management information system

Foundation of information systems ; Evolution of MIS:
Concepts; framework for understanding and
designing MIS in an organization; Concept of
information; definition, features, types, process of
generation and communication; quality and value of
information; information overload; techniques for
managing overload; summarizing; filtering ;inferences
and message routing. System concept; definition,
types and characteristics of system-control in systems
: feedback: positive and negative; negative feedback
control system, input, process and output control; law
of requisite variety.

 Its an organized combination of people, h/w,
s/w, communication networks and data
resources that collects, transforms &
disseminate information in an organization.
 An information system and MIS (IS) -
or application landscape - is any combination
of information technology and people's
activities that support operations,
management and decision making.

 Components of IS
 People
 H/W
 S/W
 N/W
 Data

 ISs can be categorized in four parts:
―Management Information System (MIS)
―Decision Support System (DSS)
―Executive Information System (EIS)
―Transaction Processing System (TPS)

Roles of IS
Support
Strategies for
CompetitiveAdvantage
Support
Business Decision Making
Support
Business Processes and Operations

MIS
Management Information System

 It describes What managers do in the operation
of their organization: Plan, organize, initiate and
control operations
 They plan by setting strategies and goals and
selecting the best course of action to achieve the
plan.
 They organize the tasks necessary for the
operational plan.
 They Control the performance of work by setting
performance standards and avoiding deviations
from standard.
 The most important task of managers is decision
making.

Information consists of data that have
been retrieved , processed or otherwise
used for informative or inference purposes
of decision making.
Information improves the quality of decision
making.

•A group of interrelated or interacting elements forming a
unified whole,
•A group of interrelated components working together
toward a common goal by accepting inputs and producing
outputs in an organized transformation process (dynamic
system).
 A system can be described simply as a set of elements
joined together for a common objective.
 Systems can be viewed as process models in terms of their
inputs, outputs, processing, and feedback/control
mechanisms.
•Three basic interacting components:
– Input
– Processing (transformation process)
– Output

• System:A set of components that work together to
achieve a common goal
• Subsystem:One part of a system where the products
of more than one system are combined to reach an
ultimate goal
Two types of Systems:
 Closed system: Stand-alone system that has no
contact with other systems
 Open system: System that interfaces with other
systems

 A management information system (MIS)
provides information that organizations need to
manage themselves efficiently and effectively.
 The MIS is defined as a system which provides
information support for decision making in the
organization.
 The MIS is defined as a system based on the
database 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.

Management Information Systems
(MIS)(Contd…)
• An MIS provides managers with
information and support for effective
decision making, and provides feedback on
daily operations
• Output, or reports, are usually generated
through accumulation of transaction
processing data
• Each MIS is an integrated collection of
subsystems, which are typically organized
along functional lines within an
organization

Corporate
databases
of
internal
data
Databases
of
external
data
Databases
of
valid
transactions
Operational
databases
Transaction
processing
systems
Management
information
systems
Decision
support
systems
Executive
support
systems
Expert
systems
Business
transactions
Input and
error list
Drill-down reports
Exception reports
Demand reports
Key-indicator reports
Scheduled
reports
Employees
Corporate
intranet
Application
databases

 The MIS is an idea which is associated with
man, machine, marketing and methods for
collecting information’s from the internal and
external source and processing this
information for the purpose of facilitating the
process of decision-making of the business.

Management oriented.
Management directed.
Integrated
Common data Flows
Strategic Planning
Bias towards centralization
Information and communication technology
enabled.

Integrated
enabled.
Top down design.
Focus is to satisfy
the information
needs of the
management

Integrated
enabled.
Management is
involved in the design
process ,continuous
review and up
gradation of MIS in
order to develop a
good quality system.
The system is
structured.
Minimizes the gap
between expectation
of the management
and the actual system

Integrated
enabled.
Integrated with all the
operations and functional
activities of the
management.
Only an integrated system
can provide the complete
picture of the scenario.

Integrated
enabled.
Data being stored into
the system, retrieved
from the system,
disseminated within
the system or
processed by the
system can be handled
in an integrated
manner.
Avoids data
duplication, data
redundancy, and help
simplify operations.

Integrated
enabled.
A high
degree of
planning
goes into
creating an
MIS.

Integrated
enabled.
Centralized
data
management
helps an MIS
to exercise
version control
as well as
provide an
integrated
view of data to
the managers.

Integrated
enabled.
Information
should be
timely and
accurate for
effective
decision
making

27
MIS Functions:
The broad functions of MIS are
•To improve decision making.
•To improve efficiency.
•To provide connectivity.
The main functions of MIS are
Data Processing
Prediction
Planning
Control
Assistance

 The main scope of MIS corresponds to different
phases such as analysis, design, planning and
construction.
 These also include many other activities such as
implementation, utilization , evaluation and handling
of information systems for coordinating various
activities in the organization.
 The MIS helps in strategic planning, management
control, operational control and transaction
processing.
 The MIS plays the role of information generation,
communication, problem identification and helps in
the process of decision-making.

