What is MIS?

Characteristics,
Objectives, Role, Component
 Post last modified:4 May 2023
 Reading time:51 mins read
 Post category:Management Information System

What is MIS?
MIS is an organized integration of hardware and software technologies, data, processes,
and human elements. It is a software system that focuses on the management of
information technology to provide efficient and effective strategic decision making.
What is MIS? MIS is the acronym for Management Information Systems. MIS is a set
of procedures which, when executed, provides information to support decision making.
Management Information System

A Management Information System is

 An integrated user-machine system
 For providing information
 To support the operations, management, analysis, and decision-making functions
 In an organization
The system utilizes
 Computer hardware & software
 Manual procedures
 Models for analysis, planning, control, and decision making, and
 A database
Table of Content [Show]

MIS Definition
Management Information System (MIS) is an integrated man/machine system for
providing information to hold up the operations, management and decision making
functions in an organization.G.B. Davis
A formal method of collecting timely information in a presentable form in order to
facilitate effective decision making and implementation, in order to carry out
organisational operations for the purpose of achieving the organisational goals.Walter I.
Kennevan
A Management Information System is an organized portfolio of formal systems for
obtaining, processing, and delivering information in support of the business operations
and management of an organization.Zwass (1992)

MIS Meaning
MIS Meaning: A management information system is an acronym of three words, viz.,
Management, information, system. In order to fully understand the term MIS, let us try to
understand these three words.

1. Management: Management is the art of getting things done through and with the
people in formally organised groups.

2. Information: Information is data that is processed and is presented in a form which

assists decision-making. It may contain an element of surprise, reduce uncertainty or
provoke a manager to initiate an action.

3. System: A system is an orderly grouping of interdependent components linked

together according to a plan to achieve a specific goal. The term system is the most
loosely held term in management literature because of its use in different contexts.
Components of MIS
The major components of MIS are:

Components of MIS
 People Resources: People are required for the operation of all information system.
 Data Resources: Database holds processed and organized data.
 Software Resources: It includes all sets of information processing instruction.
 Hardware Resources: Include all physical devices and materials used in information
processing.
 Process: is a step undertaken to achieve a goal.
As, We have covered the basic concept of management information system which
includes what is MIS, MIS definition, MIS meaning, MIS components.
Now, let us move further and try to understand MIS objectives, MIS characteristics, MIS
advantages, MIS role, MIS challenges, MIS limitations etc.

Objectives of MIS
What is MIS objective: MIS has five major objectives which include:
1. Data Capturing
2. Processing of Data
3. Storage
4. Retrieval
5. Dissemination
 Objectives of MIS

These MIS objective are discussed below in detail.

Data Capturing
MIS capture data from various internal and external sources of the organization. Data
capturing may be manual or through computer terminals.

Processing of Data
The captured data is processed to convert into the required information. Processing of
data is done by such activities as calculating, sorting, classifying, and summarizing.

Storage of Information
MIS stores the processed or unprocessed data for future use. If any information is not
immediately required, it is saved as an organization record, for later use.

Retrieval of Information
MIS retrieves information from its stores as and when required by various users.
Dissemination of Information
Information, which is a finished product of MIS, is disseminated to the users in the
organization. It is periodic or online through a computer terminal.

Characteristics of MIS
What is MIS Characteristic? MIS plays a very important role in every aspect of an
organization. These characteristics are generic in nature.
Following are the characteristics of MIS:
1. System Approach
2. Management Oriented
3. Need-Based
4. Exception Based
5. Future Oriented
6. Integrated
7. Long Term Planning
8. Sub-System Concept
9. Central Database
Characteristics of MIS
System Approach
The information system follows a System’s approach. The system’s approach implies a
holistic approach to the study of system and its performance in the light for the objective
for which it has been constituted.

Management Oriented
The top-down approach must be followed while designing the MIS. The top-down
approach suggests that the system development starts from the determination of
management needs and overall business objectives.

The MIS development plan should be derived from the overall business plan.
Management oriented characteristic of MIS also implies that the management actively
directs the system development efforts.

