mics

1. MANAGEMENT INFORMATION &
CONTROL SYSTEM
 CONCEPT OF MIS :
 Initial Concept was to process data & present it in the
form of reports at regular intervals.
 Concept was modified with distinction made between
Data & Information.
 Concept is similar to Raw Material (Input) & Finished
Product (Output) System Concept of MIS.
 Another Concept is : Data is one but can be viewed by
different people in different ways.
 Concept of Database & The MIS based on the Database
is more effective. 1

2.  Gradually the concept of End User Computing using
Multiple Database emerged this give Decentralisation of
MIS System.
Analysis of Data relies on many academic discipline.
This includes : Operation Research / Management
Accounting / Human Behaviour / Psychology etc. making
MIS more meaningful .
 The academic disciplines are used in designing the MIS.
 The Foundation of MIS is the Principles of Management
& its Practice.
 The concept therefore is a blend of Principles, Theories
& Practices of the Management, Information & Systems.
2

3.  DEFINITION OF MIS :
 MIS can be defined as a system that
3) Provides information to Support Managerial Functions
like Planning, Organising, Directing, Controlling etc.
4) Collects information in a systematic & routine manner
which is in accordance with a well defined set rules.
5) Includes Files, Hardware, Software & Operation
Research Models & Process, Storing, Retrieving &
Transmitting information to users.
 MIS has more than one definition :
• A system which provides information support to the
3
organisation.

4. • A system based on the Database of the organisation
evolved for the purpose of providing information to the
people of the organisation.
• It is a computer based information system.
 All above definitions converge to one single point :
The MIS is a system to Support The Decision
Making Function in the Organisation.
4

5.  ROLE OF MIS IN AN ORGANISATION :
 Role of MIS can be compared to the Role of Heart in the
Body.
 Ensures appropriate data is collected from the various
sources, process & sent to all the needy destinations.
 The system is expected to fulfill information needs of an
individual, group of individual, the various management
levels.
 The MIS satisfies the diversified need : Through variety
of systems, such as:
- Query Systems
- Analysis Systems
- Modelling Systems
- Decision Support Systems 5

6.  MIS helps in Strategic Planning, Management
Controls, Operational Controls, Transaction Processing
etc.
 MIS helps in Transaction Processing & answers their
Queries on the Data pertaining to the Transaction,
Status of a particular record & reference on variety of
documents.
 MIS helps Junior Management, by providing
Operational Data for Planning, Scheduled & Control &
helps further in decision making at the Operational
Level.
6

7.  MIS helps Middle Management in Short Term
Planning, Target Setting & Controlling the Business
Functions.
 MIS helps Top Management in Goal Setting, Strategic
Planning & Evolving Business Plans & their
Implementation.
MIS plays the Role of Information Generation,
Communication, Problem Identification &
Decision Making.
Thus MIS plays a vital role in the Management,
Administration & Operations in the organisation.
7

8.  IMPACT OF MIS :
 MIS impacts organisations functions, performance &
productivity.
 With proper MIS support, the Management of
Marketing, Finance, Production & Operation &
Personnel becomes more effective.
 MIS calls for systematisation of Business Operation for
effective system design.
 This leads to streamlining the operation improves
administration by bringing in discipline as everybody is
required to follow & use systems & procedure.
Helps the organisation towards Process Driven &
8
Not Person Dependent.

9.  Brings in High degree of professionalism in Business
operations.
 A well designed MIS with a focus on the Manager
makes an impact on the managerial efficiency &
motivates him to resort to such exercises as
Experimentation & Modelling.
 The use of computers enables the Manager to use tools
& techniques which are impossible to use manually.
Example : Forecasting New trains (Rly Traffic Mgt).
 MIS works on the basic systems such as Transaction
Processing & Database to transfer the drudgery of
clerical work to a computerised system.
9

10.  Wastage of Time in Searching, Processing,
Communicating is eliminated.
MIS reduces overhead & creates information based
culture in the organisation.
 MIS & COMPUTER :
 Transforming the concept of MIS to reality is possible
only with Computer.
 Variety of HW Technology enables designing of MIS to
specific situation.
Example : Organisation with multiple locations use
satellite communication over long distance.
10

11.  Ability of H/W to store Huge Data, Process at High
Speed converting to information & Easy Access, Sort &
Merge data in a particular manner, Complex, lengthy
Analysis – done very effectively.
 Computer is capable of digital, graphic, word, image
processing etc. so it is used to generate information &
present in a easily understandable form (Bar Chart, PIE
Chart etc.)
 Computer provides security of information (R/W, Read
only, Access Control etc.) so it provides safe handling of
sensitive information.
11

12.  S/W is an Integral Part of MIS & with development of
ICT (Information & Communication Technology) has
made distance, speed, volume & complex computing an
easy task.
Application of Management Principles in todays
complex business world is possible only when MIS is
based on a Computer System Support.
 MIS & ACADEMICS :
 MIS draws a lot of support from other academic
disciplines.
 Foundation of MIS is Management Theory.
 MIS uses Principles of Management Designing the
system & gives due regard to organisational behaviour.
12

13.  While designing the MIS report format & forming
communication channel, MIS takes into account
behaviour of the manager as an individual & in a group.
 MIS gives due regard to personal factors such as BIAS,
Thinking with a Fixed Frame of Mind, Risk Aversion,
Strength & Weakness.
 MIS is a decision support system & uses other areas of
academics such as : -
- Operations Research
- Queing Theory
- ERP
- Network Theory etc. used for planning -
Controlling Large Project. 13

14.  Application of PERT/CPM to a project planning &
monitoring is possible through computer system easily.
 While designing the MIS reports, attention is paid to
avoid noise, distortion related to information.
 MIS relies heavily on decision theory & decision
methodology. Example : (Payoff Matrix)
 MIS handles, with Mathematical Modelling Techniques,
decision making under risk & uncertainty.
 In the area of Accounting applications, MIS uses
accounting principles & ensures data is correct & valid.
14

15. Example : It uses principles of double entry in book
keeping for balancing the accounts – It uses accounting
methodology for generating trial balance, balance sheet &
other books of accounts.
MIS uses knowledge from Management, Business
Management, Mathematics, Accounting,
Psychology, Communication Theory, Operations
Research, Probability Theory, etc. for building
process, methods & DSS systems in designing
business applications.
15

16.  MIS & THE USER :
 Every person in the organisation is user of MIS &
different category of users have different information
needs.
 Each level of user has a specific task or role &
corresponding informations need.
Example : Need of information of a Clerk, Executive,
Manager (Operational, Middle or Top Level).
 It is observed that at lower level, MIS gives a sense of
insecurity. MIS takes away the drudgery of repetitive
search, collection, preparing statements & submitting to
higher level.
16

17.  Work vacuum so created is not easily filed up. Thus
crating a sense of insecurity & loss of importance of the
person.
 Positive aspect is clerk can make a quick search.
 At the level of an Officer/Executive of MIS does the
role
of Data Analysis in a predetermined manager. This
means knowledge of business is transferred from an
individual to the MIS & made available to all in the
organisation.
Concept of information is power with individual is
Lost. 17

18.  The Psychological impact is higher, if the person is not
able to cope up with change by expanding or enriching
his job.
 The Middle Level Manager or Top Level Suffers the
fear of challenge & exposure. The MIS makes his
computer more effective. He is afraid of his position,
decision & defence will be challenged.
However above negative points are seen in few
cases & the positive impact at all levels are they
become more effective operators.
18

19. Through the MIS, the information can be used as a
strategic weapon by the user to counter the threats
in business & make business more competitive, bring
about organisational transformation through integrated
approach.
A good MIS makes organisation seamless by
removing communication barrier.
 PROCESS OF MANAGEMENT & MIS AS A
TOOL FOR THE MANAGEMENT PROCESS :
 Process of management starts with setting of Goals,
Objectives & Targets.
 GOALS : Are long term objectives to be achieved by
the organisation. 19

20.  OBJECTIVES : Are relatively short term milestones to
be accomplished.
 TARGETS : Generally refer to physical achievements
in the organisations business.
 Goals, Objective & Targets are so set that they are
consistent with each other & help to achieve each other.
 PROCESS OF MANAGEMENT :
1. PLANNING : Basic to all management functions. It is
a decision making process determining in advance,
What to do, How to do, When to do, Who has to do?
20

21.  Efficiency of planning is measured by the amount it
contributes towards achievement of goals, with less
investment or with less resources. (This is managerial
effectiveness)
“MIS helps the Manager in Planning Process”
2. ORGANISING : Important step in the management it
relates to the people in the organisation.
 It deals with qualitative & quantitative role play,
relationship etc.
 Organising Involves:-
- Defining various Management Levels & Span of
control.
- Defining Departments. 21

