONTROL ORIENTED

• PAST & PRESENT DATA
• INTERNAL ORIENTATION
• LENGTHY DESIGN PROCESS
 Characteristics of a
Management Information
System
• Provides reports with fixed and
standard formats
– Hard-copy and soft-copy reports
• Uses internal data stored in the
computer system
• End users can develop custom
reports
• Requires formal requests from users
 INTERRELATIONSHIPS AMONG

Finance and
FAS accouting

Managem
ent
MIS HRS Human
informati
Resourc
e

Manufacturi MPS Sales

SMS
ng and and
production marketin
 An Organization’s
MIS

Financial
MIS
Business
transactions
Drill down reports
Accounting
Transactio Databases MIS Exception reports
n of
processing Demand reports
valid
systems transactions Key-indicator reports
Marketing
MIS Scheduled reports

Business
transactions Databases Human
of Resources Etc.
external MIS
data
Etc.
 Employees

Corporate
Databases Corporate
databases
of intranet
of
external
internal
data
data Decision
support
systems

Transaction Managemen Executive

Databases
Business processing of t Application support
transactions systems valid information databases systems
transactions systems

Drill-down reports Expert

Exception reports systems
Demand reports
Operational Key-indicator reports
databases
Input and Scheduled
error list reports
 Schematic of MIS
Marketing Manufacturin
managemen g
t management
information Information
system system
Common
databases
Financial Order
managemen managemen
t t
Information information
system system
TPS
 Risks Associated With
MIS
Risk reflects the potential, the likelihood, or the expectation of events
that
could adversely affect earnings or capital. Management uses MIS to
help in
the assessment of risk within an institution. Management decisions
based
upon ineffective, inaccurate, or incomplete MIS may increase risk in a
number
of areas such as credit quality, liquidity, market/pricing, interest rate,
or foreign
currency. A flawed MIS causes operational risks and can adversely
affect an
organization's monitoring of its fiduciary, consumer, fair lending,
Bank Secrecy
Act, or other compliance-related activities.
Since management requires information to assess and monitor
performance at
Assessing Vulnerability
To MIS Risk
To function effectively as an
interacting, interrelated, and
interdependent feedback tool
for management and staff,
MIS must be "useable." The
five elements of a useable
MIS system are:
Timeliness:
To simplify prompt decision making, an
institution's MIS should be capable of
providing and distributing current
information to appropriate users.
Information systems should be
designed to expedite reporting of
information. The system should be
able to quickly collect and edit data,
summarize results,
and be able to adjust and correct
Relevance:
Information provided to management
must be relevant. Information that is
inappropriate, unnecessary, or too
detailed for effective decision making
has no value. MIS must be
appropriate to support the
management level using it. The
relevance and level of detail provided
through MIS systems directly
correlate to what is needed by the
board of directors, executive
management,
Accuracy:
A sound system of automated and
manual internal controls must exist
throughout all information systems
processing activities. Information
should receive appropriate editing,
balancing, and internal control
checks. A comprehensive internal
and external audit program should
be employed to ensure the
Consistency
To be reliable, data should be processed and
compiled consistently and uniformly.
Variations in how data is collected and
reported can distort information and trend
analysis. In addition, because data
collection and reporting processes will
change over time, management must
establish sound procedures to allow for
systems changes. These procedures should
be well defined and documented, clearly
communicated to appropriate employees,
and should include an effective monitoring
system.
Completene
ss
Decision makers need complete and
pertinent information in a summarized
form. Reports should be designed to
 An Overview of Management
Information Systems:

• A management information system

(MIS) provides managers with
information that supports effective
decision making and provides
feedback on daily operations
• The use of MISs spans all levels of
management

