MIS-BASIC INFORMATION CONCEPT

Information can be defined as meaningfully interpreted data. If we give you a number 1-212-290-4700, it
does not make any sense on its own. It is just a raw data. However, if we say Tel: +1-212-290-4700, it starts
making sense. It becomes a telephone number. If I gather some more data and record it meaningfully like −
Address: 350 Fifth Avenue, 34th floor
New York, NY 10118-3299 USA
Tel: +1-212-290-4700
Fax: +1-212-736-1300
It becomes a very useful information - the address of New York office of Human Rights Watch, a non-profit,
non-governmental human rights organization.
So, from a system analyst's point of view, information is a sequence of symbols that can be construed to a
useful message.
An Information System is a system that gathers data and disseminates information with the sole purpose of
providing information to its users.
The main object of an information system is to provide information to its users. Information systems vary
according to the type of users who use the system.
A Management Information System is an information system that evaluates, analyzes, and processes an
organization's data to produce meaningful and useful information based on which the management can take
right decisions to ensure future growth of the organization.

Information Vs Data
Data can be described as unprocessed facts and figures. Plain collected data as raw facts cannot help in
decision-making. However, data is the raw material that is organized, structured, and interpreted to create
useful information systems.
Data is defined as 'groups of non-random symbols in the form of text, images, voice representing quantities,
action and objects'.
Information is interpreted data; created from organized, structured, and processed data in a particular
context.
According to Davis and Olson −
"Information is a data that has been processed into a form that is meaningful to recipient and is of real or
perceived value in the current or the prospective action or decision of recipient."

Information, Knowledge and Business Intelligence

Professor Ray R. Larson of the School of Information at the University of California, Berkeley, provides
an Information Hierarchy, which is −
 Data − The raw material of information.
 Information − Data organized and presented by someone.
 Knowledge − Information read, heard, or seen, and understood.
Scott Andrews' explains Information Continuum as follows −
 Data − A Fact or a piece of information, or a series thereof.
  Information − Knowledge determined from data.
 Business Intelligence − Information Management relating to an organization's policy or decision-
making, particularly when tied to strategic or operational objectives.

Information/Data Collection Techniques

The most popular data collection techniques include −

 Surveys − A questionnaires is prepared to collect the data from the field.
 Secondary data sources or archival data: Data is collected through old records, magazines, company
website etc.
 Objective measures or tests − An experimental test is conducted on the subject and the data is
collected.
 Interviews − Data is collected by the system analyst by following a inflexible procedure and collecting
the answers to a set of pre-conceived questions through personal interviews.

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.

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

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 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:

 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.

Components of MIS

Objectives of MIS
MIS has five major objectives which include:

1. Data Capturing
2. Processing of Data
3. Storage
4. Retrieval
5. Dissemination or broadcasting

Objectives of MIS:
These MIS objective are discussed below in detail.

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

2. 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.

3. 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.

4. Retrieval of Information
MIS retrieves information from its stores as and when required by various users.

5. 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
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 complete approach
to the study of system and its performance in the light for the objective for which it has been established.

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 provide 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 outside broadmindedness 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
purely 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 edible sub-systems which are more
meaningful at the planning stage.

Central Database
A central database is a filling 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.

Advantages of MIS
1. Generate Competitive Advantages
2. Implementation of Management by Objectives Techniques
3. Fast Reaction to Market Changes
4. MIS as Strategic Resource
5. Change in Industry Structure
6. Functional Use
7. External and Internal Change
8. 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 exhausted, 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.
 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’ negotiating power

 Suppliers’ negotiating power
 Threats of new applicant in market
 Pressure from substitute products and services and u Existing industry competitors
 Birth of new business/ New business initiatives.

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.

OR
Advantage of MIS

A good management information system can be used not only for the storage of electronic data alone but
must be able to support the analysis required by management. There are many advantages of MIS which
are utilised by manager to achieve organization goal.
The following are some of the benefits of a good MIS.

 Increased customer satisfaction

 Improved quantity and quality of information
 Improved quality and quantity management
decisions
 Improved responsiveness number of the
competitor’s condition
 Improved operational efficiency and
flexibility
 Improved quality of internal and external
communications
 Improved quality of planning
 Improved quality control and supervision

Role of MIS

A management information system (MIS) plays an important organizations. 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

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

There are three major challenges of MIS:

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.

