mis final study material for bba ii sem

8/10/2019 MIS Final Study Material for BBA II Sem.

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BACHELOR OF BUSINESS ADMINISTRATION

BBA-IInd SEM.

GDIB-JN-206

STUDY MATERIAL ON

MANAGEMENT INFORMATION SYSTEM &

ENTERPRISE RESOURCE MANAGEMENT

Ms. Poonam Malik


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Management Information System & ERP

CONTENTS:

Unit 1

Introduction: Definition, Purpose, Objectives and Role of MIS in Business Organization with

particular reference to Management Levels, Location of MIS in the Organization concept and

design.

Information Concepts: Data and Information meaning and importance, Relevance of

Information in Decision Making, Sources and Types of Information, Assessing Information needs

of the Organization.

Unit 2

System Development: Concept of System, Types of Systems Open, Closed, Deterministic,

Probabilistic, etc. Relevance of choice of System in MIS, Integration of Organization Systems and

Information Systems, System Development Life Cycle, System Analysis, Design and

Implementation, MIS Applications in Business.

Unit 3

Types of information systems: definition, basic features and components of Transaction

Processing System, Decision Support System, Executive Information System, Expert System

Unit 4

Introduction To ERP: Evolution of ERP, Reasons for the growth of ERP, Advantages and

limitations of ERP.

Basic Modules of ERP:- Personnel Management, Training and Development, Material Planning

and Control, Manufacturing, Production Planning, Production Control, Sales and Distribution

Unit 5

ERP and Related Technologies: Business Process Reengineering (BPR), Management

Information System (MIS), Executive Information System (EIS), Decision support System (DSS),

Supply Chain Management (SCM), OLAP (Online Analysis and Processing)


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UNIT 1

______________________________________________

Introduction to MIS & Information Concepts

Learning Objectives:After studying this unit, you will learn:

Definition, Purpose, Objectives of MIS

Role of MIS in Business Organization with particular reference to Management Levels

Location of MIS in the Organizationconcept and design.

Data and Informationmeaning and importanceRelevance of Information in Decision Making

Sources and Types of Information

Assessing Information needs of the Organization

__________________________________________________________________________________

1.1Introduction:

Management Information Systems (MIS), referred to as Information Management and Systems, is

the discipline covering the application of people, technologies, and procedures collectively calledinformation systems, to solving business problems.

'MIS' is a planned system of collecting, storing and disseminating data in the form of

in formation needed to carr y out the functions of management.

Academically, the term is commonly used to refer to the group of information management methods

tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert

Systems, and Executive Information Systems.

Management : Management is art of getting things done through and with the people informally

organized groups. The basic functions performed by a manager in an organization are: Planning,

controlling, staffing, organizing, and directing.Information : Information is considered as valuable component of an organization. Information is

data that is processed and is presented in a form which assists decision maker.

System : A system is defined as a set of elements which are joined together to achieve a common

objective. The elements are interrelated and interdependent. Thus every system is said to be

composed of subsystems. A system has one or multiple inputs, these inputs are processed through a

transformation process to convert these input( s) to output.

MIS DEFINITION:

The Management Information System (MIS) is a concept of the last decade or two. It has been

understood and described in a number ways. It is also known as the Information System, the


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Information and Decision System, the Computer- based information System.

The MIS has more than one definition, some of which are give below.

1. The MIS is defined as a system which provides information support for decision making in the

organization.

2. The MIS is defined as an integrated system of man and machine for providing the information to

support the operations, the management and the decision making function in the organization.3. The MIS is defined as a system based on the database of the organization evolved for the purpose

of providing information to the people in the organization.

4. The MIS is defined as a Computer based Information System.

Thought there are a number of definitions, all of them converge on one single point, i.e., the MIS is

a system to support the decision making function in the organization. The difference lies in defining

the elements of the MIS. However, in today.s world MIS a computerized .business processing

system generating information for the people in the organization to meet the information needs

decision making to achieve the corporate objective of the organization. In any organization, small or

big, a major portion of the time goes in data collection, processing, documenting it to the people.

Hence, a major portion of the overheads goes into this kind of unproductive work in the

organization. Every individual in an organization is continuously looking for some information

which is needed to perform his/her task. Hence, the information is people-oriented and it varies with

the nature of the people in the organization.