22. - Relationship of Line & Staff Function.
- Delegation of Authority.
3. STAFFING : Deals with creation of HR in the
enterprise to achieve goals, objectives & targets set
by the management.
4. CO-ORDINATING & DIRECTING :
 After organising the resource, staffing planning, the
process of implementing is dynamic.
 The process meets with a number of difficulties & the
Manager is supposed to resolve them. There will be
LAG & LEAD in many activities. There could be short
fall & over runs. There could be sudden developments,
which may disturb the plans & Process of implementation.
22

23.  Managers role in this situation is to co-ordinate all the
activities & provide leadership in the group to keep the
Plan Moving.
“MIS plays a major role in this Management
Process”
5. CONTROLLING : The last but the most important step
in Management Process.
 Control system works on the principle of feedback.
 With advanced ICT, a variety of planning & control
tools have been developed.
23

24.  MIS AS A TOOL FOR MANAGEMENT PROCESS :
 The various processes of management require lot of data
& information.
 The requirement arises due to the fact that each step of
management , variety of decisions are taken to correct
the course development.
 The decisions or actions are prompted by the feedback
given by the control system of MIS.
 The control of overall performance is made possible by
way of budget summary & MIS report.
 The MIS report showing sales, expenditure, ROI etc.
Throws light on the direction the organisation is moving.
24

25.  Exception reports identify weakness in the management
system.
If effective management system is to be assured it
has to be based on PROMPT business information.
Management performance improves in the business
risks & uncertainties are handled effectively with
adequate information.
 A good MIS provides information to the managers to
expand their knowledge base. He must know the adverse
trends in business, the shortfalls of failures in the
management process.
 A good MIS highlights the critical success factors &
supports key areas of management. 25

26. Modern fiercely competitive business scenario
needs handling of business operations with skills
& foresight to avert crisis & relies heavily on MIS.
 ORGANISATION AS A SYSTEM & MIS :
 A system is an assembly of elements arranged in a
logical order to achieve certain objectives.
 Organisation is viewed as a socio technical system
consisting of sub system of people, task, technology,
culture & structure.
 Organisation continuously exchange information with
environment & is influenced by the changes.
Accordingly organisation has to be built in such a fashion
that it adjusts with changes in environment & the goals &
objectives are satisfied – OPEN SYSTEM. 26

27. MIS should be designed viewing the organisation as
a system.
MIS should give due importance to the human side of
the organisation & its culture. Task & technology are
physical aspects of the organisation but culture & people
are very difficult to assess from MIS design point of view.
MIS & ORGANISATION :
 In a vertical structure with high degree of centralisation,
MIS should give control information to the higher
management where decision is centred.
 If the organisation structure is based on a functional basis
(Horizontal span of control, where functional head is key
decision maker & all functions are equally importance than
MIS will have a functional design with information support
to functional head. 27

28. MODIFIED MODEL OF
ORGANISATION SYSTEM
TASKS
PEOPLE STRUCTURE
GOALS
TECHNOLOGY CULTURE
28

29. STRATEGIC MANAGEMENT OF
BUSINESS & MIS
 CONCEPT OF CORPORATE PLANNING :
 Plan is a predetermined course of action to be taken in
future.
 Goals & objectives that a plan is supposed to achieve are
the pre-requisites of a plan & setting of goals & objectives
are primary task of management.
 Planning is a dynamic process involving chain of
decisions.
 Essence of planning is to see the opportunities & threats
in
future & predetermine course of action to convert
opportunity to business gain & meet the threat to avoid29

30.  Planning can be Long Range or Short Range.
 Long Range Planning : Is for 5 years or more.
Deals with growth, Rate of growth & Image business
share etc.
 Short Range Planning : Is for 1 year at the most.
Concerned with attainment of the business result for the
year.
 Goals relate to long term planning.
 Objectives relate to short term planning.
 “Corporate Business Planning deals with Corporate
Business Goals & Objectives”.
30

31.  Corporate plan considers the world trends in the
business, the industry, the technology, the international
markets, the competitors, the corporate strength &
weakness etc. & is a complex exercise to steer the
company through difficulties, uncertainties etc.
 ESSENTIALITY OF STRATEGIC PLANNING :
 Why strategic planning?
7. Market Forces
8. Technological Change
9. Complex Diversity of Business
10. Competition
11. Environment (Threats, Challenges, Opportunities)
31

32. • Market Forces : Unpredictable demand & supply /
trends in market growth / consumer behaviour &
choices / new products & concepts
- The Market force effect sales, growth & profitability.
- A proper business plan is needed to counter these.
2. Technological Changes : New technology worldwide
have threatened current business creating new
opportunities. Example : Electronics Industry.
- Absence of a corporate plan, such new technology
change can bring about threats of survival or loss of
opportunity.
32

33. 3. Complex, Diversity of Business : The scope of business
is wide & the variety of products, different market
segments, manufacturing methods, multiple locations,
dependence on external factors such as transport etc. bring
complexity in the management of business.
Many factors are uncontrollable & unless there is a plan,
considering above diversity, management lead to loss of
business opportunity.
4. Competition : This is a natural phenomenon in business
& management should continuously evolve new strategies
to deal with competition.
5. Environment : This is beyond the control of management
forecasting probable environmental changes is a major task
of corporate planning. 33

34. DEVELOPMENT OF BUSINESS STRATEGY
 LONG RANGE STRATEGY :
 Like any other business activity, planning also has a
process & methodology.
 Corporate planning is a top management responsibility.
* It starts with social responsibility
- Spells out business mission & goals,
- & Strategies to achieve them.
STEP –1 : Communicate to all, the social & economic
responsibility of the organisation (Mission Statement) :
Direction of the organisation – decides scope & boundary
of the business.
34

35. STEP – 2 : Set goals of the organisation.
The goal is more specific & time span of 3-5 years.
Describes certain business aspects such as : Largest
market share / Leader in industry / Dominent in some
product / Service / Reach & distribution etc.
Goals become a reference for top management
in planning the business activities.
STEP – 3 : Set various objectives of the organisation
objectives are are defined in terms of business results
to be achieved in a short duration of a year or two.
Objectives are measurable & can be monitored
(Profitability, Sales, Quality Standard, Capacity
Utilisation etc.)
When achieved, objectives will contribute to
35
he accomplishment of goals & subsequent mission.

36. STEP – 4 : Set Targets : for more detailed working &
reference for operations.
 The success in achieving the goals & objectives is directly
dependant on the management business strategies.
 Business is like a war where two or more competitors are
set against each other to win & are constantly in search of a
strategy to win.
“It enabled MIS is a strategic business weapon for
growth & survival”.
 Strategy means : The manner in which the resources
(Man, Material, Money) & the know how will be put to use
over a period to achieve goals.
“The game is to evolve strategies & counter strategies
& counter strategies to win”. 36

37.  STRATEGY FORMULATION :
Strategy formulation is an unstructured exercise of
complex nature riddled with uncertainties.
 TYPES OF STRATEGIES :
A strategy means a specific decision(s) regarding
deployment of resources to achieve the missions or
goals of the organisation.
Strategy can be classified into four broad classes : -
1. Overall company strategy : Very long term &
deals with overall strength on organisation.
2. Growth Strategy : May be for existing business
or diversification.
3. Product Strategy : Choice of a product which can
expand as a family of products. 37

38. 4. Market Strategy : Deal with distribution / Services /
Market Research / Pricing / Advertising / Packing or
Choice of Market Itself.
- There are no way of predicating selection of correct
strategy – only results can prove.
 TOOLS OF PLANNING :
Are tools of decision making with reference to planning.
These tolls systems approach, sensitivity analysis &
modelling.
 MIS & BUSINESS PLANNING :
1. Decide goals & objectives.
2. Determine correct status of business & projects.
3. Provide correct focus for management action attention.
38

39. 4. Evolve, Decide the Mix of Strategies.
5. Evaluate Performance & Give Feedback.
6. Provide Cost / Benefit Evaluation.
7. Generate Standards / Norms / Ratio’s / Yardstick for
Measurement & Control.
 SHORT RANGE PLANNING :
 Short Range Planning deals with targets & objectives of
the organization & provides implementation plan.
 Plans are made for one year in terms of TARGETS to be
achieved within a BUDGET.
 A manufacturing co. will make targets for production,
sales, capacity etc. 39

40.  Budget gives details of resources required to achieve
target. Budgets are prepared first in terms of
PHYSICAL UNITS & then converted into financial
units.
 Companies prepare budgets for sales, production,
revenue expenses, capital expense, raw material,
advertisement etc.
40