Fundamentals of Information Systems, Third Edition 23

 Inputs to a Management
Information System
• Internal data sources
– TPSs and ERP systems and related
databases; data warehouses and data
marts; specific functional areas
throughout the firm
• External data sources
– Customers, suppliers, competitors, and
stockholders, whose data is not already
captured by the TPS; the Internet;
extranets
Fundamentals of Information Systems, Third Edition 24
 Outputs of a Management
Information System
• Scheduled report: produced
periodically, or on a schedule
• Key-indicator report: summary of the
previous day’s critical activities
• Demand report: developed to give
certain information at someone’s
request
• Exception report: automatically
produced when a situation is unusual or
requires management action
• Drill-down report: provides
increasingly detailed data about a
Fundamentals of Information Systems, Third Edition 25
 Functional Aspects of the
MIS
• Most organizations are structured
along functional lines or areas
• The MIS can be divided along
functional lines to produce reports
tailored to individual functions

Fundamentals of Information Systems, Third Edition 26

Functional Aspects of the MIS
(continued)

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 Financial Management
Information Systems
• Financial MIS: provides financial
information to all financial managers
within an organization
• Profit/loss and cost systems
• Auditing
• Uses and management of funds

Fundamentals of Information Systems, Third Edition 28

29
 Manufacturing Management
Information Systems
• The manufacturing MIS subsystems
and outputs monitor and control the
flow of materials, products, and
services through the organization
• Design and engineering
• Production scheduling
• Inventory control

Fundamentals of Information Systems, Third Edition 30

31
 Marketing Management
Information Systems
• Marketing MIS: supports
managerial activities in product
development, distribution, pricing
decisions, promotional effectiveness,
and sales forecasting
• Marketing research
• Product development
• Promotion and advertising
• Product pricing
Fundamentals of Information Systems, Third Edition 32
Human Resource Management
Information Systems
• Human resource MIS: concerned with
activities related to employees and
potential employees of an organization
• Needs and planning assessments
• Recruiting
• Training and skills development
• Scheduling and assignment
• Employee benefits
• Outplacement

Fundamentals of Information Systems, Third Edition 34

Order Management Information
System
• This software facilitates the entering of an
order, whether via a web-site shopping cart
or a data entry system (for orders received
via phone and mail). It typically captures
customer proprietary information and
account level information. Credit verification
or payment processing is done to check for
validity and/or availability of funds. Once
entered, valid orders are processed for
warehouse fulfillment, such
picking/packing/shipping.
• Orders can be received from businesses,
consumers, or a mix of both, depending on
the products. Offers and pricing may be
done via catalogs or web sites or
 An integrated order
management system may
encompass these modules:
• Product Information (descriptions, attributes, locations,
quantities)
• Inventory Availability (ATP) and Sourcing
• Vendors, Purchasing, and Receiving
• Marketing (Catalogs, promotions, pricing)
• Customers and Prospects
• Order Entry and Customer Service (including Returns and
Refunds)
• Financial Processing (credit cards, billing, payment on
account)
• Order Processing (selection, printing, picking, packing,
shipping)
• Data Analysis and Reporting
• Financials (Accounts Payable, Accounts Receivable,
General Ledger)
Other Management Information
Systems
• Accounting MIS: provides
aggregate information on accounts
payable, accounts receivable,
payroll, and many other applications
• Geographic information system
(GIS): capable of assembling,
storing, manipulating, and displaying
geographic information

Fundamentals of Information Systems, Third Edition 38

A Comparison of DSS and
MIS

39
 Managing Information Systems

• Information Systems (IS) have enormous strategic value

so when they are not working even for a short time, an
organization cannot function. Furthermore, the Life Cycle
Costs (acquisition, operation, security, and maintenance)
of these systems is considerable. Therefore, it is essential
to manage them properly. The planning, organizing,
implementing, operating, and controlling of the
infrastructures and the organization’s portfolio of
applications must be done with great skill.
• The responsibility for the management of information
resources is divided between two organizational entities:
– The information systems department (ISD), which is a corporate
entity
– the end users, who are scattered throughout the

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 CLASSIFICATION OF MIS
REPORTS
MIS reports can be classified into two
types:

1) CONTENT
2) TIME