The difficulty in handling this multiple requirement of the people is due to a couple of reasons. The

information is a processed product to fulfill an imprecise need of the people. It takes time to search

the data and may require a difficult processing path. It has a time value and unless processed on

time and communicated, it has no value. The scope and the quantum of information is individualdependent and it is difficult to conceive the information as a well-defined product for the entire

organization. Since the people are instrumental in any business transaction, a human error is

possible in conducting the same. Since a human error is difficult to control, the difficulty arises in

ensuring a hundred per cent quality assurance of information in terms of completeness, accuracy,

validity, timeliness and meeting the decision making needs.

In order to get a better grip on the activity of information processing, it is necessary to have a

formal system which should take care of the following points:

Handling of a voluminous data.Confirmation of the validity of data and transaction.

Complex processing of data and multidimensional analysis.

Quick search and retrieval.

Mass storage.

Communication of the information system to the user on time.

Fulfilling the changing needs of the information.

The management information system uses computers and communication technology to deal with

these points of supreme importance.


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1.2 Objectives of MIS :

1. Data Capturing : MIS capture data from various internal and external sources of organization.

Data capturing may be manual or through computer terminals.

2. Processing of Data : The captured data is processed to convert into 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 computer terminal.

1.3 Characteristics of MIS :

1. Systems Approach : The information system follows a systems approach. Systems approach

means taking a comprehensive view or a complete look at the interlocking sub-systems that operate

within an organization.

2. Management Oriented : Management oriented characteristic of MIS implies that the

management actively directs the system development efforts. For planning of MIS, top-down

approach should be followed. Top down approach suggests that the system development starts from

the determination of managements needs and overall business objective. To ensure that the

implementation of systems polices meet the specification of the system, continued review and

participation of the manager is necessary.

3. Need Based : MIS design should be as per the information needs of managers at different levels.

4. Exception Based : MIS should be developed on the exception based also, which means that in

an abnormal situation, there should be immediate reporting about the exceptional situation to the

decisionmakers at the required level.

5. Future Oriented :MIS should not merely provide past of historical information; rather it should

provide information, on the basis of future projections on the actions to be initiated.

6. Integrated : Integration is significant because of its ability to produce more meaningful

information. Integration means taking a comprehensive view or looking at the complete picture of

the interlocking subsystems that operate within the company.

7. Common Data Flow : Common data flow includes avoiding duplication, combining similar

functions and simplifying operations wherever possible. The development of common data flow is

an economically sound and logical concept, but it must be viewed from a practical angle.

8. Long Term Planning : MIS is developed over relatively long periods. A heavy element of

planning should be involved.

9. Sub System Concept :The MIS should be viewed as a single entity, but it must be broken down

into digestible sub-systems which are more meaningful.

10.Central database : In the MIS there should be common data base for whole system


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1.4 ROLE OF THE MANAGEMENT INFORMATION SYSTEM:

The role of the MIS in an organization can be compared to the role of heart in the body. The

information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure

blood to all the elements of the body including the brain. The heart works faster and supplies more

blood when needed. It regulates and controls the incoming impure blood, processes it and sends itto the destination in the quantity needed. It fulfills the needs of blood supply to human body in

normal course and also in crisis. The MIS plays exactly the same role in the organization.

(1)The system ensures that an appropriate data is collected from the various sources, processed,

and sent further to all the needy destinations. The system is expected to fulfill the

information needs of an individual, a group of individuals, the management functionaries:

the managers and the top management.

(2)The MIS satisfies the diverse needs through a variety of systems such as Query Systems,

Analysis Systems, Modeling Systems and Decision Support Systems the MIS helps in

Strategic Planning, Management Control, Operational Control and Transaction Processing.(3)The MIS helps the clerical personnel in the transaction processing and answers their queries

on the data pertaining to the transaction, the status of a particular record and references on a

variety of documents. The MIS helps the junior management personnel by providing the

operational data for planning, scheduling and control, and helps them further in decision

making at the operations level to correct an out of control situation.

(4)The MIS helps the middle management in short them planning, target setting and controlling

the business functions. It is supported by the use of the management tools of planning and

control. The MIS helps the top management in goal setting, strategic planning and evolving

the business plans and their implementation.

(5)

The MIS plays the role of information generation, communication, problem identification

and helps in the process of decision making. The MIS, therefore, plays a vita role in the

management, administration and operations of an organization.

1.5 Organizational Need for MIS in a Company

To facilitate the management decision making at all levels of company, the MIS must be integrated.