41.  Budgets are CONTROL MECHANISM.
GOALS & OBJECTIVES
SHORT RANGE FORECAST
PREPARE OPERATIONAL BUDGET
SALES PRODUCTION MATERIALS SERVICES CAPITAL
GOODS
INDIRECT CAPITAL CORPORATE
EXPENSES EXPENSES OVERHEADS
INDIRECT DIRECT MANUFACTURING
EXPENSES LABOUR OVERHEADS
FINANCIAL BUDGET 41

42. BASIC OF MIS
 DECISION MAKING CONCEPTS: It is a fixed
intention to bringing to a conclusive result, A
judgement !
 Decision making is a complex process in the higher
management level due to the interrelationship among
decision makers, a job responsibility, question of
feasibility, code of morals, ethics etc.
 Rational decision is one which effectively ensures
achievement of goals for which the decision was
taken.
42

43.  DECISION MAKING PROCES
INTELLIGENCE (1) Recognition that problem must
be solved / opportunity to be
exploited – Gather Data
DESIGN (2) Understand the problem /
generate solutions
CHOICE (3) Choice made & Implemented
HERBERT SIMON MODEL
• INTELLIGENCE : Raw Data collected processed &
examined.
• DESIGN : Inventing, Developing & Analysing the
different decision alternatives.
• CHOICE : Select one alternative as a decision, based
on selection criteria. 43

44.  In the design phase, mgr. Develops a model of the
problem situation & generates & tests different decisions.
 In the choice phase, mgr. Evolves a selection criteria
such as max. profit, least cost etc. The criteria is applied
to various alternatives& the one which satisfies most is
selected.
 In these three steps, if the MGR. Fails to reach a
decision. The process is repeated.
MIS achieves this efficiently WITHOUT REPEATED
use of Simon Model
Ex : A manufacturing plant with underutilized
capacity & products not contributing to profit – Identified
Prob Find product mix for manufacturing plant to
fully utilize WITHIN the raw material & market
constraints & profit maximize. 44

45. -This is a problem of optimization & use Linear
Programming (LP) model.
-Model evolves various solutions / decision alternatives.
-Choice is made based on first feasibility & then on basis
on maximum profit.
 DECISION MAKING SYSTEMS
- If the decision is to be taken in a KNOWN
ENVIRONMENT, it is a CLOSED DECISION
making system.
Ex: A manufacturing product mix problem.
- If the MGR. Operates in an UNKOWN environment, it
is a OPEN DECISION system.
Ex : Deciding pricing of new product / plant location etc.
- MIS tries to CONVERT OPEN SYSTEM to
CLOSED system by providing information. 45

46. INFORMATION
INFORMATION CONCEPT:-
 Information differs from data.
 Information has a value in decision making – while data
does not have.
Information Characteristics:-
• Improves representation of an entity.
• Updates knowledge level (Ex: Sales Data)
• Reduces uncertainty
• Aids in decision making.
Ex: Sales Data progressively become information
when processed with other data such as target.
46

47. Conceptual model of communication:-
Transmitter Receiver
Source Channel Destination
Encoder De-coder
(Data / (MIS) (Reports) (Interprete) (MGMT.)
Information)
Noise
Distortion
Poor Quality of Creates
Information Confusion
(ABOVE MODEL OF COMMUNICATION USED
IN MIS)
47

48.  Information Presentation:-
 Improve communication through summarization.
 Improve by message routing copies of circular.
 Curb misuse of information by exercising control on
the content & distribution.
 Information BIAS:
 Should not be biased while classifying & filtering /
Communicating information.
 BIAS enters because people try to block sensitive
information.
 To overcome this, a formal organization structure &
top management decides information type / received. 48

49.  Way information is presented, may create BIAS. Ex: If
information is presented in alphabetic order & it is
lengthy.
 INFORMATION : A QUALITY PRODUCT
 Information is a product of data processing.
 Quality of information can be measured on four
dimensions: (1) Utility (2) Satisfaction (3) BIAS (4)
Error.
1. UTILITY: Has four facets : (1) Form (2) Time (3)
Access (4) Possession.
2. SATISFACTION OF USER: Is a common key of
measuring utility.
3. ERROR: Error creeps in due to
 Incorrect data & collection method. 49

50.  Incorrect data processing.
 Loss or Incomplete data.
 Poor data validation or control.
 Deliberate falsification.
 Processing or data to information should be allowed
only
after thorough validation.
4. BIAS: If the information is processed out of biased
data, it will have BIAS.
 PARAMETERS OF QUALITY OF
INFORMATION
8. Impartiality : No BIAS
50
9. Validity

51. 3. Reliability
4. Consistency : Data should have consistent
5. Age : If the information is old, it is not useful today.
 CLASSIFICATION OF INFORMATION:
 Action vs. No. of action information:-
Ex: “No stock” report calls for purchase action.
2. Recurring vs. non Recurring information:-
Ex: Monthly sales report vs. market study information.
 Internal vs. External information:-
Ex:-Information generated through internal resources
vs. information generated through govt. report.
 Planning information:
Ex: Needs norms/ standards / specs.
51

52. • Control Information:-
Ex:Reports giving status of activity with feed back
mechanism.
• Knowledge information:-
Ex: Collection of information through library reports /
research studies to build up a knowledge base for
decision making.
 Information can also be classified
BASED ON USAGE:-
 Organization information:- Used by all in
organization.
 Database information :- When multiple use & apply.
 Operational / Functional information:- When the
information is used for operations.
52

53. EXTERNAL LOW
Top
SOURCE OF Management STRUCTURED
INFO INFORMATION
Middle Management
Operational Management
HIGH
INTERNAL
53

54. METHODS OF DATA & INFORMATION
COLLECTION:-
 Choice of methods have an impact on quality of
information.
 Methods of data collection & processing is part of MIS.
 Methods of Data & Information Collection
• Observation:
= This methods are chosen for data & information
collection & specific problem.
= Remaining are routine methods particularly
irrespective of a problem.
Ex:Visit customer to assess complaint.
• Experiment: Ex:Assess market response to new
packaging. (Thru test marketing) 54

55. • Survey: Ex: Market survey, opinion poll.
• Subjective Estimation:Ex: Data pertaining to future
like life style in 21st Century/ Future of alternative
energy source.
• Transaction Processing: Ex:Ledgers, Payroll, sales
report etc.
• Purchased from outside: Ex:Database on specific
subject, research study etc.
• Publication: Ex: Corporate publication, industry
publication, NCAER report.
• Government Agencies: Ex: RBI, tax publications
etc.
55

56.  Human Being as Information Processor :
 An experienced Manager is a skillful information
processor & able to decide.
 While processing, manager also uses knowledge from his
memory.
 Filtering is a process whereby manager selectively accepts
input.
BRAIN
Use of Stored
Knowledge & Experience
APPLICATION OUT PUT
INPUT FILTERING
MENTAL SELECTION DECISION
FROM &
PROCESSING MANI ACTION
EYES, EARS BLOCKING
PULATION REGISTRATION
GENERALISED MODEL OF INFORMATION PROCESSOR 56

57.  Filtering process blocks the unwanted or inconsistent Data
which does not match the requirement.
 An inexperienced Manager may Omit Data, Distort Data.
 The information processor establishes filter based on
experience.
 MIS & THE INFORMATION CONCEPT:
 Goal of MIS : should be a provide information which has
a surprise value & reduces uncertainty.
 Build knowledge base in the organisation by processing
various Data from different source.
 Design of MIS should take care of DATA PROB
Knowing that it may contain BIAS & ERROR., with help
of validation, checking, controlling procedure in the
manual & computerised system. 57

58.  While designing MIS, due regard should be given to the
Communication Theory of transmission.
 Special care is needed to handle noise & distortion
 Principles of summarisation & classification should be
carefully applied giving regard to management levels.
 Care should be taken in the process that no information is
suppressed or over emphasised.
 MIS should provide specific attention to quality
parameters.
 MIS should make a distinction between different kind of
information. (Action vs No-Action etc.)
 MIS needs to give due regard to the information used for
planning, controlling etc.
 MIS should recognize some aspects of Human Capabilities
since decision makers are human. 58

59.  MIS design should meet the needs of the total organisation
- For design consideration, it is divided into top, middle,
supervisory & operational.
 MIS design should ensure input data quality by controlling
data for validation, reliability, consistency etc.
 Recognising information may be misused, if falls in wrong
hands, MIS design should have feature of filtering,
blocking, suppression, delayed delivered etc.
59