Outputs of a
Management Information System
• Scheduled reports
• Produced periodically, or on a schedule (daily, weekly,
monthly)
• Key-indicator report
• Summarizes the previous day’s critical activities
• Typically available at the beginning of each day
• Demand report
• Gives certain information at a manager’s request
• Exception report
• Automatically produced when a situation is unusual or
requires management action

Management Information Systems
for Competitive Advantage
• Provides support to managers as they work
to achieve corporate goals
• Enables managers to compare results to
established company goals and identify
problem areas and opportunities for
improvement

Organization and
Management
Technique of Management
Function of
Management
1. Behavioral ScienceTechnique
2. QuantitativeTechnique
3. DecisionTechnique
4. Experience Rule
Planning Organization Directing Staffing Controlling
Man Power
Resource Flows
Money, Material
M/c Facilities
MIS
Structure of MIS

MIS structure be described by following a variety
of different approaches:
 Physical components,
 Information system processing functions,
 Decision support
 Levels of management activities
 Organizational functions

Structure of MIS may be understood by looking at the physical
components of the information system in an organization.
 Hardware: Hardware refers the physical data processing
equipment and peripheral devices.
 Software: software is broad term given to the instruction or
program that direct the operation of the hardware.
 Database: the data base consist of all data utilized by application
software.
 Input and output: various physical input and output from the
information system, existing in the form like printout, report etc.

Information system structure can also be understood in term of its
processing functions.The main processing functions of
information system are described below:
 To ProcessTransactions: Information systems process transaction
may be defined as an activity taking place in an organization.
 To Maintain Master files: Information systems create and maintain
master files in the organization. A master file stores the historical
data about the organization.
 To Produce Reports: Reports are significant products of an
information system. Many reports are produces on a regular basis,
which are called scheduled reports.
 To Process Interactive Support Applications

Decision vary with respect to the structure that
can be provided for making them. A highly
structured decision can be pre-planned. A
structured decision, because of its well
defined nature can be said to be
programmable.

 The structure of an information system can be categorized
in terms of level of the management activities.
 Strategic planning deals with long-range considerations.
The decisions include the choice of business directions,
market strategy, product etc.
 Management control level includes acquisition and
organization of resource, structuring of work and training
of personnel.
 Operational control is related to short-term decision
for current operations. Pricing, ,inventory level etc

 The structure of management information system can also
be described in terms of the organizational functions.

 Information, in its most restricted technical
sense, is a sequence of symbols that can be
interpreted as a message.
 Information can be recorded as signs, or
transmitted as signals.
 The information has a value in decision making
while data does not have.
 Information brings clarity and creates an
intelligent human response in the mind.
 information is the message (utterance or
expression) being conveyed.

The first business application of computers
(in the mid- 1950s) performed repetitive,
high-volume, transaction-computing tasks.
The computers” crunched numbers”
summarizing and organizing transactions
and data in the accounting, finance, and
human resources areas. Such systems
are generally called transaction processing
systems (TPSs)

 Data that is (1) accurate and timely, (2) specific
and organized for a purpose, (3) presented
within a context that gives it meaning and
relevance, and (4) can lead to
an increase in understanding and decrease in un
certainty.
 Information is valuable because it
can affect behavior, a decision, or an outcome.

„ Management Information Systems (MISs): these
systems access, organize, summarize and
display information for supporting routine
decision making in the functional areas.
„ Office Automation Systems( OASs): such as
word processing systems were developed to
support office and clerical workers.
Decision Support Systems: were developed to
provide computer based support for complex,
nonroutine decision.
„
End- user computing: The use or development
of information systems by the principal users of
the systems’ outputs, such as analysts,
managers, and other professionals.

 Improves representation of an entity
 Updates the level of knowledge
 Has a surprise value
 Reduces uncertainty
 Aids in decision making

1. Primary (Think of this as Firsthand)
Primary information is comprised of original materials that were
created first hand.This type of information is from the time period
involved and has not been filtered through interpretation.
Examples are:
 Diaries
 Interviews (legal proceedings, personal, telephone, email)
 Letters
 Original Documents (i.e. birth certificate or a trial transcript)
 Patents
 Photographs
 Proceedings of Meetings, Conferences and Symposia.
 Survey Research (such as market surveys and public opinion polls)
 Works of Literature