MIS units are company wide. MIS is available for the Top management. The top management of

company should play an active role in designing, modifying and maintenance of the total

organization wide management information system. Information system and Information

technology have become a vital component of any successful business and are regarded as major

functional areas just like any other functional area of a business organization like marketing,

finance, production and HR. Thus it is important to understand the area of information system just

like any other functional area in the business. MIS is important because all businesses have a need

for information about the tasks which are to be performed. Information and technology is used as a

tool for solving problems and providing opportunities for increasing productivity and quality.

Information has always been important but it has never been so available, so current and so

overwhelming. Efforts have been made for collection and retrieval of information, However,

challenges still remain in the selection analysis and interpretation of the information that willfurther improve decision making and productivity.


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MIS for a Business Organization :

1. Support the Business Process :Treats inputs as a request from the customer and outputs as

services to customer. Supports current operations and use the system to influence further

way of working.

2. Support Operation of a Business Organization : MIS supports operations of a business

organization by giving timely information, maintenance and enhancement which providesflexibility in the operation of an organizations.

3. To Support Decision Making : MIS supports the decision making by employee in their

daily operations. MIS also supports managers in decision making to meet the goals and

objectives of the organization. Different mathematical models and IT tools are used for the

purpose evolving strategies to meet competitive needs.

4. Strategies for an Organization : Today each business is running in a competitive market.

MIS supports the organization to evolve appropriate strategies for the business to assented

in a competitive environment.

1.6 Prerequisites of an Effective MIS

Essential Requirement of an Effective MIS :

(i) Qualified System and Management Staff :The prerequisite of an effective MIS is that it

should be managed by qualified officers. These officers should have a mutual understanding about

the roles and responsibilities of each other. be understand clearly the view of their fellow officers.

For this, each organization should have two categories of officers :

(a) System and Computer Expertswho in addition to their expertise in their subject area , they

should also be capable of understanding management concepts to facilitate the understanding of

problems asked by concern. They should also be clear about the process of decision making and

information requirements for planning.

(b) Management expertswho should also understand quite-clearly the concepts and operations of

a computer. This basic knowledge of computer will be useful will place them in a comfortable

position, while working with systems, technicians in designing or other wise, of the information

system.

(ii) Futuristic Perspective : An effective MIS should be capable of meeting the future

requirements of its executives as well. This capability can be achieved by regular monitoring and

updating the MIS.

(iii) Support of Top Management : For a management information system to be effective, it must

receive the full support of top management. The Reasons for this are :

(a) Subordinate managers are usually lethargic about activities which do not receive the support of

their superiors.

(b)The resources involved in computer based information system are larger and are growing larger

and larger in view of importance gained by management information system.

(iv) Common Database :It is an integrated collection of data and information which is utilized by

several information subsystems of an organization. A common database may be defined as a super

file which consolidates and integrates data records formerly stored in a separate data file. Such a

database can be organized as an integrated collection of data records into a single super file or itcan be organized as an integrated collection of several data file.

(v) Control and maintenance of MIS :Control of the MIS means the operation of the system as it


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was designed to operate. Some times, users develop their own procedures or short cut methods to

use the system which reduces its effectiveness.

1.7 Various type of Information System

A business has several information systems :

(A) Formal Information System

(B) Informal Information System

(C) Computer Based Information System

(a) Formal Information System : It is based on organizational chart represented by the

organization.

(b) Informal Information System : It is an employee based system designed to meet personal and

vocational needs and to help in the solution of work-related problems. It also funnels information

upward through indirect channels. It works within the framework of the business and its stated

policies.(c) Computer Based Information System (CBIS) : This category of information system depends

mainly on the computer for handling business application. System analysis develops different types

of information system to meet variety of business needs. There is class of system known as

collectively as computer based information system. They are categorized in the following 6 classes:

i) Transaction Processing System (TPS)

ii) Management Information System (MIS)

iii)Decision Support System (DSS)

iv)Executive Support System (ESS)v)Office Automation Systems (OASs), and

vi)Business Expert Systems (BESs)

The organization has executive support systems (ESS) at the strategic level; management

information systems (MIS) and decision-support systems (DSS) at the management level;

knowledge work systems (KWS) and office systems at the knowledge level; and transaction

processing systems (TPS) at the operational level. Systems at each level in turn are specialized to

serve each of the major functional areas. Thus, the typical systems found in organizations are

designed to assist workers or managers at each level and in the functionsof sales and marketing,

manufacturing, finance, accounting, and human resources.