60. Use of MIS Value of Information
Top Goal Setting Policy Making Very High, Meeting High
Chief Accur Risk & Uncertainty Situation
Executi Strategic Planning ate Un-
ve & Futuri structu
Board stic red
Exception,
Middle Decision Making Precise, Adhoc,
Division, Problems Solving Analytical Unformatted,
Monitoring & Achieving Decision High, Meeting Risky
Department , Regular But
Business Planning & Oriented, Related Situation
Product Modified
Managers Schedule to Past, Current Frequent,
Future Display & Print
Supervisory Jr. Problem Processed & Low, Meeting Given at Fixed
Managers, Supervisors, Solving & Summarized and Near Certainty Interval Display &
Officers Meeting Classified for the Current Situation Print
Targets Period
To Know Lowest
the Status
Facts
Operational Assistants, Detailed Relating To Large Volume Print
Clerks Current Period
Levels of Management Nature of Information Reporting Media and
Organisational Pyramid Information Concept Structure 60

61. SYSTEMS (Systems & Procedure Systems Manual)
(DBMS/DSS/SAD are part of MIS handled by S/Weapon)
 System Concepts:
 System is a set of elements arranged in an orderly manner
to accomplish an objective
Ex: Systems Elements Objective
6. Computer - I/O, Processor - Process Data &
O/S, DBMS etc. Provide Information
2. Business - People, Plant, - Produce Goods &
Organisation Machinery, Services to Achieve
Material, Money etc. Business Objective
 A system is arranged with some logic governed by rules,
regulations, policies.
INPUT PROCESS OUTPUT
(Three Basic Parts of System) 61

62.  A system may have single input & multiple output or may
have several inputs & outputs.
Ex: A business system has several inputs & multiple
objectives such as sales, profit growth service etc.
 All systems operate in an environment. The environment
may influence the design of system.
 When a system is designed for achieving some objectives,
IT automatically sets boundaries for itself. If new
objectives are introduced, it may not function.
Ex: A computer system designed for commercial data
processing cannot achieve designing graphics, drafting,
since system elements & boundaries do not permit.
Ex: A business enterprise with profit objective cannot
function of a objectives becomes social respect job providing)
62

63. ENVIRONMENT
PROCESS PROCESS OUTPUT
FILTER
 Systems are designed for specific objective/output, so the
designer puts a filter around the system to control the
influence on the system.
Ex: A MFG. System with objective to produce desired
quality so QC system vs filter.
63

64.  SYSTEM CONTROL: Most important part of a system.
 Systems are designed for achieving specific objective &
this achievement is ensured through system control, which
becomes integral part of system design.
 ‘SENSOR’ measures ‘OUTPUT’ or achievement
‘STANDARD’, through ‘COMPARISON UNIT’.
 ‘FEEDBACK’ is result of ‘COMPARISON’ of ‘OUTPUT’
with ‘STANDARD’
 If ‘FEEDBACK’ is positive, system continues processing.
If ‘OUTPUT’ is not OK with STANDARD, then feedback
is provided to stop system.
64

65. INPUT PROCESS INPUT
(Control) SENOR
CORRECTIVE (Feedback) COMPARISON
UNIT UNIT
CONTROL SYSTEM MODEL STANDARD
 ‘CONTROL’ is the process of measuring OUTPUT,
COMPARING with STANDARD, sending signal to
CORRECTIVE unit which takes action.
 A system designed for specific objective without any
control will perform disorderly. 65

66.  MIS & SYSTEM CONTROL CONCEPT:
 Corrective unit in the MIS is the Manager or decision maker.
 Through a process of decision making, the Manager
‘CONTROLS’ the business system so that desired result is
achieved.
 A business system will have corresponding management
information system to help manager run the business system
with necessary information feedback thereby enabling
controlling (taking decisions for the organisation to resolve
any out of line situation towards achieving the goal) the
business operation to achieve the desired objective (output).
66

67. System Management Information
Business System
Components System
Inputs Raw materials, plant and Transactions of purchase, production
machinery, manufacturing, and sales, receipts and payments.
selling arrangement, accounting
Process Purchasing, manufacturing, Transaction processing and data
selling, accounting. processing
Outputs Quantity of production sales, Computation of production in numbers,
stock, income and profit. sales in value, stocks in weight, income
and profit in rupees.
Sensor Profit Income less assigned cost.
Comparison Expectation of profit vs actual Algebraic comparison module to compare
Unit profit. income vs budgeted income, profit vs
budgeted profit (standard).
Standard Profit. Budgeted profits of various products.
Feedback Balance Sheet. Exception reports after analysis showing
products earning profit below the budget.
Corrective unit Managing Director. Marketing Manager.
Decision to correct Business decisions. Pricing, advertising and promoting
the situation decisions.
Goals and Business goals and objectives. Provide that information which supports
67
objectives in achieving the MIS goals and objectives.90

68.  TYPES OF SYSTEM :
 A system is defined & determined by its boundaries &
objectives.
 When many smaller systems together make a larger
system, the smaller systems are subsystems.
SUBSYSTEM SUBSYSTEM SUBSYSTEM
1 2 3
MANUFACTURING QUALITY CONTROL MARKETING
SUBSYSTEM IN SERIAL ORDER
68

69.  A large system is always complex & difficult to understand.
So for understanding it, the system is split into smaller
subsystems.
 HIERARCHIAL STRUCTURE : Can be viewed for
most systems. Breaking the system in a hierarchical manner
provides way to structured system analysis & gives clear
understanding of the contribution of each subsystem in
terms of data flow & decisions & it interface with other
subsystems. (EX: Bill passing system)
 Part of system analysis & design.
 CATEGORY OF SYSTEMS :
 DTERMINISTIC SYSTEM : When inputs, process &
output are known with certainty.
EX : The accounting system. 69

70.  PROBABILISTC SYSTEM : When system output can be
predicted in probabilistic terms.
EX: Demand forecasting system.
 CLOSED SYSTEM : When system functions in isolation
does not exchange with environment.
EX : All kinds of accounting system, stock, attendance
system etc.
 OPEN SYSTEM : If the system exchange with
environment & influenced by IT.
EX : Marketing, Communication, Forecasting System
“Business organisations are open systems”
“All open systems must have self organising ability &
adjust to environmental changes”.
 Generally deterministic systems are closed systems &
70
probabilistic systems are open.

71.  Deterministic & closed systems are easy to computerise as
they are based on facts & behaviour can be predicted with
certainty. EX : Accounting, Invoicing Systems.
 Probabilistic & open systems are complex & calls for
considerable checks & controls that system performance
can be controlled.
EX : Pricing systems are probabilistic open. They are so
designed that external environment like Govt. policy on
Tax, Excise supply position changes are taken care.
 HANDLING SYSTEM COMPLEXITY :
 Information systems are relatively complex as compared to
physical system.
 To enable MIS DESIGNER to understand design, develop
& implement, the complexity is handled by viewing the
71
system as assembly of subsystems.

72.  The subsystems are put in hierarchial order to provide a
structural view to the designer.
EX : Materials management system.
 Have following subsystems.
(A) Procurement System (B) Purchase order follow-up
System (C) Receipts accounting system (D) Material
requirement planning system (E) Material issue
requisition system (F) Bill payment system (G) Inventory
control.
 Subsystems a re interconnected & each system inter
connection acts as a channel for input output
communication.
72

73. A C D F *
B E G
SUBSYSTEMS WITH INTER CONNECTIONS
* F = Bill Payment System
Collate Bill Collate Bill to Goods Compute Amt Prepare Cheque &
To P/O Receipt Voucher Payable Payment Voucher
Finance Acct.
Bill Scrutiny Bill Booking Bill Scrutiny Audit Compute Taxes 73
with P/O Gross

74.  SYSTEM EFFICIENCY & EFFECTIVENESS :
 EFFICIENCY : Indicates the manner in which inputs are
used by system i.e. right way. If the output/input ratio is
adverse, it is inefficient.
 EFFECTIVENESS : Means producing the right output in
terms of quantity & quality. When the system is ineffective,
the system is out of control & need major correction.
 POST IMPLEMENTATION PROBLE IN A SYSTEM
 The MIS designer designs & develops & implements the
information system within organisation.
 When systems are allowed to run for some time, they tend to
become disorganised resulting in system inefficiency.
 The process of decay & its cause is called ‘ENTROPY’.
74

75.  The designer introduces a negative entropy (i.e action to
arrest decay) & the system is brought back to normal state.
This process is called system maintenance.
 Steps for providing negative entropy:-
1. Periodical review of system
2. User meeting to assess satisfaction / utility
3. Subjecting system to audit check through test data.
EX: Of system maintenance
System Indication of Entropy Negative Entropy
1. Human Body - Loss of Weight / Headache -Medical checkup /
DIET / Medicine
2. DATA Processing - ERROR/OMISSION - Review & introduce
in Data Entry Streaming Procedure
3. Information - Decline in the Utility & - Reset Goals of Info.
Processing Satisfaction, Changed System Modify/ADD
Information need Revised System
75