2. Secondary (Think of this as Second Hand)
Secondary information is made up of accounts written after the fact
with the benefit of hindsight. It is comprised of interpretations and
evaluations of primary information. Secondary information is not
evidence, but rather commentary on and discussion of evidence.
Examples are:
 Biographies
 Books
 Commentaries
 Dissertations
 Indexes, Abstracts, Bibliographies (used to locate primary &
secondary sources)
 JournalArticles

3. Tertiary (Think of this asThird Hand)
Tertiary information is a distillation and
collection of primary and secondary
information.
Examples are:
 Almanacs
 Encyclopedias
 Fact books

 The decision making process includes the
following stages:
 Identification and structuring of problem:
One needs information to identify a
problem and put it in a structured manner.
 Putting the problem in a context: Without
information about the context in which the
problem has occurred, one cannot take any
decision on it. In a way , the context defines
the problem.

 Generation of alternatives: Information is
a key ingredient in the generation of
alternatives for decision-making.
 Choice of the best alternative: Based on
the information about he suitability of the
alternatives, a choice is made to select the
best alternative.

 Data Repository: This is a subsystem which
is at the core of any information system.
These structures are arranged in a way that
helps in faster storage and retrieval of data
with adequate security.
 User Interface: This subsystem handles
the interaction of the system with the user
and hence it has to manage issues related to
the display of data on an output medium.

 Network:This subsystem ensures
communication between the different
entities of an information system.
 Computer Hardware:An IT infrastructure is
needed in an effective manner.
 System Software : Some basic software is
required for the efficient functioning of
information system.
 Input/Output: I/O must be user independent.

 Business rule(process) : This is a set rules
which governs how a system should function
to imitate the real business process.
 Algorithm/program/ application software:
This is the actual invisible component,
which integrates all the components.The
logic is defined in the program.

Data processing can be defined as the
processing of data to make it more usable
and meaningful and thus converting into
information. It covers all activities required
for generating information from data.

1. Origination:
2. Input:
3. Processing:
4. Storing:
5. Data retrieval:
6. Production of documents:
7. Data communication:

1. Origination:
2. Input:
3. Processing:
4. Storing:
5. Data retrieval:
The main source of records used in data
processing is sales orders, purchase orders or
employee time cards stored in magnetic tapes,
disks and terminals.

1. Origination:
2. Input:
3. Processing:
4. Storing:
5. Data retrieval:
The input of data stored on these
source documents into the data
processing system.The data
records stored in secondary
devices is now fed into the
computer for processing.

1. Origination:
2. Input:
3. Processing:
4. Storing:
5. Data retrieval:
Computer and other electronic
devices are used for processing
data. Data should be sorted and
verified before processing.
Processing involves calculation,
comparison, filtering and
modification of data according to
user’s requirements.

1. Origination:
2. Input:
3. Processing:
4. Storing:
5. Data retrieval:
The result of processing of
data must be kept for
future reference. This
function is called storage.

1. Origination:
2. Input:
3. Processing:
4. Storing:
5. Data retrieval:
With the introduction of
information technology users
will be able to search and
retrieve files records on-line
with direct access devices.

1. Origination:
2. Input:
3. Processing:
4. Storing:
5. Data retrieval:
Copies of documents and
reports are prepared as
an output of the
information system.

1. Origination:
2. Input:
3. Processing:
4. Storing:
5. Data retrieval:
On-line transmission of
information is possible in
electronic data processing
system.

 The quality and value of information can be
described as how it contributes for effective
decision making.
 The quality of information is high, if it creates
managerial impact leading to attention,
decision and action.

Value of Information:
 Timeliness
 Presentation
 Accuracy
 Context
 Expectation

The quality of information can be measured on
the four dimensions:
utility,
satisfaction,
error,
bias.

1)The utility Dimension:-
 The utility dimension has four components namely
the form, the time, the access and the procession.
 If the information is presented in the form of
manager requires, then its utility increases.
 If it is available(time) when needed, the utility is
optimized.
 If the information is easily and quickly accessible
through the online access system, its utility gets an
additional boost.
 If the information is processed by the manager who
needs it, then its utility is the highest.

2)Satisfaction Dimension:-
 The degree of satisfaction would determine
the quality of the information.
 If the organization has a high degree of
satisfaction, then one can be safe in saying
that information systems are designed
properly to meet the information needs of
the managers at all the levels.

3)Error Dimension:-
 The error creep in on account of various reasons, namely:
 An incorrect data measurement
 An incorrect collection method.
 Failure to follow the prescribed data processing
procedure.
 Loss of data or incomplete data.
 Poor application of data validation and control systems.
 A deliberate falsification.
 The data should be avoided of errors, care should be taken
that the information is processed after ensuring the
correctness of the data in terms of time and the number of
document, and the transactions in the period.

4. Bias Dimension:-
 The procedure of communicating the
information should be such that the system is
able to detect the degree and the nature of
the bias and correct the information
accordingly.