Need-Based
MIS design and development should be as per the information needs of managers at
different levels, strategic planning level, management control level and operational
control level. In other words, MIS should cater to the specific needs of managers in an
organization’s hierarchy.
Exception Based
MIS should be developed on the exception-based reporting principle, which means an
abnormal situation, i.e. the maximum; minimum or expected values vary beyond
tolerance limits. In such situations, there should BE exception reporting to the decision-
maker at the required level.

Future Oriented
Besides exception-based reporting, MIS should also look at the future. In other words,
MIS should not merely provide past or historical information; rather it should provide
information, on the basis of projections based on which actions may be initiated.

Integrated
Integration is a necessary characteristic of a management information system. Integration
is significant because of its ability to produce more meaningful information.

For example, in order to develop an effective production scheduling system, it is

necessary to balance such factors as setup costs, Workforce, Overtime rates, Production
capacity, Inventory level, Capital requirements and Customer services.

Long Term Planning

MIS is developed over relatively long periods. Such a system does not develop overnight.
A heavy element of planning is involved. The MIS designer must have the future
objectives and needs of the company in mind.

Sub-System Concept
The process of MIS development is quite complex and one is likely to lose insight
frequently. Thus, the system, though viewed as a single entity, must be broken down into
digestible sub-systems which are more meaningful at the planning stage.

Central Database
A central database is a mortar that holds the functional systems together. Each system
requires access to the master file of data covering inventory, personnel, vendors,
customers, etc. It seems logical to gather data once, validate it properly and place it on a
central storage medium, which can be accessed by any other subsystem.
Functions of MIS
The broad functions of MIS are as follows:
 To Improve Decision-Making
 To Improve Efficiency
 To Provide Connectivity
 Data Processing
 Prediction
 Planning
 Control
 Assistance

To Improve Decision-Making
The Management Information System (MIS) furnishes relevant information on diverse
matters, thereby enhancing the decision-making prowess of the management. By utilizing
the speedy and precise data provided by the MIS, managers can make prompt and
informed decisions, which ultimately enhances the quality of decision-making and
contributes to the company’s value.

To Improve Efficiency
The Management Information System (MIS) facilitates managers in executing their
duties with enhanced ease and efficiency, resulting in improved productivity.

To Provide Connectivity
The MIS provides managers with better connectivity with the rest of the organization.

The Management Information System (MIS) is commonly utilized in decision-making

processes within a system. One such application of MIS is to identify issues that require
prompt attention, offer timely feedback, and inform senior management of the current
progress and areas for improvement.

Therefore, the main functions of MIS may vary depending on the specific tasks
performed by an organization.
Data Processing
Data processing involves collecting, transmitting, storing, and processing data to generate
an output. Prediction involves analyzing data using modern mathematics, statistics, or
simulation to anticipate future scenarios.

Prediction
By utilizing methods of modern mathematics, statistics, or simulation, data analysis is
conducted to predict potential future scenarios.
Planning
The analysis of data of a regular nature may give many indications on likely future events
or situations and this can be utilized in planning or reviewing the plan already made
earlier.

Control
By examining records of daily, monthly, quarterly, or annual activities, certain factors
that require management and control can be identified. If these factors are identified in a
timely manner, they can be managed relatively easily. However, some factors may
require the attention of senior management to remain under control. It is essential to note
that ignoring smaller factors at the beginning may have the potential to disrupt other
factors as well.

Assistance
One of the principal functions of MIS is to support senior management by analyzing
regular records and drawing inferences about various factors related to the company’s
operational performance, such as human resources, financial resources, material
resources, and more.

Advantage of MIS
 Generate Competitive Advantages
 Implementation of Management by Objectives Techniques
 Fast Reaction to Market Changes
 MIS as Strategic Resource
 Change in Industry Structure
 Functional Use
 External and Internal Change
 Availability of Customer Data
Generate Competitive Advantages
Business houses succeed or fail based on how they face competitive challenges. MIS if
implemented properly, provides a wealth of information to allow management to
construct and develop effective plans to meet, and beat, their competition.

Implementation of Management by Objectives

Techniques
MIS allow all participants, both management and staff, to view, analyse and interpret
useful data to set goals and objectives.

Fast Reaction to Market Changes

MIS can deliver facts, data and trends to business with lighting speed. Having this
information allows business houses to react quickly to market changes, regardless of the
type (positive or negative) or volatility.