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

1. Database
As we know it is a super file which has all records or data related to a particular organization at one place.
It will lead to a reduction of redundant duplication. However, this master file is sub-divided into the major
information subsets needed to run a business.

These sub-sets are:

 Customer calls file

 Supplier file
 Employee file
 Inventory file
 General record accounting file.
Database should be user-oriented and should be capable of being used as a common data source for
different users and avoid duplication of efforts in storage and retrieval of necessary data and information.
Database should be authorized to be viewed by an authorized person.

So it should be controlled by a separate authority that is a DBA (Database Administrator). The maintenance
of database requires computer hardware, software and computer professionals who are experienced and
qualified too.

In addition to this, it requires a good data collection system having system experts who know the various
techniques of data collection as well as knowledge of the working of the company.

2. Qualified System and Management Staff

In a Management Information System we have two types of experts:

 One computer and system expert who prepares the system and
 Other the management staff who directs the system experts about their needs and
requirements from a Management Information System.

Both of them should have expertise in their respective fields. But they must possess certain knowledge of
other fields also.

For example, system experts must have some knowledge of management concepts so that they can better
understand what the management wants from them. Same is the case with management experts. They
must have some basic knowledge of computer, so they can help the computer experts in designing as well
as independently use the system.

This prerequisite is a very ideal situation but it has to face the problem of procurement of suitable experts.
The problem is overcome by recruiting fresh candidates because they can work with experienced people
that are already working on the project. Or we could hire a qualified person and retain them also.

3. Top Management Support

To use or implement the Management Information System effectively, it must have top management
support. Top management support is also required for some behavioural aspects of the subordinates
because they are ready to perform those activities which are supported by the top management.

The other reason why top management support is essential is that the resources involved in Management
Information System are very large and it is the policy matter which is decided by the top management only.

To gain the support from top management, the persons who are in favour of installing Management
Information System in the organization must place the cost and benefit analysis of having a Management
Information System and other supportive facts before the top management.

This action of subordinates will lead to change in the attitude of top management towards Management
Information System and they will give their full support.

4. Active Participation of Operating Management

As the support of top management is a prerequisite, the active participation of operating management is
also a basic requirement of successful implementation of Management Information System.

There is some behavioural problem among the operative staff, that after implementing Management
Information System their service would no more be required and they would need the help of some
outsider while performing their work.

These problems can also be handled by educating the operative management about the benefits of the
Management Information System.
 5. Control and Maintenance of Management Information System
Control of the Management Information System means to control the operation of the system as it was
designed to operate. Sometimes users develop their own procedure or shortcuts to use the system that
may reduce its effectiveness.

To check such practices, the management at each level should devise check mechanism for information
systems control. Maintenance means alterations and modifications according to the need and
requirements of the user. So there must be some scope of improvement in the system.

6. Evaluation of Management Information System

The Management Information System should be evaluated at regular time intervals to meet the future
needs.

The evaluation process must have the following steps

 Evaluate whether flexibility exists in the system to cope with any expected or unseen
information requirement in future.
 Take the feedback from users as well as designers about the capabilities and shortcomings in
the system.
 Guiding the appropriate authority about the criterion to be taken to maintain the effectiveness
of Management Information System.

Organizational structure and MIS

MIS has been described as a pyramidal structure, with four levels of information resources. The levels of
information would depend upon the organizational structure. The top level supports strategic planning and
policy making at the highest level of management. The second level of information resources aid tactical
planning and decision making for management control. The third level supports day-to-day operations and
control. The bottom level consists of information for transaction processing. It then follows that since
decision making is specific to hierarchical levels in an organization, the information requirements at each
level vary accordingly.

Thus, MIS as a support system draws upon:

 concepts of organization;
 organizational theories, principles, structure, behaviour and processes such as
communication, power and decision making; and
 motivation and leadership behaviour.

Information requirements for MIS

Assessing information needs

A first step in designing and developing an MIS is to assess the information needs for decision making of
management at different hierarchical levels, so that the requisite information can be made available in
both timely and usable form to the people who need it. Such assessment of information needs is usually
based on personality, positions, levels and functions of management. These determine the various levels
of information requirements.