1. Transaction Processing System:

TPS processes transaction and produces reports. It represents the automation of the fundamental,

routine processing used to support business operations.It does not provide any information to the

user to his/her decision-making. TPS uses data and produces data .Previously, TPS was known as

Management Information System. Prior to computers, data processing was performed manually or

with simple machines. The domain of TPS is at the lowest level of the management hierarchy of an

organization.

2. Management Information System (MIS)

MIS is an information system, which processes data and converts it into information.A management


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information system uses TPS for its data inputs. The information generated by the information

system may be used for control of operations, strategic and long-range planning. Short-range

planning, management control, and other managerial problem solving. It encompasses processing in

support of a wide range of organizational functions & management processes. MIS is capable of

providing analysis, planning & decision making support. The functional areas of a business may be

marketing, production, human resource, finance and accounting.3. Decision Support System (DSS)

A decision support system (DSS) is an information system application that assists decision-making.

DSS tends to be used in planning, analyzing alternatives, and trial and error search for solution. The

elements of the decision support system include a database, model base & software. The main

application areas of DSS are Production, finance and marketing.

DSS can be differentiated from MIS on the basis of processing the information. MIS processes data

to convert it into information. DSS processes information to support the decision making process of

a manager.

4. Executive Support System (ESS)

Executive Support System (ESS) is an extension of the management information system, which is a

special kind of DSS; An ESS is specially tailored for the use of chief executive of an organization to

support his decision-making. It includes various types of decision-making but it is more specific

and person oriented.

5. Office Automation Systems (OAS)

Office automation refers to the application of computes and communication technology to office

functions.

Office automation systems are meant to improve the productivity of managers at

various levels of management of providing secretarial assistance and better communication

facilities.

Office activities may be grouped under two classes, namely

i)Activities performed by clerical personnel (clerks, secretaries, typist, etc.,) and

ii)Activities performed by the executives (managers, engineers or other professionals like

economist, researches etc.)

In the first category, the following is a list of activities.

a) Typing

b)Mailing

c)Scheduling of meetings and conferences,d) Calendar keeping, and

e)Retrieving documents

The following is a list of activities in the second category (managerial category)

a)Conferencing.

b)Production of information (messages, memos, reports, etc.) and controlling performance.

6. Business Expert Systems:These systems are one of the main types of knowledge-based

information systems. These systems are based on artificial intelligence, and are advanced

information systems. A business expert system is a knowledge based information system that usesits knowledge about a specific, complex application area to act as an expert. The main components

of an expert system are:


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a. Knowledge Base

b. Interface Engine

c. User Interface

1.8 Information Concepts

The word .information. is used commonly in our day to day working. In MIS, information has a

precise meaning and it is different from data. The information has a value in decision making while

data does not have. Information brings clarity and creates an intelligent human response in the

mind. In MIS a clear distinction is made between data and information. Data is like raw materials

while the information is equivalent to the finished goods produced after processing the raw

material. Information has certain characteristics. These are: Information

Improves representation of an entity

Updates the level of knowledge.

Has a surprise value.

Reduces uncertainty.

Aids in decision making.

The quality of information could be called good or bad depending on the mix of these

characteristics. Devis and Olson defines information as a data that has been processed into a form

that is meaningful to the recipient and is of real or perceived value in the current or the prospective

actions or decisions of the recipient. Data is defined as groups of non-random symbols in the form

of text, images or voice representing quantities, actions and objects. Whether an entity is a data or

information, it must be transferred through communication from the Source. to the Destination

without loss of content. The general model for such communication is given in Fig.

The above model of communication is used in the MIS. The MIS is equivalent to the transmitter

which provides information and sends through reports (channel) to the various receivers, which is

decoded or interpreted by the receiver at the destination. The poor quality of information due to

various factors would create confusion and misunderstanding, which is equivalent to a Noise and a

Destortion in the communication model. A good MIS communicates the information without a

noise and a distortion to the user.

1.9 Information Presentation

Presentation of the information is an art. The data may be collected in the best possible manner and

processed analytically, bringing lot of value in the information; however, if it is not presented

properly, it may fail to communicate anything of value to the receiver. The degree of

communication is affected by the methods of transmission, the manner of information handling and

the limitations and constraints of a receiver as the information processor and the organization as the

information user.

The methods used for improving communication are summarization and message routing. The

concept of summarization is used to provide information which is needed in the form and content.

The information can be summarized in a number of ways as shown in Table .


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The principle behind summarization is that too much information causes noises and distortions, i.e.,

confusion, misunderstanding and missing the purpose. The summarization suppresses the noise and

the distortions.