76.  MIS & SYSTEM CONCEPT:
 MIS is a combination of data processing & information
system in an orderly manner to support management. In
achieving business objective.
 MIS boundary cross limits of organisation & draws data
from external environment.
 MIS follows system model & works on the principle of
feedback & control.
 MIS provides information of exceptional nature related to
business.
 MIS initially concentrates on quality of input : Impartiality
/ validity / reliability / consistency & age.
 MIS provides a system for data processing & data analysis
– uses operational research etc. 76

77.  MIS is a combination of deterministic & closed system &
probabilistic & open system.
 Complexity of MIS is handled by simplifying the subsystem,
decoupling etc.
 To arrest decaying of the system in post implementation
stage, it is necessary to provide negative entropy to the
system.
 A good MIS is founded on the indepth system analysis of the
business & management process.
 Elements of MIS are computer hardware, communication
channel, software, s/w tools, the development plan, well
defined measure objective of MIS consistent to business
objective.
77

78. SOURCING PRODUCTION
DATA ACQUISITION QUERY PROCESSING
DATA ENTRY PROCE EXCEPTATION REPORTING
SSING
DATABASE, KNOWLEDGE
DATA VALIDATION
BASE
TRANSACTION MIS
MODEL DECISION SUPPORT SYSTEMS
PROCESSING
OPERATIONS RESEARCH AND
DATA PROCESSING
APPLICATION PACKAGES
DATA STORAGE AND EXPERT, AND ARTIFICIAL
ACCESS INTELLIGENCE SYSTEMS
General Model of MIS & Subsystems
78

79. SYSTEM ANALYSIS & DESIGN
 TYPES OF INFORMATION SYSTEMS :
 DATA Processing Systems : Focus is on computing
existing Data.
 Transaction Processing Systems : Processing of
transactions using stored data & business rules. Focus is
non transaction execution.
 Functional Systems : Production, Sales, Finance
function where several transaction & stored Data is used.
Focus is on operation.
 Integrated System : More than one system is processed
together to produce an updated status & business result.
Focus is on process management across organisation.
79

80. 5. Enterprise Management System : It is a set of systems
functioning in respective areas providing service inputs to
other systems in the organisation. Focus is on decision
support for strategic management to achieve enterprise
goal & mission.
 The Need for System Analysis :
 For computerising an information system it is necessary
to
analyse the system from different angles. Analysis is the
basic necessity for an efficient system design.
 Need for analysis arises from following :
 System Objective : It is necessary to define system
objectives – (Purpose, business requirement etc.).
 System Boundaries : It is necessary to establish system
boundaries which would define the scope & coverage of 80

81. 3. System Importance : Necessary to understand the
importance of the system in the organisation it will help
the designer to know the utility & decide design features
of the system.
• Nature of System : Analysis will help designer to know
if it is open / close / determine / probabilistic.
• Role of System as an interface : System may act as an
interface to other systems. It is necessary to understand
role of the system as an interface to safeguard interest of
other system.
• Participation of User : Strategic purpose of the system is
to seek the acceptance of the people to a new
development. System analysis process provides a sense of
participation to the people & helps acceptance.
81

82. 7. Understanding Resource Needs : In terms of Hardware /
Software & investment requirement for management to
decide (BASEDON ROI).
8. Assessment of Feasibility : Analysis of system helps to
establish feasibility in terms of technical, economic &
operations.
 Approach & Steps in System Analysis & Design :
 STEPS : -
• Need for Information : Define Nature of information
who needs – identify users & applications.
• Define the System : Decide nature of system & its scope
– helps determine benefits & complexity.
• Feasibility : Technical success / economics viability –
study investment (H/W, S/W).
• Detailing Requirement : Identify strategic, functional &
82
operational information need.

83. 5. Conceptual System Design : Determine the inputs,
process & outputs & design a conceptual model.
6. Detailing the System Design : Draw the document flow
charts & data flow diagrams, data & system hierarchy
diagrams, mapping of data / information vs users
7. Structuring the System Design : Break the system into
hierarchial structure.
8. Conceptual Model of Computer System : Define step by
step usage of files, process & interface. Define the data
structure & validation procedure.
9. Break the System in Programme Modules : Make a
physical conversion of the system into programme
structure in a logical manner – modules will be data entry,
validation, processing & storing.
83

84. 10. Develop Test Data to Check System Ability : Test the
modules in terms of system integrity, input vs output.
11. Install the System : Install on the H/W – Test, Run
before users start using.
12. Implementation : Train users / run paraliel / prepare
user manual.
13. Review & Maintenance : Review the system through
audit trail & test data / confirm objectives MET / carry
modification if necessary – helps to maintain system
quality.
 System Analysis of Existing System :
 When objectives are finalised, the first step towards
development is to analyse existing system. It helps to
achieve
* Understanding existing system & objectives. 84

85. * Are the information needs fully justified. If so, is the cost
of system design compares ok with cost of increased value
of information.
* Evaluating the system for computersiation.
 Procedure for Analysing existing system :
* Carryout analysis at a place where the system is
functioning.
* Note key persons who contribute to system operation.
* Spend time with operating persons & observe the system to
understand finer details
 Understand Scope of the system & its objective identify
problems faced in the system.
 Collect all documents raised by the system & note who
raises the DOC. & manner of distribution these DOC.
Carries data from one point to other. 85

86.  Collect Outputs such as statements reports etc.
 Make list of rules, policies, guidelines etc.
 Note check points & controls used in system which ensures
data flow is complete, processing is correct & analysis
precise.
 Study the flow of data in the system.
Make a system study note & discuss with head of deptt
on your system understanding & view to ensure it is
same with HOD’s Ascertain if he has any other
objectives from the system.
Examine feasibility of new objectives implementation.
 Draw a revised flow chart to indicate how the system runs
the major steps of processing chart should indicate all
modifications suggested & accepted. Discuss the flow chart
with operating persons & explain the modified system.
86

87.  Make a list of outputs (Statement reports) containing
information & have HOD’s approval.
 Analyse requirement of information from utility point of
view. More information – higher the generation cost decide
the utility based on value of information.
 Compare cost of old & new system & benefits offered.
 Obtain approval of the new system from the users & top
management.
 Write a system manual for use of the people in the
department & for reference to the other users of system.
87

88.  Prototyping is a critical step where user understands the
system in initial stage & helps try out ideas.
“Life cycle procedure is a tool for the system designer. Its
meticulous following is a safe method to accomplish
system
objectives”.
 SYSTEM DEVELOPMENT MODEL
 For designing a good system, developers traditionally used
the “WATERFALL MODEL”.
 Like Waterfall (Flows from top to bottom) the system
development process moves from top to bottom in steps.
 Like water does not rise from a lower level to a higher
level, it is presumed that once the step in a model is over, it
is not required to go back. 88

89. MISSION & GOALS
INFORMATION NEEDS
SEPCIFICATION
ANALYSIS
SYSTEM DESIGN
PROCESS DESIGN
TESTING
IMPLEMENTATION
WATERFALL MODEL
MAINTENANCE
 This model is OK where the system requirement specifications
do not change frequently & minor changes can be taken care
through small design changes.
 This model applies well to basic rule based data & information
system. Example : Accounting, Materials, Production
Planning, HR etc. 89

90.  SPIRAL MODEL : For system development
 Some systems are more dynamic & require changes in
system requirement specification (SRS) frequently. These
modifications are called versions of the basic model.
 A popular model developed by Boehm is a Spiral Model.
 A spiral model is useful for developing large systems
where specifications cannot be finalised in one stroke
completely & correctly.
 Some changes surface while using the system after testing.
 The new versions provide additional functionality, features
& facilities to the user of the system i.e performance,
response, security etc.
 The user wants a system to be user friendly reliable &
effective – while the developer wants the system easy to
modify, easy to understand portable & compatible with
90
other system.

91. SPIRAL MODEL
Processed System D. Analysis Info. Need
V1 V2 V3
Mission & Goals
Testing Implementation Maintenance
91

92.  DEVELOPMENT OF MIS :
 Development of long range plans of the MIS:
 Any kind of business activity calls for long range plans for
success. Same is true for MIS.
 In MIS, information is treated as a major resource like
capital time & capacity. If this resource is to be managed
well, it calls for management to plan & control it for
appropriate use in the organisation.
 Unfortunately most organisation do not recognise
information as a resource. It is treated as one of many
necessities to conduct business.
92

93.  Many organisation have spent money on computers for
data processing, filing returns / reports to Govt. used
mainly for accounting & business transaction. As a result
information processing function of computer never got
importance.
 With advancement in computer technology
(Communication / Storage / Intelligence etc.) computers an
be used as a tool for information processing.
 We now a days need, a computer system flexible enough to
deal with changing need of information.
 It should be designed as an open system continuously inter
acting with business environment.
 The Plan of MIS is concurrent with the business plan of
organisation.
 Management needs are transformed to information needs
93
for the designer to evolve a plan.