Table 1 Organizational structural implications for information systems

Concept Implications for Information Systems

Hierarchy of authority A tall hierarchy with narrow span of control requires more formal control
information at upper levels than a flat hierarchy with wide span of control.
Specialization Information system applications have to fit the specialization of the
organization.
 Formalization Information systems are a major method for increasing formalization.
Centralization Information systems can be designed to suit any level of centralization.
Modification of basic Information systems can be designed to support product or service
model organizations, project organizations, lateral relations and matrix organizations.
Information model of Organizational mechanisms reduce the need for information processing and
organization communication. Vertical information systems are an alternative to lateral
relations. Information systems are used to coordinate lateral activities.
Organizational culture Organizational culture affects information requirements and system
acceptance.
Organizational power Organizational power affects organizational behaviour during information
system planning, resource allocation and implementation. Computer systems
can be an instrument of organizational power through access to information.
Organizational growth The information system may need to change at different stages of growth.
Goal displacement When identifying goals during requirements determination, care should be
taken to avoid displaced goals.
Organizational learning Suggests need for information system design for efficiency measures to
promote single loop learning and effectiveness measures for double loop
learning.
Project model of Describes general concepts for managing change with information system
organizational change projects.
Case for stable system Establish control over frequency of information system changes.
Systems that promote Reporting critical change variables, organizational change, or relationships,
organizational change and use of multiple channels in a semi-confusing system may be useful for
promoting responses to a changing environment.
Organizations as socio- Provides approach to requirements determination and job design when both
technical systems social and technical considerations are involved.

Levels of information requirements

There are three levels of information requirements for designing an MIS. They are:

 At the organizational level, information requirements define an overall structure for the
information system and specific applications and database.
 Application level requirements include social or behavioural - covering work organization
objectives, individual roles and responsibility assumptions, and organizational policies - and
technical, which are based on the information needed for the job to be performed. A significant
part of the technical requirement is related to outputs, inputs, stored data, structure and format of
data and information processes.
 At the user level, database requirements can be classified as perceived by the user or as required
for physical design of the database.

Strategies for determining information requirements

Table 2 Strategies for determining information requirements

1. Identify elements in the development process

· Utilizing systems
· Information system or application
· Users
· Analysis
2. Identify characteristics of the four elements (in 1, above) in the development process which could
affect uncertainty in the information requirements.
3. Identify the process uncertainties
· Existence and availability of a set of usable requirements.
· Ability of users to specify requirements.
· Ability of the analyst to elicit and evaluate information requirements.
Assess how the characteristics of the four elements in the development process (listed under 1, above)
will affect the these process uncertainties.
4. Determine how the overall requirements uncertainties would be affected by the combined effects of
the process uncertainties.
5. Considering the overall requirements uncertainty, choose a primary strategy for information
requirements.
If uncertainty is low, then the strategy should be to:
· Ask the users what their requirements are. This presupposes that the users are able to structure their
requirements and express them objectively. Asking can be done through
- questions, which may be closed or open,
- brainstorming sessions, totally open or guided, and group consensus ·

6. Wherever there are close similarities in the organization and easy replication is possible, information
requirements can be derived from the existing system.
· Characteristics of the utilizing system should be analysed and synthesized. This is particularly useful if
the utilizing system is undergoing change.
If uncertainty is high, discover from experimentation by instituting an information system and learning
through that the additional information requirements. This is 'prototyping' or 'heuristic development' of an
information system.
6. Select an appropriate method.

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:

One of the major challenges facing firms today is putting together data from the systems we have just
described to make information flow across the enterprise. Electronic commerce, electronic business, and
intensifying global competition are forcing firms to focus on speed to market, improving customer service,
and more efficient execution. The flow of information and work needs to be orchestrated so that the
organization can perform like a well-oiled machine. These changes require powerful new systems that can
integrate information from many different functional areas and organizational units and coordinate firm
activities with those of suppliers and other business partners.

Business Processes and Information Systems

The new digital firm business environment requires companies to think more strategically about their
business processes, which we introduced in Chapter 1. Business processes refer to sets of logically related
activities for accomplishing a specific business result. Business processes also refer to the unique ways in
which organizations and management coordinate these activities. A company’s business processes can be
a source of competitive strength if they enable the company to innovate better or to execute better than its
rivals. Business processes can also be liabilities if they are based on outdated ways of working that impede
organizational responsiveness and efficiency.

Some business processes support the major functional areas of the firm, others are cross-functional.
Table 2-6 describes some typical business processes for each of the functional areas.

