Management Information System

UNIT 1
Meaning and basic concept of Information Technology
What is information technology?
Information technology (IT) is the use of any computers, storage, networking and other physical
devices, infrastructure and processes to create, process, store, secure and exchange all forms of
electronic data. Typically, IT is used in the context of business operations, as opposed to
technology used for personal or entertainment purposes. The commercial use of IT encompasses
both computer technology and telecommunications.

What does information technology encompass?

The IT department ensures that the organization's systems, networks, data and applications all
connect and function properly. The IT team handles three major areas:

1. deploys and maintains business applications, services and infrastructure (servers, networks,
storage);
2. monitors, optimizes and troubleshoots the performance of applications, services and
infrastructure; and
3. Oversees the security and governance of applications, services and infrastructure.

The Important Business Objectives of Information Technology

1. Operational Excellence: A business that runs efficiently and productively is a business
that is more able to minimize overhead costs and maximizes its resources. The less efficient
your operations are, the less productive your employees will be. Information Technology will
allow you to streamline work processes and improve communication within the company,
thereby helping your employees save time and making your operations much more efficient.
2. New Products, Services, and Business Models: Information Technology can help your
company discover better business models and identify new types of products and services to
offer your customers. If you don’t adopt new IT solutions, your products and services are
likely to grow stale. Consumers demand constant innovation, especially as technology
continues to evolve to match their ever-changing needs and desires.
3. Customer and Supplier Intimacy: The use of Information Technology makes it easier to
engage with customers and suppliers, which, in turn, allows you to be more effective in
building long-term relationships with both. This can be done by positioning yourself to
support both customers and suppliers in a more organized and efficient way; for example, you
can improve the ease of which you can be reached by having representatives available by
phone, email, live website chat, and via social media. Additionally, business-to-business
 (B2B) integrations can streamline transactions and create“stickiness” for important
customers and suppliers.

5. Improved Decision Making: Crafting an IT budget is an important and difficult task in any
company. But without a technology roadmap, it is often more difficult to predict what IT systems
a business needs to optimally fulfill its goals. Without a strategy in place, executives are
typically unable to know how to strategically use the requisite IT solutions to fulfill the
overarching business vision. Thus, having a technology roadmap can help a business to
effectively budget for the future.

5. Competitive Advantage: Often a company will lack an overall, executive-level agreement

on how to leverage IT systems for the furthering of the organization’s goals. A technology
roadmap identifies where the business wants to be in the future, and how technology can help the
enterprise get there, thereby helping a company to plan the use of IT systems to achieve both
short-term and long-term goals.

6. Survival: A decade ago, you could argue that Information Technology was a luxury reserved
for bigger businesses with bigger budgets. However, that has all changed due to the fact that
everyone has access to newer, more advanced technology — including your customers. This
means that in order to stay relevant within your industry and to keep up with your competitors,
you need to implement IT to simply survive.

Meaning and basic concept of Information System

An information system (IS) is a formal, sociotechnical, organizational system designed to

collect, process, store, and distribute information. From a sociotechnical perspective, information
systems are composed by four components: task, people, structure (or roles), and
technology. Information systems can be defined as an integration of components for collection,
storage and processing of data of which the data is used to provide information, contribute to
knowledge as well as digital products that facilitate decision making.
A computer information system is a system that is composed of people and computers that
processes or interprets information. The term is also sometimes used to simply refer to
a computer system with software installed.
"Information systems" is also an academic field study about systems with a specific reference
to information and the complementary networks of computer hardware and software that people
and organizations use to collect, filter, process, create and also distribute data. An emphasis is
placed on an information system having a definitive boundary, users, processors, storage, inputs,
outputs and the aforementioned communication networks.
The six components that must come together in order to produce an
information system is:

1. Hardware: The term hardware refers to machinery and equipment. In a modern

information system, this category includes the computer itself and all of its support
equipment. The support equipment includes input and output devices, storage devices
and communications devices. In pre-computer information systems, the hardware might
include ledger books and ink.
2. Software: The term software refers to computer programs and the manuals (if any) that
support them. Computer programs are machine-readable instructions that direct the
circuitry within the hardware parts of the system to function in ways that produce useful
information from data. Programs are generally stored on some input/output medium,
often a disk or tape. The "software" for pre-computer information systems included how
the hardware was prepared for use (e.g., column headings in the ledger book) and
instructions for using them (the guidebook for a card catalog).
3. Data: Data are facts that are used by systems to produce useful information. In modern
information systems, data are generally stored in machine-readable form on disk or tape
until the computer needs them. In pre-computer information systems, the data are
generally stored in human-readable form.
4. Procedures: Procedures are the policies that govern the operation of an information
system. "Procedures are to people what software is to hardware" is a common analogy
that is used to illustrate the role of procedures in a system.
5. People: Every system needs people if it is to be useful. Often the most overlooked
element of the system is the people, probably the component that most influence the
success or failure of information systems. This includes "not only the users, but those
who operate and service the computers, those who maintain the data, and those who
support the network of computers.
6. Internet: is a combination of data and people . (Although this component isn't necessary
to function).
Data is the bridge between hardware and people. This means that the data we collect is only data
until we involve people. At that point, data is now information.

What is System?
A system is a group of interacting or interrelated elements that act according to a set of rules to
form a unified whole. A system, surrounded and influenced by its environment, is described by
its boundaries, structure and purpose and expressed in its functioning. Systems are the subjects of
study of systems theory and other systems sciences.
 Meaning and basic concept of Management Information System
A management information system (MIS) is a computer system consisting of hardware and
software that serves as the backbone of an organization’s operations. An MIS gathers data from
multiple online systems, analyzes the information, and reports data to aid in management
decision-making.

Components of Management Information System

1. Management
Management can be defined as the procedure of planning and regulating the operation of an
organisation . Framing of policies, its execution and stopping of employees are its key task. The
management procedure can be analysed with the help of managers actions.
These are as follows :
 Planning
 Staffing
 Organising
 Directing
 Coordination
 Controlling

2. Information:
The word information is derived from latin word 'informer' which means 'give form to'
information is data that has been processed and retrieved in such a way to that it is meaningful to
person who received it.

3. System:
A group of elements is called system these elements are called subsystem. All subsystem are
grouped together to serve a common purpose.

Features of Management Information System

1) Integrative system: An MIS is logically integrated system comprising of subsystem, where
activities of each are interrelated . this integration is possible by the auto rotation of data among
the sub system.
2) Sub- system concept: Alto system is considered a single entity, but a big system is divided
into sub system. so that one such system can be implemented at a time , for better effectiveness.
3) Provides relevant information to management: MIS should provide only relevant
information to managers. At times , determining relevant information becomes very difficult,
especially when and analyses of problems is done differently by different managers, according to
 the varying circumstances.thus, MIS provides relevant information and helps in reducing
confusion and solving problems.
4) Flexible: A MIS must be one that can be easily modified to changing circumstances. It must
be capable of expansion, accommodate growth or new type of processing activity and
contraction as and when required.
5) Enhances productivity: MIS oh whole improves the efficiency of an organisation. It helps in
efficient document preparation, provides high level of services to individuals and external
organisation, help in early detection of warning about internal and external problems ,and also in
identifying opportunities. It assists in the overall management of organisation and improves the
managers ability to deal with unexpected problems.
6) Co-ordinate system: MIS is centrally synchronized so that all its components such as data
processing, office automation , intelligence and decision support system, are developed and
managed in a planned and coordinated manner.
7) Feedback System: MIS provides feedback about its own efficiency and effectiveness. The
system itself provides statistics about by 'whom and 'how much' the system has been used.
8) Management Oriented : MIS is design from top to bottom corner but not necessarily start
from the management needs of the overall business goals. this means that the system may be
developed keeping in mind the needs of the middle /operation management as well as the top
management to stop .this ensures a good MIS.
9) Management Directed : It is imperative that management should dynamically direct and
development of system because Management Information System is management oriented.
Management should decided that information is required and hence help in designing MIS.
10) Common Database : Since MIS is an integrative system, it has the opportunity to avoid
duplication and redundancy in data collection, storage and sharing. One master file should be
maintained , which can then use be different function areas from their respective report
preparation and analysis.
Need of Management Information System
An organisation must have a very clear version about requirements such as type of information
required, type of data available , type of stakeholders etc, at different levels of Management.
An Organisation established and MIS for the following reasons:

 Efficiently storing and managing data of all business functional areas.