Another method of improving the degree of communication is through message routing. The

principle here is to distribute information to all those who are accountable for the subsequent

actions or decisions in any manner. That is if the information is generated with a certain purpose fora primary user, then such information may have secondary purposes to some other users in the

organization. This is achieved by sending the copies of the reports or documents to all the

concerned people or users. The principle of the message routing achieves the spread of information

to the appropriate quarters.

Knowledge is a power and an intelligent person in the organization can misuse this power to

achieve personal goals undermining the functional and organizational goals. This tendency should

be curbed. Further, the decision maker may call for the information on the grounds that, just in case

required, he should readily have it. Apart from the misuse of information, it has an impact on the

cost of information processing. In order to curb the misuse of information, a control is exercised on

the content of information and its distribution.

1.10 Bias in information

While choosing the appropriate method of communicating information a care has to be taken to see

that is not biased. For example, while using the techniques of classification or filtering the

information, it should not happen that certain information gets eliminated or does not get classified.

That is, a deliberate bias in covering certain information is to be avoided. This bias enters because

people try to block sensitive information which affects them. To overcome this problem, a formalstructure of organization should be adopted and the type of information and its receiver should be

decided by the top management.

Many a times the data and the information are suppressed but the inferences are informed, with no

or little possibility of verification or rethinking. In this case one who draws inferences may have a

bias in the process of collection, processing and presentation of data and information. Though the

deliberate enforcement of the inference on the receiver avoids a possibility of the multiple

inferences, but in this case processor.s bias is forced on the receiver. For example, organizations

have departments like Corporate Planning, Market Research, R and D, HRD and so on, which

collect the data and analyze it for the company and communicate the inferences. In all these cases

personal bias, organizational bias and management bias may be reflected in the entire process of

collection processing, and communication inference.

The presentation of the information will generate a bias and may influence the user. For example, if

the information is presented in an alphabetical order and if it is lengthy, the first few information

entities will get more attention. If the information is presented with a criteria of exception, the

choice of exception and deviation from the exception creates a bias by design itself. For a quick

grasp, the information is presented in a graphical form. The choice of scale, the graphic size and the

colour introduced a bias in the reader.s mind.

The base, which may creep in inadvertently because of the information system design, can betackled by making the design flexible, so far as reporting is concerned. Allow

the manager or the decision maker to choose his classification or filtering criteria, the scope of


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information, the method of analysis and the presentation of inference. However, somewhere balance

needs to be maintained between the flexibility of the design and the cost, and its benefits to the

managers. Disregarding the bias in information, it must have certain attributes to increase its utility

as shown in Table.

Redundancy is the repetition of the parts or messages in order to circumvent the distortions or the

transmission errors. The redundancy, therefore, sometimes is considered as an essential feature toensure that the information is received and digested. In MIS the redundancy of data and

information, therefore, is inevitable on a limited scale. Its use is to be made carefully so that the

reports are not crowded with information.

1.11 Characteristics of Information:

The parameters of a good quality are difficult to determine, however, the information can be termed

as of a good quality if it meets the norms of impartiality, validity, reliability, consistency and age.

The quality of information has another dimension of utility from the user.s point of view. The usersbeing many, this is difficult to control. Therefore, if one can develop information with due regards

to these parameters, one can easily control the outgoing quality of the information with the probable

exception of the satisfaction at the users end.

Following are the essential characteristic features :

(i) Timeliness :Timeliness means that information must reach the recipients within the prescribed

timeframes. For effective decision-making, information must reach the decision-maker at the right

time, i.e. recipients must get information when they need it. Delays destroys the value of

information. The characteristic of timeliness, to be effective, should also include up-to-date, i.e.

current information.

(ii) Accuracy : Information should be accurate. It means that information should be free from

mistakes, errors &, clear Accuracy also means that the information is free from bias. Wrong

information given to management would result in wrong decisions. As managers decisions are

based on the information supplied in MIS reports, all managers need accurate information.

(iii) Relevance : Information is said to be relevant if it answers especially for the recipient what,

why, where, when, who and why? In other words, the MIS should serve reports to managers which

is useful and the information helps them to make decisions..

(iv) Adequacy :Adequacy means information must be sufficient in quantity, i.e. MIS must provide

reports containing information which is required in the deciding processes of decision-making. The

report should not give inadequate or for that matter, more than adequate information, which maycreate a difficult situation for the decision-maker. Whereas inadequacy of information leads to

crises, information overload results in chaos.

