MIS Definition

• A computer-based system that makes information available to users with similar needs.

ExecutiveInformation

System(EIS)

Organizational Information Organizational Information SystemsSystems

Marketinginformation

system

Manufacturinginformation

system

Financialinformation

system

Human resourceinformation

system

MIS is an Organizational Resource

• Information– Past, present, future

– Periodic reports, special reports, simulations

• Similar needs– Functional area

– Management level

– Managers and nonmanagers

Report Writing Software

• Periodic and special reports may look the same, the difference is in what triggers the report

– periodic report - produced on a schedule

– special report - produced when something out of the ordinary occurs

An Overtime Earnings ReportAn Overtime Earnings Report

OVERTIME EARNINGS REPORTFOR WEEK ENDING AUGUST 19

OVERTIME EARNINGSDepartment No. Department Name Current Month Year-to-Date

16-10 Receiving $ 2,305.00 $ 5,319.2016-11 Inspection $ 1,025.60 $ 4,386.1216-12 Materials Handling $ 3,392.50 $12,629.0016-13 Tooling $ 78.00 $ 1,049.0016-14 Assembly $ 0.00 $ 792.8016-15 Plating $ 3,504.90 $12,635.2016-16 Shipping $ 5,219.16 $18,294.16 TOTALS $15,525.16 $55,105.48

SALES BY PRODUCT FOR THE MONTH OF JUNE

PRODUCT PRODUCT CURRENT MONTH YEAR-TO-DATE

NUMBER NAME SALES SALES

129875 GASKET CENTER CASE $ 5,090.23 $ 31,764.00

087235 MAINSHAFT 4,760.01 29,329.45

118320 1ST MOTION SHAFT 1,789.45 28,243.59

250067 OIL SEAL REAR 11,560.24 23,450.07

228203 LAYGEAR 8,369.34 14,709.03

576000 HUB 5TH .00 13,623.68

516012 SHIFT FORK 1-2 450.95 12,634.44

090407 SYNCHRO RING 2ND 2,243.27 9,963.58

282130 BUSH SHIFT LEVER .00 490.00

576301 OIL SLINGER .00 11.50

1980 1981 1982 1983 19840

10

20

30

40

50

60

70

80

90

1980 1981 1982 1983 1984

Apples Oranges Peanuts

0

10

20

30

40

50

60

70

80

90

1980 1981 1982 1983 1984

Apples

Oranges

Peanuts

Years

(c)

Years

(a)

GROUPED/MULTIPLE GROUPED/MULTIPLE LINE CHARTLINE CHART

GROUPED BAR GROUPED BAR CHARTCHART Sales RevenueSales Revenue

Putting the MIS in Perspective

• The first attempt to make information available to management

• Enjoyed its greatest prominence in the 1960s when it first originated

The MIS and Problem Solving

• Contributes because MIS is an organization-wide resource

• Contributes because it keeps a continuous supply of information to the manager for problem identification and understanding

Information Reporting Systems (IRS)

• Information is data that has been processed and is useful in decision making. it helps decision makers by increasing knowledge and decreasing uncertainty.

• IRS Provide the following;

– Correct and timely information to appropriate managers

– Information on medium and long range operations

– summarised information

Levels of ManagementLevels of Management

• Top Level Management Strategic Decision making

• Middle Level Management Tactical Decision Making

• Lower Level Management Operational Decision Making

Top Level Management

• Future Orientated and involves a great deal of uncertainty

• Involves establishing goals and objectives for the organisation

• May include the following;– Introducing new products, new markets, acquiring

facilities,

– raising capital, capital expenditure proposals etc

Middle ManagmentMiddle Managment

• Concerned with tactical decision making

• Implementing strategy.

• activities include;

– planning working capital, scheduling working capital, formulating budgets,

– managing personnel, etc

Lower Level Management

• First line supervisors

• Operating decisions to ensure specific jobs are done.

• examples

– stock control, selling, distribution, assigning jobs to staff

Differences across the Decision Making levels

Information Attribute

Scope

Orientation

Detail

Source

Accuracy

Timescale

Strategic

Wide

Future

Low

External

Low

Medium to long term

Operational

Narrow

Historic

High

Internal

High

Day to Day

Types of Reports

• Scheduled listings

• Exception Reports

• Predictive reports

• Demand Reports

Scheduled listings

• Produced at regular intervals and provide routine information to a wide variety of users.

• Suffer from information overload and problems of relevance

• Control and tracking oriented

• Examples– Stock Listings

– Standard costs

– Customer Balances

– Debtors listings

– Monthly Sales reports

Exception Reports

• Action Oriented

• Monitors the performance of the business and any deviation from expected results triggers the generation of a report.