94.  CONTENTS OF THE MIS PLAN :
 A long range MIS plan provides direction for the
development of the system & provides a basis for achieving
the specific targets or tasks against a time frame.
 MIS plan is linked with business plan.
 The goals & objectives of MIS should be so stated that they
can be measured. Typical statements are like :-
- Provide online information on Stocks, Markets Accounts.
- Query processing should not exceed more than 3 sec.
- Focus of the system will be on the end user computing &
access facilities.
94

95.  Business Plan vs MIS Plan :
 Business Goals & MIS Objectives in Line with
Objective Business Objective
 Business Plan & Strategy Information Strategy Playing
A Supportive Role
 Strategy Planning & Architecture of MIS to
Decisions Support Decisions
 Management Plan for System Development
Execution & Control Schedule, Matching Plan of
Execution
 Operation Plan for H/W & S/W plan for
for the Execution procurement and
implementation 95

96.  STRATEGY FOR PLAN ACHIEVEMENT :
 Development Strategy An Online, Bath, Real Time
 System Development Approach to Development
Strategy - Operational vs Functional
- Accounting vs Analysis
- Distributed vs Centralising
- One Database vs Multiple
 Resource for System Inhouse vs Outsource
Development - Customised Development
vs Use of Package
 Man Power Composition Analyst, Programmer, Skills
and Know How
96

97.  DETERMINING INFORMATION REQUIREMENT :
 Difficulties to determine correct & complete information
due to:
1. Capability constraint of human being as information
processor.
2. Nature & variety of information.
3. Reluctance of decision maker to spell out the
information for behavioural reasons.
4. Ability of the decision maker to specify the
information.
 Sole purpose of the MIS is to produce such information
which will reduce uncertainty moment unknown becomes
known, the decision makers job becomes simple.
 Inspite of above difficulties, methods have been evolved,
97
based on degree

98.  METHODS OF DETERMINING INFORMATION
REQUIREMENTS :
1. Asking or Interviewing
2. Determining from existing system.
3. Analysing the critical success factors.
4. Experimentation & modelling.
3. Asking or Interviewing :
 In this method, designer of MIS puts Q’s or converses with
user of information & determine information need.
 Asking Q’s is an art & it should be used properly to seek
information.
 The experts or experienced users are asked to give their
best answers & this approach is called DELPHI Method.
An experienced designer is able to analyse the answer for
correct information need. 98

99. 2. Determine From Existing System :
 Systems from other companies can give additional
information requirement.
 Text books, handbooks, has funds of knowledge for
information requirement. EX: Accounting Information
Requirement / Payroll / Accounts Payable / Inventory
Control / Finance Accounting etc.
 Managers at middle & operating level mostly use the
existing system as reference for determining information
requirement.
 Where rules & regulations are laid down (by Govt. /
Company Law Board for Share Market).
99

100. 3. Analysing the Critical Factors :
 Information requirement identified by critical success
factor of an organisation.
EX: Information requirement for management of
technology in a high tech business.
 Information requirement for a service organisation where
management of service becomes a critical factor.
 So the information requirement of such organisation
largely depend on these critical factors.
 The analysis of these factors will determine the
information need.
100

101. 4. Experimentation & Modelling :
 User resort to this method where there is total uncertainty
experimentation would decide the methodology for
handing complex situation. If the method is finalized, the
information needs are determined.
 Sometime models are used to determine initial information
need. The information requirement undergo qualitative
change as the users get the benefit of learning.
101

102.  DEVELOPMENT & IMPLEMENTATION OF MIS :
 Having made the plan of MIS, the development call for
determining the development strategy.
 Development strategy determines where to begin & in what
sequence.
 PROTOTYPE APPROACH :
 When the system is complex, the development strategy is
prototyping of the system.
 Prototyping is a process of progressively finding
information need, developing methodology, trying out on a
smaller scale with respect to data & complexity – Ensuring
that it satisfies the user need & assess the problems of
development & implementation. 102

103.  This process identifies the problem areas & inadequacies
in the prototype & may call upon changing the prototype,
requisitioning the information need & more user
interaction.
 Designer task becomes difficult if multiple users of the
same system & inputs they sue, are used by some other
users as well.
EX: A lot of input data comes from purchase deptt. which
is used in accounts & inventory management.
 Attitude of various users & their role as the originators of
the data needs high degree of positivism.
103

104.  LIFE CYCLE APPROACH :
 There are many systems or subsystems in MIS which have
a life cycle – They are very much structured & rule based –
they have 100% clarity of inputs & their sources, a definite
set of output & these remain static for long time.
 Minor modifications occur but not significant in terms of
handling either by the designer or user. Such systems can
be developed in a systematic manner & reviewed after a
year or two, for significant modification if Any.
EX: Payroll, Share Accounting, Order Processing, Basic
Accounting etc.
 Apart from core system, some decision support system can
be developed through life cycle approach.
104

105. MISSION
GOALS
IDENTIFY MODIFY
REFINE
INFORMATION PROTOTYPE REVIEW
THE NEEDS
NEEDS SPECIFICATIONS
DEFINE DEVELOP DEVELOP IMPLEMENT
SYSTEM AND REVISED IN
BOUNDARIES TEST PROTOTYPE PARALLEL
AND SCOPE
DEFINE IS THE
INITIAL NO
SYSTEM USER TRAINING
PROTOTYPE SATISFIED?
OJECTIVE
DEVELOP YES
EXAMINE
INITIAL DEVELOP DOCUMEN-
FEASIBILITY
PROTOTYPE APPLICATION TATION
SPECIFICATIONS WITH FINAL
SPECIFICATIONS
105
PROTOTYPE APPROACH TO INFO. SYSTEM DEVELOPMENT

106. SYSTEM PHYSICAL INSTALL
APPLICATION DESIGN THE SYSTEM
ASSESS SYSTEM CONDUCT AWARENESS
FEASIBILITY SPECIFICATIONS AND TRAINING
INFORMATION PROGRAM OPERATE THE
REQ. ANALYSIS SPECIFICATONS SYSTEM
CONCEPTUAL DEVELOP REVIEW
DESIGN THE SYSTEM AND AUDIT
LIFE CYCLE APPROACH TO THE DEVELOPMENT OF MIS
106

107.  COMPARISON OF PROTOTYPING & LIFE
CYCLE APPROACH
PROTOTYPING APPROACH LIFE CYCLE APPROACH
1. Open System with High Degree of 1. Closed system with little or no
Uncertainty about information need. uncertainty system has no change
significantly for long time.
2. Necessary to try out the ideas, 2. No need to try out the application
Application & efficiency of the of the information as it is already
Information as a decision support. proven.
3. Necessary to control the cost of 3. Scope of the design & the
design & development before the application is fully determined with
Scope of the system & its application clarity and experimentation not
is fully determined. Experimentation necessary.
is necessary.
4. User of the system wants to tryout 4. The user is confident & confirms the
the system before the commits the Specifications & the information
Specification & information needs.
Requirement. 5. The system & application is universal
5. The system & application is highly & governed by the principles &
custom oriented. practices. 107

108.  IMPLEMENTING THE MIS :
 Implementation of the system is a management process. It
brings about organisational change. It effects people &
their work style. – The process evokes a behavioural
response which could be either favourable or unfavourable
depending on strategy of the system implementation.
 In the process of implementation, the designer acts as a
change agent or catalyst for a successful implementation,
he has to handle the human factors carefully.
 User has a fear of (1) Cultural Change.
(2) Change in his role
108

109.  Guidelines for successful implementation of MIS :
3. No question beyond the information need of user.
4. Role is offering service : Not demanding.
5. System Design is for User : Respect demand of user.
6. Not to Mix Technical need with information need.
7. Impress upon user the global nature of information system
design which is required to meet current & future need.
8. Impress upon user that quality of information depends on
quality of input.
9. Impress upon user that information is a corporate resource
& he is expected to contribute to the development of MIS.
10.Ensure user makes commitment to all the requirements of
the system design specification.
109

110. 9. Ensure the overall management effort has management
acceptance.
10. Ensure user participation from time to time.
11. Realise that user is the best guide for path of development.
12. Do not expect perfect understanding & knowledge from
the user as he may be user of non-computerised system.
13. Impress upon user that change which is easily possible in
manual system is not that simple in computerised system
since program change required.
14. Impress upon user that perfect information is non. Existent
so he still has a important role.
15. Ensure that organisational problems are resolved before
system is taken for development.
110

111. 16. Conduct periodical user meetings on systems to
understand difficulty faced by users.
17. Train the user on computer appreciation
“Implementation of MIS is a transformation”.
 Apply Lewin’s Model:
7. Unfreeze the organisation for people to be receptive.
8. Choose a course of action where process begins &
reaches designed level.
111