TABLE 2-6 Examples of Functional Business Processes

 Many business processes are cross-functional, transcending the boundaries between sales,
marketing, manufacturing, and research and development. These cross-functional processes cut across the
traditional organizational structure, grouping employees from different functional specialties to complete a
piece of work. For example, the order fulfillment process at many companies requires cooperation among
the sales function (receiving the order, entering the order), the accounting function (credit checking and
billing for the order), and the manufacturing function (assembling and shipping the order). Figure 2-12
illustrates how this cross-functional process might work. Information systems support these cross-functional
processes as well as processes for the separate business functions.

FIGURE 2-12 The order fulfillment process

Generating and fulfilling an order is a multistep process involving activities performed by the sales,
manufacturing and production, and accounting functions.

Importance of Management Information System:

In present business organizations, MIS play a very important role. It is a process of collection and storing of
the data useful for the organization. Executives retrieve these data, when required and processed them for
generating information. Executives determine the future course of action of the organization over the long
and short-term periods.

The responsibility of corporate executives is decision making, laying down policy, planning, organizing,
controlling, directing, communicating, and motivating, evaluating and gathering things done to meet the
overall objectives and goals of the organization. MIS provides information regarding all these aspects of
managing.

Previously, the business organizations were not perceived as a system. All the functional areas were
independent and there was not a cross discussion amongst the managers of different functional areas. At
that time, sale was considered only the marketing phenomenon and the sale force was solely responsible
for the achievement of the sales target.

However, in present days, all departments hold equal responsibility. If there is any problem in selling
goods, all the members concerned of Marketing and Production departments sit together and find out the
fault after recognizing the problem(s). Appropriate steps are taken to find out the ways to achieve the sales
target. This mechanism helps the organization to achieve its objectives efficiently and economically.

Thus, the following points can summarize the importance of MIS:

1. It helps in minimizing risk in decision making.
2. It processes the data and derives information out of them.
3. It provides information about the various aspects of business.
4. It helps the executives to avail the information regarding the functional areas quickly.
5. The database helps in inducting research. The data stored are used as secondary data.
6. It provides sound information regarding the financial health of business organization.
7. It helps in preparing corporate report.
8. It helps the HRD manager in finding out the requirement of the human resource, their wages
and salary, performance appraisal, training, promotion, absenteeism and employee’s turnover,
which is useful in drafting sound HRD polices.
9. The data regarding production helps the production manager in deciding about capacity
utilization, number of rejections per batch, frequency of break down, status of shipment of
processed order and product, region wise.
10. It provides information regarding inventory position, and ensures that the chances of inventory
out of stock may be minimized.
11. It provides information regarding product, price, promotion, segmentation, demand, sale etc. to
marketing manager instantly and ensures smooth functioning of that department.
12. At present, every business organization is giving due importance to this department. The credit
of growth and development of many of the business organizations goes to it. If organization
underestimates the importance of MIS, they may have greater changes of generating negative
profit.

Limitations of Management Information System :

MIS takes into account mainly quantitative factors, thus it ignores the non-quantitative factors like morale,
attitudes of members of the organisation, which have an important bearing on the decision making
process of executives.

MIS is less useful for making non-programmed decision making. Such types of decisions are not of routine
type and thus they require information, which may not be available from existing MIS to executives. MIS
effectiveness decreases due to frequent changes in top management, organisational structure and
operational team.

MIS is not a substitute for effective management. It means that it cannot replace managerial judgement in
making decisions in different functional areas. It is merely an important tool in the hands of executives for
decision making and problem solving.

The quality of the outputs of MIS is basically governed by the quality of inputs and processes.
MIS may not have requisite flexibility to quickly update itself with the changing needs of time, especially in
a fast changing and complex environment.
The effectiveness of MIS is reduced in organisation, where the culture of hoarding information and not
sharing with others hold.

Nature of Management Information System

Management Information Systems (MIS) can be simply referred to as a system or process that facilitates
the smooth working of the organisation. The nature of MIS is truly multifold because it plays a bigger role in
business decisions, from costs to employee management. Here are the major features that portray the
nature of MIS:

 MIS is utilised by every level of a management.

 It clarifies and focuses on the strategic goals and objectives for the management.
 MIS provides an effective system to analyse costs and revenues and further reviews effectively
and efficiently to bring a balanced in finances and costs.
 MIS is maintained either through manual systems or automated systems or a combination of both.
 It also plays a incremental role in identifying, locating, measuring, tackling and limiting risks.
 It lays down a framework of rules and regulations for the management to bring a clear and concise
communication between employees.
 MIS provides an objective system of collecting, assessing and aggregating information for a
business.