(v) Completeness : The information which is given to a manager must be complete and should

meet all his needs. Incomplete information may result in wrong decisions and thus may prove

costly to the organization.

(vi) Explicitness :A report is said to be of good quality if it does not require further analysis by the

recipients for decision making.

(Vii) Impartiality: Impartial information contains no bias and has been collected without any

distorted view of the situation. The partiality creeps in, if the data is collected with a preconceivedview, a prejudice, and a pre-determined objective or a certain motive.

(viii)Validity: The validity of the information relates to the purpose of the information. In other


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words, it is the answer to the question-dose the information meet the purpose of decision making for

which it is being collected? The validity also depends on how the information is used. Since the

information and the purpose need not have one to one correspondence, the tendency to use it in a

particular situation may make the information invalid. For example, if the quality of the

manufactured product is deteriorating and it is decided to select the causes of poor quality, then one

must collect all the possible causes which may affect the quality. Quality is a function of the rawmaterial, the process of manufacture, the tools applied, the measures of the quality assessment, the

attitude of the people towards the control of quality. However, if the information collected talks

only about raw materials and the process of manufacture, then this information is not sufficient and

hence it is not valid for all the decisions which are required to control the quality.

(ix) Reliability: It is connected to the representation and the accuracy of what is being described.

For example, if the organization collects the information on the product acceptance in the selected

market segment, the size of the sample and the method of selection of the sample will decide the

reliability. If the sample is small, the information may not give the correct and a complete picture

and hence it is not reliable. The reliability is also affected from the right source.

(x)Consistency:The information is termed as inconsistent if it is derived form a data which dose not

have a consistent pattern of period. Somewhere, the information must relate to a consistent base or a

pattern. For example, you have collected the information on the quantity of production for the last

twelve months to fix the production norms. If in this twelve months period, the factory has worked

with variable shift production, the production statistics of the twelve months for comparison is

inconsistent due to per shift production. The consistency can be brought in by rationalizing the data

to per shift production per month. The regularity in providing the information also helps in

assessing the consistency in the information.

(xi)Age: If the information is old, it is not useful today. The currency of the information makes all

the difference to the users. If the information is old then it does not meet any characteristics of theinformation viz., the update of knowledge, the element of surprise and the reduction of uncertainty,

and the representation. Maintaining these parameters at a high degree always poses a number of

problems. These problems are in the management of the operations, the sources, the data processing

and the systems in the organization. A failure to maintain the parameters to a high degree affects the

value of the information to the decision maker.

1.12 Different types of Information

Classification of Information : The information can be classified in a number of ways provide tobetter understanding.

Jhon Dearden of Harvard University classifies information in the following manner :

(1) Action Verses No-Action Information : The information which induces action is called

action information. No stockreport calling a purchase action is an action information. The

information which communicates only the status is No-Action Information. The stock balance is

no-action information.

(2) Recurring Verses No-Recurring Information :The information generated at regular intervals

is recurring information.The monthly sales reports, the stock statement, the trial balance, etc are

recurring information. The financial analysis or the report on the market research study is

norecurring information.

(3) Internal and external information : The information generated through the internal sources of


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the organization is termed as Internal Information, while the information generated through the

govt. reports, the industry survey etc., termed as External Information, as the sources of the data

are outside the organization.

The information can also be classified, in terms of its application :

(i) Planning Information :Certain standard norms and specifications are used in planning of any

activity. Hence such information is called the Planning Information. e. g. Time standard, design

standard.

(ii) Control Information : Reporting the status of an activity through a feedback mechanism is

called the Controlling Information. When such information shows a deviation from the goal or the

objective, it will induce a decision or an action leading to control.

(iii) Knowledge Information : A collection of information through the library records and the

research studies to build up a knowledge base as an information is known as Knowledge

Information.

(iv)Organization Information : When the information is used by everybody in the organization, it

is called Organization Information. Employee and payroll Information is used by a number of

people in an organization.

(v) Functional/ Operational Information : When the information is used in the operation of a

business it is called Functional/Operational Information.

(vi) Database Information : When the information has multiple use and application, it is called as

database information. Material specification or supplier information is stored for multiple users.

1.13 Difference between Data Processing and Information Processing

Data Processing : Data Processing is a process that converts data into information or knowledge.