112.  Factors Contributing to Failure of MIS :
 Many a times MIS is a failure. The common causes:-
4. MIS is conceived as data processing & not information
processing.
5. MIS does not provide that information which is needed
by managers.
6. Underestimating complexity of business system & not
recognising IT in MIS design.
7. Adequate attention not given to quality control of inputs,
the process & output leading to insufficient checks &
controls in MIS.
8. MIS is developed W/o streamlining the transaction
processing systems in organisation.
9. Lack of training & appreciation that user of information
& generator of data are different. 112

113. 7. Lack of user friendliness & not meeting requirement of
critical needs of user.
8. A belief that computerised MIS can solve all the
management problems of planning & control.
9. Lack of administrative discipline in following the
standardised systems & procedures, wrong codings,
deviating, from system specification.
“MIS does not give perfect information to all users in the
organisation Any attempt towards such a goal will be
unsuccessful because every user has a human BIAS, certain
assumptions, ingenuity etc. which is not known to the
designer”.
113

114. APPLICATION OF MANAGEMENT
INFORMATION SYSTEM
Business application of MIS in functional areas of
manufacturing sector:
1. Personnel Management
2. Financial Management
3. Production Management
4. Material Management
5. Marketing Management
Business application services sector :
1. Hotels
2. Hospitals
3. Banking
4. Insurance
5. Utilities 114

115.  The approach to application development is on the
basis of Database
 MIS model of an application considers transaction
processing as a basis.
 Online transaction processing system develops data
(OLTP) for DBMS & application development is based
on such database.
(Model of Information Processing System)
A typical information system begins with OLTP
system, uses RDBMS for creating database, 4GL for
application development & SQL for querying & report
generation.
The information system is designed on the principle
of open system design, with flexibility & user
friendliness in mind. 115

116. A typical information system primarily serves the
needs at functional levels such as :-
Personnel, Finance, Marketing, Production Materials,
& Corporate Business Management.
 PERSONNEL MANAGEMENT:
 Objective:- Provide suitable manpower in number & with
certain ability, skills, & knowledge as required by the
organisation.
 Human resource information system (HRIS) is a system
that support planning, control coordination, administration
& management of human resource of the organisation.
116

117. OLTP RDBMS
SYSTEM
APPLICATION
DEVELOPMENT
DATABASE SYSTEMS
ACCOUNTING QUERY ANALYSIS CONTROL
APPLICATIONS APPLICATIONS APPLICATIONS APPLICATIONS
PRINT REPORTS SCREEN DISPLAY
STATUTORY KNOWLEDGE OPERATION DECISION ACTION
COMPLIANCE UPDATE UPDATE ANALYSIS UPDATE
117

118. Goal is to control personnel cost through improving
manpower productivity.
 HRD though training & upgrading skills.
 Motivation though leadership & Job enrichment.
 Grievance Handling.
 Structuring the organisation.
 Input Transaction Documents :
1. Personnel Application Form
2. Appointment Letter
3. Attendance & Leave Record
4. Bio-data Self & Family
5. Appraisal Form
6. Production / Productivity Data on Job
7. Wage / Salary agreement
8. Record of complaint, Grievance, Accidents 118

119. 9. Industry data on wage / salary structure.
10. Industry data on manpower, skills, qualification.
11. Data on source of manpower : University / Institutions /
Companies.
12. Data on manpower utilisation trend in view of
mechanisation, automation, computerisation.
 Applications Development Areas :-
 Accounting :- Following entities are considered.
1. Attendance 8. Bio-data
2. Manpower 9. Family Data
3. Leave
4. Salary Deductions
5. Accidents
6. Production Data
119
7. Skills

120. B. Query :- Personnel management has to query on:-
1. Who is who
2. No. of Persons with Persons with particular skill
3. Manpower Strength & profile of a division
4. Absenteeism / leave / late attendance
5. Salary / wage of employee
6. Personnel records queries are processed with employee
number, skill code, department code etc.
C. Analysis :-
1. Analysis of attendance & leave
2. Trend in leave record
3. Analysis of salary / wage structure
4. Analysis of over time
D. Control :- Projection of manpower need & recruitment
plan / training programme preparation. 120

121. E. Reports :- Mainly used by personnel deptt. & top
management / divisional heads.
Statutory Repots :- By personnel function
1. Attendance Record
2. Strength of employee – By category: Permanent,
Trainees, Apprentices.
3. PF / ESI 4. Accident Reports
5. Income Tax Form 6. Strength of Employee etc.
Knowledge Update:-
• Daily Attendance Report
• Employee Strength
• Joining & Transfer of Employees
• Personnel cost by deptt., Job, Product
• Periodic, Statement showing pers. cost, by salary /
wages, overtime. 121

122. Operation Update:-
1. Daily Attendance to plan workload
2. O/T vs work completed
3. Projected absenteeism & distribution of work load.
Decision Analysis:-
1. Analysis of attendance by season / festival &
scheduling of jobs accordingly.
2. O/T analysis by deptt. / employee & to decide
strength of personnel.
3. Analysis of accidents & decide safe measures
Action Report:-
1. Recruitment & additional manpower or subcontract
2. Reduction/transfer/reorganising staff for cost control.
3. Preparation of training & development programme.
122

123.  Most of these reports are used by operating managers.
 Information need at top management comes when issues
of controlling wage bill, new wage agreement etc. come up.
APPLICATION OF MIS
 Financial Management :
 Objective :- Primary objective is meeting the financial
needs of the business by way of providing working capital
& long term loans to run the business with the goal of
containing cost of capital minimum.
 Meeting Statutory compliance by declaring audited
financial results, return filing & tax to Govt. & meet
obligations of share holders. 123

124.  In meeting these objective, financial management uses
tools: Break even analysis, cost analysis, cash flow
projections, ration analysis, capital budgeting & ROI
Analysis, Financial Modelling, Management Accounting,
Expense Analysis / Auditing & Control.
 Input Transaction Documents :-
 Payments:- To suppliers, employees, share holders,
financial institutions.
 Receipts:- From customers,authorities financial
institutions etc.
 Transactions are payments & receipts & they are
documented through journal vouchers, receipts, debit
notes, credit notes, transfer document. 124

125.  Applications :- Major application is the Financial
Accounting system which accounts for the financial
transactions of the company & produce financial results.
 The users are finance managers, cost controllers, auditors,
top management etc.
 Accounting System : The system accounts for all money
transactions related to sales, production, purchase, travel,
share holding etc.
1. Sales 8. Share Holders Fund 15. Budget
2. Purchase 9. Income Tax 16. Fixed Assets
3. Salary / Wages 10. Sales Tax
4. Inventory 11. Excise Duty
5. Expenses 12. Customs
6. Capital Purchase 13. OCTROT
7. Fixed Deposit 14. Consumption 125

126.  Query :- Query system gives debit or credit balance of an
account. It shows details of transactions resulting in that
balance.
 Queries are normally put to ascertain the business results
by subsidiaries.
EX: Query could be on sales w.r.t customer.
Query could be on sales of the product.
 Decision Analysis :- Financial Management calls for a
number of decisions, based on analysis of financial status
of the company.
 The decisions are :- Borrowing of short term working
capital, sources of finance analysis of debtor & creditor,
capital budgeting, investment alternatives. 126

127. Applications which support above decisions:-
2. Cash Flow Analysis
3. Source & Use of Fund
4. Debtors Analysis
5. Creditors Analysis
6. Budget Analysis
7. Ratio Analysis
8. Capital Budgeting & Ranking of Investment Alternative
 Control:- Controls are exercised based on exceptions
(Budget / Plan vs Actual)
11.Accounts Receivable
12.Advance to Creditors
13.Valuation of Inventory for Disposal
14.Cost Over Run
127
15.Shortage of Fund in Excess of Plan

128.  Reports :- Major reports are statutory compliance &
operations update.
1. Tax Returns
2. Registers : Sales Tax, Excise, TDS
3. Declaration of Financial Results to Public
4. Annual Results to Board.
 Knowledge Update :-
1. Monthly Trail Balance
2. Balance Sheet
3. Profit & Loss A/C
4. Stock Valuation
5. Cash Position
6. Expenses on Major Accounts
7. Sales / Purchase by 128

129.  Operation Update :-
1. Filing of Statutory Returns
2. Statutory Payments : Advance Tax, Sales Tax /
OCTROI
3. Report on Finished Goods / Despatch / Invoicing
4. Report on Material Receipt & Payment
5. Rent / Insurances
 Decision Analysis :-
1. Break even analysis for cost & price decision
2. ROI analysis
3. Analysis of current & fixed assets
4. Analysis of current liabilities
5. Analysis of overdue receivables
129