 It is a situation where a manager is given too
much information and as a result his is
confused and cannot make optimal decisions.

 Refers to the difficulty a person can have
understanding an issue and making decisions
that can be caused by the presence of too
much information.
 Information overload occurs when the
amount of input to a system exceeds its
processing capacity.
 information overload is simply the inability
for a person or entity to digest and apply all
of the information provided to them.

 Stress induced by reception of more information than
is necessary to make a decision and
by attempts to deal with it outdated time
management practices.
 information overload is a phenomenon of having so
much information that the very volume creates the
additional work of having to decide what is important,
rather than helping executives to solve problems and
make decisions.
 Information overload is a fact of life for company
directors, senior managers, and all professionals.

 Increasing globalization
 Diversification of business forces

 A rapidly increasing rate of new information.
 The ease of duplication and transmission of data across
the Internet
 An increase in the available channels of incoming
information (e.g. telephone, e-mail, instant messaging)
 Large amounts of historical information to dig through
 Contradictions and inaccuracies in available information
 A low signal-to-noise ratio
 A lack of a method for comparing and
processing different kinds of information
 The pieces of information are unrelated or do not have any
overall structure to reveal their relationships

1. Focus and specialize in one thing
2. Take Control
3. Follow only valuable sources
4. Unsubscribe from most of the unwanted
subscription
5. Organize the time…

The main important techniques are:-
1. Data summarizing
2. Message modification or filtering
3. Inferences
4. Message routing

 A system is a group of interrelated
components, with a clearly defined boundary,
working toward the attainment of a common
goal by accepting inputs and producing
outputs in an organized transformation
process.
 Derived from Greek word 'Systema'.
 Means an organised relationship among
functional units or components.

 A system is an orderly grouping of
interdependent components linked together
according to a plan to achieve a specific
objective.
It can be defined as a set of interacting
entities with
interrelationships/interconnections amongst
each other forming an integrated whole.

 A set of components that interact to accomplish goals.
 Systems can be viewed as process models in terms of their
inputs, outputs, processing, and feedback/control
mechanisms.
System Examples:
 University – an example
 Inputs: students, faculty, textbooks
 Processing mechanisms: teaching, research, service
 Output: graduates
 Goal: acquisition of knowledge

SYSTEM
Processing
Input Output

 Input
 Processing
 Output

 Have a specific structure
 Are a model of reality
 Has a purpose
 Have inputs and outputs.
 Will have measures of performance
 Has an environment

1. Closed and Open system
2. Deterministic, Probabilistic and Random
systems
3. Human, Machine and Human-machine
system
4. Abstract and Concrete Systems
5. Adaptive and Non-adaptive systems
6. Simple and Complex Systems

 The mechanism of feedback has a very simple
definition: "the return to the input of a part of
the output"
 It is data about the performance of a system.
 The information measuring the goals and
providing control to the system.
 feedback generally as "information about the gap
between the actual level and the reference level of
a system parameter which is used to alter the gap
in some way",.
 It provides a perfect regulatory mechanism.

 Positive feedback
 Negative feedback

 positive feedback is defined as a positive loop
gain around a feedback loop.
 positive feedback is in phase with the input,
in the sense that it adds to make the input
larger.
 Positive feedback tends to cause system
instability.
 positive feedback is also known as
regenerative feedback.

 Negative feedback is also known as
degenerative feedback.
 Feedback that reduces the output of a
system.
 Negative feedback tends to make a
system self-regulating; it can
produce stability and reduce the effect of
fluctuations.

 Negative feedback control is system means
keeping the system operating within certain
limit of performance.

Input Process Output
Storage
Feedback

 Law of requisite variety is one of the basic
notation of system control theory, to obtain
control.
 This has various rigorous formulations, but a
commonsense, understanding is that to
control each possible state of system
elements.

 This means also that the control for the
system must be able to determine of
variables and send system change
instructions for each change.The Law of
requisite variety needs that for a system to be
control, every controller (human/machine)
must be provided with enough control
responses (what to do in each case) to cover
all possible condition the system may face.

 The law of requisite variety means that for a system to be
controlled, every controller(human and machine) must be
provided with:-
1. Enough control responses (what to do in each case)
to cover all possible conditions the system may face.
2.The decision rules for generating all possible control
responses OR
3.The authority to become a self organizing
system in order to generate control responses.
 Enumerating all responses is possible in simple cases. In
complex systems providing control responses is very
difficult.

End of 1st module……
References:
1. Introduction to information systems-
O’Brien
2. MIS- O’Brien, Marakas, Behl (ninth edition)
3. Mis- Mcgraw hill Publication
4. MIS- Nirmalya Bagchi
5. Websites……

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