MIS as Strategic Resource

 MIS helps in taking strategic, tactical and operational decisions. It is one of the critical
and important resource.
 It helps the management to understand cost, quality, price, technology, productivity
and product.
 It helps to smoothen the business process and thereby facilitate managing of business
operations.
 It helps to maintain the business standards like ISO, QS, CMMI, six sigma etc.
 It helps to be a head in the competition.
 It helps company in analysing their own SWOT.
 It also helps in maintaining its own profitability.
 It will help in taking new business decisions like new plans, new product, new
business line etc.
 It protects company from business cycles.
 It provides future direction to the organisations.
 It also provides the competitive edge.
Change in Industry Structure
MIS helps in changes in industry structure includes five forces:

 Customers’ bargaining power

 Suppliers’ bargaining power
 Threats of new entrant in market
 Pressure from substitute products and services and u Existing industry competitors
 Birth of new business/ New business initiatives. u New way of doing business.
Functional Use
Functional use of MIS includes:

 Lower the cost

 Information and information system facilitate value chain. e.g. product delivery
quality. It increases the speed, accuracy and timeliness of the organisation. It helps in
simplifying the business processes. It helps organisation in meeting the standards and
benchmarks.
External and Internal Change
MIS creating knowledge is an asset. It helps to achieve change in work life style for
better results. MIS has made the world smaller. Worldwide reorganisation environment
and attempt to control the calamity. Health conscious among the group lead to less
sufferings.

MIS helps in Internal Change: MIS will change the business process, MIS will change
the old standards and set new standards. MIS is a key for continuous improvement
process. MIS will reduce the hierarchy and hence less operation cost. MIS focuses on
“shared information”. MIS also measures the result and performance.
Availability of Customer Data
MIS giving an overall picture of the company and acting as a communication and
planning tool. The availability of the customer data and feedback can help the business
houses to align their business process according to the need of the customers.

The effective management of customer data can help the company to perform direct
marketing and promotion activities. Therefore, information is considered to be an
important asset for any company in the modern competitive world.

Role of MIS
A management information system (MIS) plays an important role in business
organizations.
What is MIS role: There are many roles of MIS and some of the important MIS role are
discussed below:
1. Decision making
2. Coordination among the department
3. Finding out Problems
4. Comparison of Business Performance
5. Strategies for an Organization
 Role of MIS

Decision making
Management Information System (MIS) plays a significant role in the decision-making
process of any organization. In any organization, a decision is made on the basis of
relevant information which can be retrieved from the MIS.

Coordination among the department

Management Information System satisfy multiple need of an organization across the
different functional department.

Finding out Problems

As we know that MIS provides relevant information about every aspect of activities.
Hence, if any mistake is made by the management then MIS, information will help in
finding out the solution to that problem.

Comparison of Business Performance

MIS store all past data and information in its Database. That why the management
information system is very useful to compare business organization performance.

Strategies for an Organization

Today each business is running in a competitive market. An MIS supports the
organization to evolve appropriate strategies for the business to assent in a competitive
environment.
Challenges of MIS
What is MIS Challenges: There are three major challenges of MIS: high cost, training of
employees and maintenance cost. These are briefly discussed below:
1. High Cost
2. Training of Employee
3. Maintenance Cost
High Cost
Development of new computerized based information system is a problem for the
organization due to the cost factor and it creates problems because with the change of
time there is need of up-to-date of the information system.

Training of Employee
Employees should have the capacity of learning of the information system with the
changing competitive and business environment; otherwise it will be difficult for the
organization to stay in the market.

Maintenance Cost
Sometimes a problem arises due to server crash and website crash. Sometimes it leads to
the loss of information. So, maintenance cost is needed to tackle the above problem.

Limitations of MIS
Even though MIS has many benefits but it also has its limitations. Limitations of
MIS are discussed below:
 While MIS may solve some critical problems but it is not a solution to all
problems of an organization.

 It cannot meet the special demands of each person.

 MIS if designed in an improper manner does not serve the management and hence
is of little relevance.

 The MIS is not good if the basic data is obsolete and outdated.
 Mostly information provided by the MIS is in quantitive form. Hence, it ignores the
qualitative information like the attitude of an employee.