Scope of MIS

After understanding what is MIS and the nature of management, we move on to the scope of MIS.
Information Systems is growing at a fast pace to become one of the most promising career fields in today’s
world. With everything happening digitally, the demand for MIS professionals is increasing more than ever.
MIS involves performing a number of task simultaneously such as-

 Processing data
 Initiating transactions
 Responding to inquiries
 Producing reports and its summaries
 Manage the data created within the structure of a particular business

MIS acts in an organization just like a nervous system in a body by providing with the relevant information
for ease in the process of decision making.

The purpose of MIS is to work towards satisfying the information needs of everyone in the business. It
means providing the relevant information to those who need it.

Thus, MIS has a lot of potential to become one of the most promising careers for individuals interested in
the workings of a business.

Objectives of MIS

The scope of MIS also involves understanding the objectives of MIS. mentioned below are the various
objectives of MIS for your reference.

 Gathering Data– MIS professionals work on gathering data which might be useful and relevant in
the decision making process for various internal and external sources of the organization.
 Data Processing- The gathered data needs to be processed in a systematic way so as to be of
some help to the management. The data is processed into information which is used for planning,
controlling, organizing and directing functionalities at different levels of the organization. Data
processing means sorting data, making calculations with data etc.
  Information Storage– It means storing information in a safe manner so as to make it available for
any future use.

Characteristics of MIS

The scope of MIS and nature of management cannot be realised fully without understanding the
characteristics of MIS. Mentioned below, for your reference, are the various characteristics of MIS.

 MIS is based on strategic, operational and tactical information of managers of an organization.

 It relies completely on existing corporate data and data flows.
 It is an inflexible work.
 Creates a linkage between different subsystems within the organization itself.
 Allows easy flow of information.
 Provides a holistic view of the dynamics and structure of the organization.
 MIS is based on long term planning.

Stages of Management Information System

There are three main stages of Management Information System (MIS):

 Planning of MIS
Factors considered in this phase of MIS: Strategic Planning, Information Requirement Analysis,
Resources Allocation and Project Planning
 Structure of MIS
Components to determine the structure of MIS: Operation Systems, Decision Support System,
Activities of Management, Functions in an organisation
 Implementation of MIS
The activities for implementation of MIS are: Planning for implementation, Personnel Education
and Training, Use of new system and acceptance, equipment and software installation,
documentation and file conversion.

What is the Future of MIS?

As the world is embracing the digital wave, the future of MIS is surely vibrant. More and more business are
adapting AI technologies as well as digital systems to smoothen their workings and that’s where the scope
of MIS is quite bright. MIS jobs are bound to boost in the future as we adapt to more and more digital tools
in our businesses and we would need more proficient tech professionals to operate such systems. Here
are the major areas where the future of MIS jobs lies:

 Information Technology (IT)

 Risk Management
 Financial Management
 Business Analytics
 Digital Banking
 Healthcare Administration
 Hotel Management
 Hospital Management
 Digital Marketing and Analytics

IMPACT OF THE MANAGEMENT INFORMATION SYSTEM

 MIS plays a very important role in the organization; it creates an impact on the organization’s
functions, performance and productivity.
  The impact of MIS on the functions is in its management with a good MIS supports the
management of marketing, finance, production and personnel becomes more efficient. The
tracking and monitoring of the functional targets becomes easy. The functional managers are
informed about the progress, achievements and shortfalls in the activity and the targets. The
manager is kept alert by providing certain information indicating and probable trends in the
various aspects of business. This helps in forecasting and long-term perspective planning. The
manager’s attention is bought to a situation which is expected in nature, inducing him to take an
action or a decision in the matter. Disciplined information reporting system creates structure
database and a knowledge base for all the people in the organization. The information is available
in such a form that it can be used straight away by blending and analysis, saving the manager’s
valuable time.
 The MIS creates another impact in the organization which relates to the understanding of the
business itself. The MIS begins with the definition of data, entity and its attributes. It uses a
dictionary of data, entity and attributes, respectively, designed for information generation in the
organization. Since all the information systems use the dictionary, there is common understanding
of terms and terminology in the organization bringing clarity in the communication and a similar
understanding of an event in the organization.
 The MIS calls for a systematization of the business operations for an effective system design. This
leads to streaming of the operations which complicates the system design. It improves the
administration of the business by bringing a discipline in its operations as everybody is required to
follow and use systems and procedures. This process brings a high degree of professionalism in
the business operations.
 The goals and objectives of the MIS are the products of business goals and objectives. It helps
indirectly to pull the entire organization in one direction towards the corporate goals and
objectives by providing the relevant information to the organization.
 A well designed system with a focus on the manager makes an impact on the managerial
efficiency. The fund of information motivates an enlightened manager to use a variety of tools of
the management. It helps him to resort to such exercises as experimentation and modeling. The
use of computers enables him to use the tools and techniques which are impossible to use
manually. The ready-made packages make this task simple. The impact is on the managerial
ability to perform. It improves decision-making ability considerably high.
 Since, the MIS work on the basic system such as transaction processing and database, the
drudgery of the clerical work is transferred to the computerized system, relieving the human mind
for better work. It will be observed that lot of manpower is engaged in this activity in the
organization. Seventy (70) percent of the time is spent in recording, searching, processing and
communicating. This MIS has a direct impact on this overhead. It creates information –based
working culture in the organization.