• Examples– Stock Out Reports

– Bad debts Report

– Customer complaints

Predictive Reports

• Used for planning what if models,

• Examples– MRP

– Budgeting

Demand Reports

• Solicited by managers

• Normally produced on line and from a database

• Examples– Correlation reports

– Capital expenditure Evaluations

Internal versus External Information

• Interest rates

• Exchange Rates

• Competitor Actions

• Industry News

• Socio Economic Information

• Pricing

• Strategic Initiatives by Competitors

• Regulations

Non Financial Performance Measurement

Performance Measurement

• Much of the data currently reported by Executive Information Systems is based on Financial Performance Measures. These have several shortcomings including;

There are based on the general accounting model They tend to be lagging as indicators of future

performanceThey are often not used by mangers when their

making decisions They can be manipulated or gamed both internally and

externally.They tell an incomplete story.

• The objective of many of these measures is to achieve a balanced score card form of reporting for management with financial, customer, quality and innovation information reported in tandem.Order Cycle TimesPercent of Orders delivered on timeInventory TurnoverWarranty Claim RatesService OutagesOrder fulfilment accuracyFriendliness of customer service staff

Non Financial Performance Measures

– Response time to customers callsShareholder Value AnalysisDesign to market TimeEmployee TurnoverProcess Cycle TimesTime to marketCapacity utilisationSet up TimesOrder management TimeRight First time

Non Financial Performance Measures

Manufacturing Information Systems

Master ProductionScheduling

Standard Costing

Design Engineering

CapacityRequirements

Planning Shop Floor Control

Bill of

Materials

Materials Requirements

Planning

Labour Performance

Job Costing

ManufacturingInventoryControl

Manufacturing Information System

Manufacturing Information System

• Definition (same components as marketing)– A computer-based system that works in conjunction with other

functional information systems to support the firm's management in solving problems that relate to manufacturing the firm's products

DATABASE

Accountinginformation

system

Industrialengineering

system

Manufacturingintelligencesubsystem

Productionsubsystem

Inventorysubsystem

Qualitysubsystem

Costsubsystem

Internalsources

Environmentalsources

InputInputsubsystemssubsystems

OutputOutputsubsystemssubsystems

Users

Data Information

A Model of a Manufacturing SystemA Model of a Manufacturing System

Materialrequirements

planning

Executive information

system

Orderentry

Accounts payable

Accountsreceivable General

ledger

An MRP II SystemAn MRP II SystemOther functional information systems

Purchasing

ReceivingBilling

Customerorder file

Sales forecast

file

Finished-goods

inventory file

Produc-tion

capacityfile

Bill ofmaterial

file

PlannedPlannedorderorder

scheduleschedule

Rawmaterialsinventory

file

1.Productionscheduling

system

2. Materialrequirements

planning system

3. Capacityrequirements

planning

Purchasingsystem

Order releasereport

4.Order releasesystem

Order releasereport

Shop floorcontrolsystem

Performance reports

Planning reports

Exception reports

Changes to planned orders

An MRP SystemAn MRP System

Masterproduc-

tionschedule

Computers in the Physical System

• CAD (a.k.a. computer-aided engineering)– Design database

• CAM

• Robotics

ACCOUNTING APPLICATIONS SOFTWARE

Introduction

• The term accounting applications software refers to packages which computerise the firm’s ledger accounting system and related functions such as payroll.

• The emphasis is on transaction processing; hence, such software carries out a data processing function rather than an MIS or DSS function.

• The accounting applications software can often be used to provide summary reports which may be useful for managerial decision-making.

The structure of accounting applications software

• Accounting applications software is generally modular in design. This means that the software can be purchased and operated in individual sections or modules (for example, a small business might decide to computerise only its sales ledger) but that where several modules are used simultaneously data is efficiently shared and transferred between them.

• For example, when data is entered to the sales ledger, it is posted automatically by the system to the nominal ledger if that module also exists.

Order Processing and entry

Accounts Receivable

PurchaseOrder &

Receiving

Inventory Management

GeneralLedger

Fixed Assets and

Depreciation

AccountsPayable

Payroll

Word Processing

Accounting Information Systems

EnvironmentEnvironmentA Model of an Accounting Information A Model of an Accounting Information

SystemSystem

InformationInformation

DataData

ManagementManagement

DataDataprocessingprocessing

softwaresoftware

TransformTransform

AccountingAccountingInformationInformationSystemSystem

DatabasDatabasee

OutputOutputphysicalphysical

resourcesresources

InputInputphysicalphysical

resourcesresources

EnvironmentEnvironment

Characteristics of the AIS

• Performs necessary tasks

• Standard procedures

• Detailed data

• Historical focus

• Provides minimal problem-solving information

The AIS is the first information-oriented CBIS subsystem

to implement

• MIS Depends on a good AIS

• DSS Depends on a good AIS

• ES Depends on a good AIS

The Financial Information System

• A computer-based information system that works in conjunction with other functional information systems to support the firm’s management in solving problems that relate to financial operations and status

• It provides information to persons both inside and outside of the firm

Database

Accountinginformation

system

Internal audit

subsystem

Financialintelligencesubsystem

Forecastingsubsystem

Fundsmanagementsubsystem

Controlsubsystem

Internal sources

Environmentalsources

Inputsubsystems

Outputsubsystems

Users

Data Information

A Model of a Financial Information SystemA Model of a Financial Information System

More Prewritten Software Exists for the Financial Area than Any Other

• Most is accounting in nature

• Both general business and personal productivity software

1.1.