130.  Action Update :- Exception Reports for
Implementation:
3. Overdue Receivable – Legal Action / Termination of
Contract
4. Non-supply of goods & services – Legal Action /
Revise Terms / Termination
5. Poor Usage of Fixed Assets & Disposal
6. Non-Moving Inventory Say: Y 2 Years.
7. Evolving New Systems & Procedure to Control
Expenses
130

131.  Production Management :
 Objective :- To provide manufacturing services to the
organisation & involves manufacturing to certain
specified quality & cost within stipulated time.
 Input Transaction Documents :-
7. Production schedule 9. Material requisition
8. Process planning sheet 10. Customer order
9. Job card
10.Job status advice
11.Quality assurance rating form
12.Finished goods advice
13.Breakdown advice
14.Material requirement 131

132.  Standards & norms are used for production rate,
available capacity etc.
 Application :- Production Management is performed
through production planning & control, bill of material
processing, drawings & process planning, scheduling &
monitoring systems.
 Accounting :- Production Management accounts for no.
of entities such as:
11.Quantity of Production over a time period
12.Managerial Requirement & Usage
13.Rejection Quantity
14.Breakdowns 7. Machine Utilisation
15.Labour Utilisation 8. Labour Hours
16.Use of Power/Fuel/Consumables 132

133.  Query :- Relates to seeking status of job or information
on machines, workers etc.
 Status of Job Order
 Production Program
 Load on Machines
 Status of Material
 Information on Machines/Tools/Process etc.
 Decision Analysis:- Production Management function
makes number of decisions.
1. Make or Buy or Subcontract
2. Alternative Material / Process
3. Product / Job MIX etc.
 Control :- Control through exceptional reports:
1. Excessive Rejection 4. Continued Break Down
2. Job Hold Up 5. Deviation From Standard
133
3. Excessive Inventory 6. Backlog

134. APPLICATION IN MANUFACTURING SECTOR:
 Marketing Management :- Satisfy customer scope of
function : Identify need of needs customer, evolve product
concept, designing & positioning the product & sell at
appropriate price.
Activities Involve:-
1. Market Research
2. Consumer Survey
3. Advertising, Sales Promotion
4. Stocking of Product, Development Dealer /
Distributor network.
Function has a very strong interface with production
&
Finance Deptt.
Relies heavily on supply of Goods, Enough inventory.
134

135.  Input Transaction Documents:- Most Common
2. Customer Order
3. Order Acceptance
4. Delivery Notes
5. Invoice / Credit Note / Debit Notes.
However, Marketing function needs lot of data which R
not transaction based.
EX: Market survey, Research, Production Journal Etc.
 Application :-
 Accounting:- Highly process oriented accounting
application in marketing function. 11. Inventory
10.Product Sale 6. Distributor 12. Receivable
11.Product Family 7. Customer 13. Market Segment
12.Sales Value 8. Excise Duty 14. Export Mkt.
13.Sales Tax 9. Zone 15. Returns 135
14.Dealer 10. Area 16. Complaints etc.

136. Query :- Queries in marketing management are on
Customer, Product, Price, Stock, Sale, Statistics (Past) on
Sale etc.
 Query can be on sales performance, comparison of
customer groups, product group zones & areas, sales in
relation to target, customer complaints, name & address of
dealers / customers etc.
Decision Analysis:- Decisions on pricing, allocation of
stocks to orders, discounts commission etc. & most of
these are rule based supported by DSS.
Complex Decisions Are:- Price increase or decrease,
deciding on a new product packaging, distribution,
product positioning these decisions are of strategic
nature. 136

137. Applications are developed to support these
decisions :- Break even models, risk analysis mode,
distribution model, network mode, product launch model
etc.from the basis for taking decisions.
Consumer Industry have applications for information
on customer preference, behaviour, response to Adv.
campaign etc. Data is collected routinely to buildup
independent data base on consumer profiles, product
rating, buying decisions etc.
 Control :- In marketing management factors requiring
control are sales vs target, marketing cost vs budgeted
cost, actual sales vs competitors sales. Applications are
developed to report the comparison. 137

138.  Reports :- In marketing management knowledge update
reports are:
1. Product Sales Ledger
2. Sales Summary & Analysis
3. Market Analysis
4. Competition Analysis etc.
These reports are based on summary of various
entities such as orders, value, sales, stocks etc.
 Operations Update :- These reports inform the details of
the marketing operations.
A typical report will indicate daily orders received.
Others are:-
1. Order Book 4. Invoice
2. Despatch Report 5. Customer Complaints etc.
3. Inventory 138

139.  Decision Analysis :- These reports convey if the desired /
expected results are realised or not analysis of sales is
necessary to confirm whether choice of alternative is
correct or not.
 Action Update :- These reports will lead to such decision
as price reduction withdrawal of product from market,
changing the product position, allocating more budget for
expenses.
Example: of action update reports:-
1. Sales vs Target
2. Expense vs Sales
3. Stock vs Budgeted Stock Level
4. Complaints vs Number of Comp. Attended etc.
139

140.  Materials Management :-
Input Transaction Documents:-
1. Purchase Requisition
2. Purchase Orders
3. Receipts of Goods
4. Return of Goods to Supplier
5. Issue for Production
6. Return from Production
7. Certification for Payment (Advice)
Applications :-
1. Forecasting & Planning 6. Issuing Material
2. Procurement 7. Processing the Returns
3. Purchase Ordering 8. Bill Passing & Control
4. Goods Receipt
5. Inspection 140

141.  Accounting :-
1. Purchase Quantity
2. Issue Quantity
3. Stocks
4. Goods Returns
5. Rejections
 Query :- For Price, Supplier, Stock etc.
 Decision Analysis :- Majority of decisions centre
around cost of material in a manufacturing operation.
Decisions are related to price, stocking of items, reorder
level, fixed order quantity etc.
 Control :- On capital blocked in inventory, stock out
situation, reliability, dependability of supplier, cost of
purchase. 141

142.  APPLICATIONS IN SERVICE SECTOR
 Unlike manufacturing, the service sector does not have
physical good’s to be manufactured.
 MIS normally found in manufacturing will not be suitable
for services industry.
 Mission in services industry is to provide most satisfying
service to customer.
 Hotel Industry :- Service is the focus for Hotel Industry.
 MIS addresses the issue of assessing customer
expectations. Information kept in customer data base are:-
1. Type of customer 4. Service Demanded
2. Purpose of visit 5. Country etc.
3. Duration of Stay
- These information will help anticipate service expectations.
Keeping Track of Customer Profile. 142

143. - Monitoring Occupancy Level
- Project Future Needs
- Monitor Level of Expectation
- Monitor Communication Need
- Customer Database.
 Hospital :- Health Care Industry.
 Front End Application :-
4. Patient Data Base:- Handle query on the existing &
patients treated earlier queries may be from visitor,
doctor etc.
6. Medical Server Database:- (1). Name, Address, Tel. No.
of all medical staff, Holidays, Work Times.
(2). Important Service Centres (Labs, Blood Bank,
Special Clinics)
143

144. 3. Resource Planning & Control :- Online query facility on
scheduling of resources & facilities.
4. Medical case history database.
 Back Office Applications:-
1. Core applications:- Manpower & personnel planning,
Payroll & employee related processing, Financial
Accounting, Resource Utilisation & Analysis, Inventory
Control.
2. Clinical Control:- Stock out of drugs, patients waiting
time & service cycle etc.
 Banking :- Is a place where financial service is offered.
Customers choose a bank mainly on factors like:
1. Ease of Doing Business
2. Quality of Staff & Service
3. Range of Services 144

145. MIS design considers following:-
2. Customer Database:- Customer, category, range of
service, working HRS - Service depends on
3. Service to Account Holders:- Non-moving A/C, A/C
Having Balance Below Minimum, Default on Loan
Payment.
4. Service for Business Promotion:- MIS collects data for
future business strategy for banker to go out for customer.
5. Human Resource Upgrade:- MIS identifies needs for
training of staff & customer orientation.
 Insurance :- (or Risk Management)
 Insurance covers, Risk of the Customer, Risk may cover
‘Life’, ‘Liability’, ‘Accident’, ‘Breakdown’ etc. & loss /
Theft. 145

146.  Success of Insurance Business Lies in how efficiently &
effectively claims are handled, accurate billing, record
keeping etc.
1. Information for New Products / Services
2. Settlement of Claims
3. Management of Policies
 Utilities :- Water, Power, Gas, Telephone, Credit Cards,
Paging etc.
 Inputs are Name, Address, Meter No. etc.
 Outputs are Bill, A Notice or Claim.
 These Applications are developed with a life cycle
approach with strong validation focus.
 MIS Reports in utilities are:- Amount of consumption,
amount billed, consumption pattern, no. of meters
installed (working/not working), complaint analysis, 146
maintenance, stores / inventory etc.