MIS - A Support to the Management

 The management process is executed through a variety of decisions taken at each step of
planning, organizing, staffing, directing coordinating and control. If the management is able to
spell out the decisions required to be taken, the MIS can be designed suitably. The decisions
required to be taken in these steps are tabulated in Table below.

Table: Decisions in Management

Steps in Management Decision

Planning A selection from various alternatives - strategies, resources,
methods, etc.
Organization A selection of a combination out of several combinations of the
goals, people, resources, method and authority.
Staffing Providing a proper manpower complement.
Directing Choosing a method from the various methods of directing the efforts
in the organization.
Coordinating Choice of the tools and the techniques for coordinating the efforts for
optimum results.
 Controlling A selection of the exceptional conditions and the decision guidelines

The objective of the MIS is to provide information for a decision support in the process of management. It
should help in such a way that the business goals are achieved in the most efficient manner. Since the
decision making is not restricted to a particular level, the MIS is expected to support all the levels of the
management in conducting the business operations. Unless the MIS becomes a management aid, it is not
useful to the organization.

Architcture of MIS:

 Management process:
Management process is basically a process of setting goals, planning, organizing, controlling and leading
the execution of any type of activities, such as a project or a process.
Management process comprises these functions:

1. Planning
2. Organizing
3. Staffing
4. Directing
5. Coordinating
6. Controlling
  Data Warehouse

Data Warehouse is a relational database management system (RDBMS) construct to meet the requirement
of transaction processing systems. It can be loosely described as any centralized data repository which can
be queried for business benefits. It is a database that stores information oriented to satisfy decision-making
requests. It is a group of decision support technologies, targets to enabling the knowledge worker (executive,
manager, and analyst) to make superior and higher decisions. So, Data Warehousing support architectures
and tool for business executives to systematically organize, understand and use their information to make
strategic decisions.

 Data Source :

A data source, in the context of computer science and computer applications, is the location where data
that is being used come from. In a database management system, the primary data source is the
database, which can be located in a disk or a remote server. The data source for a computer program can
be a file, a data sheet, a spreadsheet, an XML file or even hard-coded data within the program.

Classification of MIS

 Here, we are going to learn about the various classification of Management Information System
(MIS) based on information characteristics, application and business function.

MIS classification is a broad concept; this article facilitates you to have a crystal clear understanding about
the MIS classification. Here, we categories MIS into three main categories, these are,

1. Classification as per Information Characteristics

2. Classification as per Application
3. Classification as per Business Function

The below image is depicting about the classification with its sub categories,
1) Classification as per Information Characteristics

Based on Anthony's brand of Management, information that is used in commerce trade for decision-
making is generally categorized into three types:

 Strategic Information: Strategic information deals with an objective of a house with long-term
policy decisions as well as checks provided these objectives are met up to their level or not. For
example, acquiring the new plant, the new product, diversification of chain, etc, comes under
strategic information.
 Tactical Information: Tactical information deals with the information needed to rule over business
resources, like budgeting, bracket control, improvement level, stock level, productivity level, etc.
 Operational Information: Operational information deals with plant/business level information as
well as is used to handle proper conduction of specific operational tasks as planned/intended.
Various operators specific, machine-specific as well as shift particular jobs for quality authority
checks come under this category.