2.2.

3.3.

4.4.

Final organizationalFinal organizationalbudgetbudget

5.5.

The The Budgeting Budgeting ProcessProcess

Forecasting modelForecasting model

Sales forecastSales forecast

TopTopmanagementmanagement

Resource planningResource planningmodelmodel

Human resourceHuman resourcerequirementsrequirements

FinanceFinancerequirementsrequirements

ManufacturingManufacturingrequirementsrequirements

MarketingMarketingrequirementsrequirements

FinanceFinancemanagermanager

Human Human resourceresourcemanagermanager

InformationInformationservicesservicesmanagermanager

ManufacturingManufacturingmanagermanager

MarketingMarketingmanagermanager

RequestedRequestedfinancefinancebudgetbudget

RequestedRequestedhumanhumanresourcesresourcesbudgetbudget

Requested Requested informationinformationservices budgetservices budget

RequestedRequestedmanufacturingmanufacturingbudgetbudget

RequestedRequestedmarketingmarketingbudgetbudget

Approved sales Approved sales forecastforecast

TopTopmanagementmanagement

Information servicesInformation servicesrequirementsrequirements

BUDGET REPORTAS OF JANUARY 31 MIDWEST REGION

CURRENT MONTH YEAR-TO-DATE

ITEM BUDGET ACTUAL DOLLARS BUDGET ACTUAL DOLLARS

SALARIES $23,500 $22,000 $1,500- $59,000 $54,250 $4,750-TRAVEL 8,250 9,000 750+ 23,500 28,100 4,600+ ENTERTAINMENT 1,400 1,635 235+ 4,200 5,100 900+ TELEPHONE 200 85 115+ 600 225 375+RENT 535 535 0 1,605 1,605 0FURNITURE 0 0 0 420 505 85+SUPPLIES 625 410 215- 1,875 1,320 555- MISC. 400 620 220+ 1,200 1,963 765+

TOTAL $34,910 $34,285 625- $92,400 $93,070 670+

INFORMATION REPORTING SYSTEMS IN MARKETING

Sales ForceManagement

Logistics and

Distriubution

Market Research Budgeting

Sales Performance

Analysis

ProductAnalysis

Promotion

CustomerService

Analysis

Marketing Information Systems

Functional information systemsFunctional information systems

Marketinginformation

system

Manufacturinginformation

system

Financeinformation

system

Human resourceinformation

system

Marketingfunction

Manufacturingfunction

Financefunction

Humanresourcesfunction

Physical system of the firmPhysical system of the firm

Functional Information Systems Functional Information Systems RepresentRepresent

Functional Physical SystemsFunctional Physical SystemsInformation

resourceinformation

system

Information Servicesfunction

FirmEnviron-ment

Marketing intelligence

Marketing communications

Internalmarketinginformation

Kotler’s Information FlowsKotler’s Information Flows

Input subsystems

Output subsystems

DD

AA

TT

AA

BB

AA

SS

EE

Accounting information

system

Marketing research

subsystem

Marketing intelligence subsystem

Internal sources

Environmental sources

Product subsystem

Place subsystem

Promotion subsystem

Price subsystem

Integrated-mix

subsystem

Users

DataData InformationInformationMarketing Information System ModelMarketing Information System Model

SalesSalesVolumeVolume

STAGESSTAGES

Introduction Growth Maturity Decline

Should theproduct beintroduced

Should the product strategy be changed

Should theproduct be

deleted

The Product Life Cycle and Related The Product Life Cycle and Related DecisionsDecisions

1980 1990

Strategic planninglevel .17

Strategic planninglevel .30

Management control

level.70

Management control

level.54

Operational controllevel .13

Operational controllevel .16

Note: The percentages are based on the number of respondentsranking the particular management levels first.

Model Use Is Becoming More BalancedModel Use Is Becoming More Balanced

Overall Support from the Marketing Information System Is Becoming More Balanced

Strategic planninglevel.25

Management controllevel.57

Operational controllevel .17

Strategic planninglevel.28

Management controllevel.40

Operational Controllevel .31

Note: The percentages are based on the number of respondents ranking the particular management levels first.

1980 1990

Human Resource

Information Systems

The HR manager is often a director who is not a member of

the executive committee.

The importance of the human resourcefunction and the human

resources information system hasgrown over the last ten years

Recruiting Hiring Education& Training

Terminat-ion

BenefitAdministration

PotentialEmployees Employees Retired

Employees

Data Management

The Firm

Primary HR ActivitiesPrimary HR Activities

Accountinginformation

system

Human resourcesresearchsystem

Manufacturingintelligencesubsystem

Work forceplanning

subsystem

Work forcemanagementsubsystem

Benefitssubsystem

Internalsources

Environmentalsources

Inputsubsystems

Outputsubsystems

Users

Data Information

Environmentalreporting

subsystem

HRISDatabase

HRIS ModelHRIS Model

Recruitingsubsystem

CompensationSubsystem