MIS at Different Levels

The needs of managers at various levels in the organization are different. Some need
information that is real-time and detailed while others need information that is aggregated
and covers a long period.

Those at the highest level of any organization, such as Managing Directors and Chief
Executives, usually need information that is aggregated, enables drilling down,
summarises all activities, and provides details about the industry at large. MIS that
provide reports for executives at this level is often called executive support systems
(ESS).

An example of a typical screen of an ESS is shown Some examples of information

provided by such systems are:

 A report on sales forecasts for all products, plotted against the forecasts for the entire
industry.

 A summary of cash balances for all divisions for the year, the month, and the week,
with the ability to drill down to details for all divisions.

 A summary of completion of all projects, with details of work remaining, estimated

overruns on time, and cost with comparison figures of projects in the past.
Executive support systems are usually highly visual with graphs, charts, and diagrams
used to convey most of the information. While designing these systems, the designers
must understand the style of functioning of the executive. ESS is usually linked to other
MIS and transaction processing systems and databases that provide industry data.

Managers in the organization, who report to the executives, use MIS and require reports,
examples of which have been provided above. The systems used by managers are usually
categorized as either MIS or Decision Support Systems. The latter use scientific models
of decision-making to help managers in the specific tasks of making decisions based on
available data.

Another class of employees, similar to managers but not directly involved with decision-
making, are the specialized knowledge workers such as designers, planners, and analysts.
They use transaction data and other data related to the industry and economy to make
strategic-level plans and do analyses for the organization. They too use sophisticated
models of analysis and produce reports that assist executives and managers with their
decision-making.

For example, strategic planners may consult the industry and economy data and compare
this with internal sales data to predict which products of the organization will have a
better chance of success in the competitive environment. Models such as time series
analysis and forecasting may be used to arrive at such analysis.

Requirements of Management
Information System
Following are the requirements of a management information system:

1. Database
2. Qualified System and Management Staff
3. Top Management Support
4. Active Participation of Operating Management
5. Control and Maintenance of Management Information System
6. Evaluation of Management Information System
Read Complete: Requirements of Management Information System

Summary
Management Information Systems (MIS), referred to as Information Management and
Systems, is the discipline covering the application of people, technologies, and
procedures collectively called information systems, to solving business problems.

Got to Topic: 1. What is MIS? 2. MIS Definition 3. MIS Meaning 4. MIS

Components 5. MIS Objectives 6. MIS Characteristics 7. MIS Advantage 8. MIS
Role 9. MIS Challenges 10. MIS Limitations 11. Requirements of Management
Information System
Next steps
Explore whether a career in MIS might be a good fit by trying a course like Information
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FAQ
What is MIS? (Management Information Systems)
MIS is the acronym for Management Information Systems. MIS is a set of procedures
which, when executed, provides information to support decision making.
MIS Definition
Management Information System (MIS) is an integrated man/machine system for
providing information to hold up the operations, management and decision making
functions in an organization. – G.B. Davis
Characteristics of MIS
Following are the Characteristics of MIS:
System Approach
Management Oriented
Need-Based
Exception Based
Future Oriented
Integrated
Long Term Planning
Sub-System Concept
Central Database
Components of MIS
The major components of MIS are:
People Resources
Data Resources
Software Resources
Hardware Resources
Process
Objectives of MIS
MIS has five major objectives which include:
Data Capturing
Processing
Storage
Retrieval
Dissemination
Role of MIS
There are many roles of MIS and some of the important MIS role are:
Decision making
Coordination among the department
Finding out Problems
Comparison of Business Performance
Strategies for an Organization

Reference
1. Sadagopan, Management Information System, 2007, Prentice Hall of India.
2. McLeod, R. and George P Schell (2008). Management information systems (10th ed.).
Pearson Education India
3. C. W. Frenzel and J. C. Frenzel, 2004. “Management of Information Technology”, 4th
edition Thomson course technology, Cengage Learning.
4. Laudon, K. C. & Laudon, J. P. Management Information Systems: Managing the
Digital Firm. 10th ed. Prentice-Hall and Pearson Education, 2006.
5. http://ocw.mit.edu