 Fast and accurate delivery of information, as and when needed.
 Processing of gathered data and developing information from it.
 Information availability for production and inventory.
 Providing information about current economic status of company.
 Faster implementation of results available from reliable data sources.
 Smooth flow of data within various levels of organisation.
 Make availability of information required for planning organizing and monitoring business
process.

Purpose and Objectives of Management Information System

1) Data Capturing: MIS gathers information from various internal and external either manually
or electronically with the use of computer terminals.

2) Processing of Data: The collected data goes through a number of process like calculation ,
sorting, classification and summary for its conversion information.

3) Storage of information: The processed or the unprocessed data stored in the MIS for
future use by saving it as an organization record. The data may also be used immediately.

4) Retrieval Of Information:As per the request of different uses, retrieval of information is

done by MIS from its stores.

5) Dissemination of information: Information is the final product of MIS which is equally

accessible by all users in the organisation. It may be periodic or online with the use of computer
terminal.

Role of Information Technology in MIS

Information technology (IT) has become a vital and integral part of every business plan. From
multi-national corporations who maintain mainframe systems and databases to small
businesses that own a single computer, IT plays a role. The reasons for the omnipresent use of
computer technology in business can best be determined by looking at how it is being used
across the business world.

1. Communication between Employees, Suppliers and Customers

For many companies, email is the principal means of communication between employees,
suppliers and customers. Email was one of the early drivers of the Internet, providing a simple
and inexpensive means to communicate. Over the years, a number of other communications
tools have also evolved, allowing staff to communicate using live chat systems, online meeting
tools and video-conferencing systems. Voice over internet protocol (VOIP) telephones and
smart-phones offer even more high-tech ways for employees to communicate.

2. Inventory Management Systems

When it comes to managing inventory, organizations need to maintain enough stock to meet
demand without investing in more than they require. Inventory management systems track the
quantity of each item a company maintains, triggering an order of additional stock when the
quantities fall below a pre-determined amount. These systems are best used when the inventory
management system is connected to the point-of-sale (POS) system. The POS system ensures
that each time an item is sold, one of that item is removed from the inventory count, creating a
closed information loop between all departments.

3. Data Management Systems

The days of large file rooms, rows of filing cabinets and the mailing of documents is fading
fast. Today, most companies store digital versions of documents on servers and storage
devices. These documents become instantly available to everyone in the company, regardless
of their geographical location. Companies are able to store and maintain a tremendous amount
of historical data economically, and employees benefit from immediate access to the
documents they need.

4. Management Information Systems

Storing data is only a benefit if that data can be used effectively. Progressive companies use
that data as part of their strategic planning process as well as the tactical execution of that
strategy. Management Information Systems (MIS) enable companies to track sales data,
expenses and productivity levels. The information can be used to track profitability over time,
maximize return on investment and identify areas of improvement.Managers can track sales on
a daily basis, allowing them to immediately react to lower-than-expected numbers by boosting
employee productivity or reducing the cost of an item.

5. Customer Relationship Management

Companies are using IT to improve the way they design and manage customer relationships.
Customer Relationship Management (CRM) systems capture every interaction a company has
with a customer, so that a more enriching experience is possible. If a customer calls a call
center with an issue, the customer support representative will be able to see what the customer
has purchased, view shipping information, call up the training manual for that item and
effectively respond to the issue.

MIS as an instrument for organizational change.

External change:

1. MIS has made world smaller

2. World wide reorganization environment and attempt to control the calamity .

3. Health conscious among the group leading less feeling.

4. Ceating knowledge is an asset.

Internal change:

1. MIS will change the business process.

2. MIS will change the old standards and set new standards.

3. MIS key for continue improvement process.

4. MIS focus on shared information.

5. MIS brings cultural change.

6. MIS measures the result and performance.