2) Classification as per Application

 Planned Information: This is the information used in business organizations maintaining

specification norms and specifications. Everything is mentioned here. This information is used in
the strategic, tactical, and operation planning of any activity. Examples of such information are
time standards, design standards.
 Control Information: This information is termed for specific activities performed by the system in
design to attain their objectives. This information might cost formal or informal. It is used for
controlling attainment, line, and utilization of important processes in a system. When this
information did make-up any deviation from the defining standards, the system should be
imposing a decision or an action main to authority the information related to their objectives.
 Knowledge Information: cognition is defined as "information about information". Knowledge
information is acquired through experience and learning and collected from archival data and
research studies.
 Organizational Information: Organizational information deals with an organization's environment,
where organizational objectives are met. Karl Weick's Organizational Information theory
emphasizes that a company reduces its uncertainty by collecting, managing, and using this
information carefully. This information is used by everybody in the organization; examples of such
information are employee and payroll information.
 Functional/Operational Information: This is operation-specific information where the organization
assists to perform its functions of day-day transactions. Mainly preserves technical make-up, For
example, daily schedules in a manufacturing plant that indicated the detailed assignment of jobs
to machines or machines to operators. In a value-oriented business, it would constitute the duty
roster of various personnel. This information is mostly internal to the organization.
 Database Information: Database information as we know that it is a collection of related data that
is stored, retrieved, and managed to name databases. It stores large quantities of information that
has multiple ownership and application. For example, the tangible substance that goes into the
makeup of physical thing specification or supplier information is stored for multiple users. It is a
type of software program.

3) Classification as per Business Function

  Transaction Processing System: TPS processes transactions and produces reports. It refers to the
automation of basic, repetitive processing that underpins business operations. It does not afford
any information to the user for his/her decision-making.
TPS uses data and produces data as proposed in the coming after or as a result of the diagram.
Previously, TPS was invited as the administration Information System. Data processing was used
by manual processes or with simple machines prior to the invention of computers. The TPS
domain is located at the bottom of an organization's management hierarchy.
 Management Information System (MIS): As MIS is a well-known information system to organize the
information, which processes data and converts it into meaningful information. A supervision
information system uses TPS for its data inputs. The information generated by the information
system may live used for sources of operations, strategic and long-range planning. Short-term
planning, supervision control, and other managerial problem solving encompass processing in
assist of a wide range of organizational functions & management processes. MIS is capable of
providing analysis, planning & decision developing support. Marketing, manufacturing, human
resources, finance, and accounting are some of the functional areas of a company.
 Decision Support System (DSS): A decision help system (DSS) is an information system a formal
request to be considered for a position or to be allowed to do or have something. That assists
decision-making. DSS be inclined with planning, analyzing alternatives, and trial and error search
for the solution. The elements of the decision support system include a database & software.
Finance, Production, and marketing are some of the main application areas of DSS.
Based on how information is processed, DSS can be distinguished from MIS. MIS processes data
to restyle it into information. DSS processes information to support the decision creating process
of a manager.
 Executive Support System (ESS): Executive Support System (ESS) is a reference of the
management information system, which is a special kind of DSS; An ESS is specially tailored for
the ownership of the chief executive of an association to support his decision-making. It includes
various types of decision-making but it is more specific and adult-oriented.
 Office Automation Systems (OAS): Office automation is referenced to the application of computes
and communication technology to office functions. Office automation systems are meant to
improvements the productivity of frameworks at various levels of management by providing
secretarial assistance and better communication facilities.
Below mentioned are the two main classes to categories Office activities, namely
o Activities executed by clerical staff like clerks, secretaries, typist etc
o Activities performed by the executives (managers, engineers or other experienced like
economist, researches etc.)

The major functional activities of OAS are -

o Typing
o Mailing
o Scheduling of meetings and conferences,
o Calendar keeping, and
o Retrieving documents

Below is a list of activities in the moment category (managerial category)

o Conferencing.
o Controlling output and producing information (messages, memos, reports, and so on).

An individual who is employed in or trained for a job is referred to as a businessperson. Systems: These
systems are one of the leading types of knowledge-based information systems. These systems are based
on artificial intelligence, and are contemporary information systems. A business professional system is a
strategic based information system that uses its strategic about a specific, complex application area to act
as an expert. The main components of a professional system are:

a. Knowledge Base
b. Interface Engine
c. User Interface