The processing is usually assumed to be automated and running on a computer. Because data are

most useful when well-presented and actually informative, data-processing systems are often

referred to as information systems to emphasize their practicality. Nevertheless, both terms are

roughly synonymous, performing similar conversions; data-processing systems typically manipulate

raw data into information, and likewise information systems typically take raw data as input to

produce information as output. Data processing is that a business has collected numerous data

concerning an aspect of its operations and that this multitude of data must be presented in

meaningful, easy-to-access presentations for the managers who must then use that information toincrease revenue or to decrease cost. That conversion and presentation of data as information is

typically performed by a data-processing application.

Information Processing : Information processing is the change or processing of information in any

manner detectable by an observer. Information processing may more specifically be defined in

terms by Claude E. Shannon as the conversion of latent information into manifest information.

Latent and manifest information is defined through the terms of equivocation, remaining

uncertainty, what value the sender has actually chosen, dissipation uncertainty of the sender what

the receiver has actually received and transformation saved effort of questioning - equivocation

minus dissipation. Practical Information Processing can be described as a cycle, where data which

may have no inherent meaning to the observer is converted into information, which does have


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meaning to the observer.

1.14 Methods of Data and Information Collection:

Several methods are available for the collection of data. The choice of method will have an impact

on the quality of information. Similarly the design of data collection method also decides the

quality of data and information. The methods of data collection and processing become a part of the

MIS. The various methods of data collection are explained in Table . An awareness of these

methods is essential to the manager. Further, he should also nunderstand the potential problems of

bias, currency, and the fact versus the opinion in the various types of methods. The observation, the

experiment, the survey and the subjective estimation are the methods chosen for data collection and

information about a specific problem, while the remaining methods are chosen to collect data on a

routine basis without any particular problem whatsoever.

Following are the methods of data collection :

i. Observationii. Experiment

iii. Survey

iv. Subjective Estimation

v. Transaction Processing

vi. Purchase from Outside

vii. Publication

viii. Government Agencies

Methods of Data and Information Collection :The specific methods analysts use for collecting data about requirements are called fact finding

techniques. These include the interview, questionnaire, record inspections (on site review) and

observation. Analysts usually employ more that one of these techniques to help ensure an accurate

and comprehensive investigation.

1 )Interview

Analysts use interviews to collect information from individuals or from groups. The respondents are

generally current users of the existing system or potential users of the proposed system. In some

instances, the respondents may be managers or employees who provide data for the proposed

system or who will be affected by it. Although some analysts prefer the interview to other fact

finding techniques, it is not always the best source of application data. Because of the time required

for interviewing, other methods must also be used to gather the information needed to conduct an

investigation.

It is important to remember that respondents and analysts converse during an interview the

respondents are not being interrogated. Interviews provide analysts with opportunities for gathering

information form respondents who have been chosen for their knowledge of the system under study.

This method is frequently the best source of qualitative information (opinions, policies, and

subjective descriptions of activities and problems). Other fact finding methods are likely to be more

useful for collecting quantitative data (numbers, frequencies, and quantities).

This method of fact finding can be especially helpful for gathering information from individualswho do not communicate effectively in writing or who may not have the time to complete

questionnaires. Interviews allow analysts to discover areas of misunderstanding, unrealistic


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expectations, and even indications of resistance to the proposed system.

Interviews can be either structured or unstructured:

Unstructured interviews,using a question and answer format, are appropriate when analysts

want to acquire general information about a system. This format encourages respondents to share

their feelings, ideas, and beliefs.

Structured interviews use standardized questions in either an open response or closedresponseformat. The former allows respondents to answer in their own words; the latter uses a set of

prescribed answers.

Each approach has advantages and disadvantages. The success of an interview depends on the skill

or the interviewer and on his or her preparation for the interview. Analysts also need to be sensitive

to the kinds of difficulties that some respondents create during interviews and know how to deal

with potential problems. They need to consider not only the information that is acquired during an

interview, but also its significance. It is important to have adequate verification of data through

other data collection methods.

2 ) Questionnaire

The use of questionnaires allows analysts to collect information about various aspects of a system

from a large number of persons. The use of standardized question formats can yield more reliable

data than other fact finding techniques, and the wide distribution ensures greater anonymity for

respondents, which can lead to more honest responses. However, this method does not allow

analysts to observe the expressions or reactions or respondents. In addition, response may be

limited, since completing questionnaires may not have high priority among the respondents.

Analysts often use open ended questionnaires to learn about feeling, opinions, and general

experiences or to explore a process or problem.

Closed questionnaires control the frame of reference by presenting respondents with specific

responses form which to choose. This format is appropriate for electing factual information.The high cost of developing and distributing questionnaires demands that analysts carefully

consider the objective of the questionnaire and determine what structure will be most useful to the

study and most easily understood by the respondents. Questionnaires should also be tested and, if

necessary, modified before being printed and distributed.

As with interviewees, recipients, of questionnaires would be selected for the information they can

provide. The analysts should ensure that the respondents, background and experiences qualify them

to answer the questions.

3 )Record Review

Many kinds of records and reports can provide analysts with valuable information about

organizations and operations. In record reviews, analysts examine information that has been

recorded about the system and user. Record inspection can be performed at the beginning of the

study, as an introduction, or later in the study, as a basis for comparing, actual operations with the

records indicate should be happening.

Records include written policy manuals, regulations and standard operating procedures used by

most organizations and a guide for managers and employees. They do not show what activities are

actually occurring, where the decision making power lies, or how tasks are performed. However,

they can help analysts understand the system by familiarizing them with what operations must be

supported and with formal relations within the organization.

4 ) Observation

Observation allows analysts to gain information they cannot obtain by any other fact finding

method. Through observation, analysts can obtain firsthand information about how activities are


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carried out. This method is most useful when analysts need to actually observe how documents are

handled, how processes are carried out, observers know what to look for and how to assess the

significance of what they observe.

1.15 level of business activity with reference to information required

While developing an information management strategy within an organization, it is useful to

consider informations need at on three levels :

(i) Corporate (Top Level )

(ii)Team, Division, Business Unit (Middle Level)

(iii)Individual (Low Level )

The needs of each of these three levels must be met if a coordinated and effective solution is to be

maintained in the long-term.

Failure to address any one of the levels will lead to areas of the business or individuals finding their

own solution, which may not fit well within the strategic goals of the organization.(i) Corporate (Top Level Information) : At the top level corporate information that is useful for

the whole organization. This 'global' information is generally well addressed by the corporate

intranet. Examples of corporate information include policies and procedures, HR information,

online forms, phone directory, etc. Interestingly, there may be a limited amount of truly global

information, and it may not deliver the greatest (measurable) business benefits.

(ii) Team, division, business unit (Middle level) : The middle level is perhaps the most important,

as it covers all the information shared within teams, divisions, business units, etc. This information

may be critical to the day-to-day activities of the group, but of little interest to the rest of the

organization. Examples include project documentation, business unit specific content, meeting

minutes, etc. This level is generally poorly-served within organizations, although collaboration

tools are increasingly being used to address team information needs. It is also being recognized that

it is this 'local' information that may be the most valuable, in terms of driving the day-to-day

activity of the organization.

(iii) Individual (Low Level) : At the lowest level the personal information need of staff exists

throughout the organization. Examples include correspondence, reports and spreadsheets. In most

organizations, staff must struggle with using email to meet their information management needs.

While staff generally recognizes the inadequacy of e-mail, they have few other approaches or

technologies at their disposal.

Managing the Levels : While managing the information at each of the three levels, consideraspects need consideration:

(a) An information management solution must be provided for staff at each of the three levels.

If corporate solutions aren't provided, then staff will find their own solutions. This is the source of

poor-quality intranet sub-sites, and other undesirable approaches.

(b) A clear policy must be developed, outlining when and how it will apply at all the three levels

and how information should be managed at each level.

(c) Processes must be put in place to 'bubble up' or 'promote' information from lower levels to

higher levels. For example, some team-generated information will be critical for the whole

organization.

(d) As much as possible, a seamless information management environment should be delivered that

covers all the three levels.


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1.16 Categories of InformationStrategic Information- relates to ling range planning policies that are direct interest to upper

management and for long range goals. For example- population growth, trends in financial

investment, human resources.

This information is achieved with the aid of DSS.Managerial Information- It is of direct use to middle management and department heads for

implementation and control. For example- sales analysis, cash flow projections, and annual

financial statements.

This information is of use in short and intermediate range planning- i.e. months rather than years.

It is maintained with the help of MIS.

Operational Information-It is short term, daily information used to operate departments and to

enforce the day to day rules and regulations of the business. For example- daily employee absence

sheets, overdue purchase orders, current stock.

This information is achieved with the aid of TPS.It is established by data processing systems. Informal Information Systems

It is an employee based system designed to meet personnel and vocational needs and to help solve,

work related problems.

It relies on computer for handling business applications.

1.17 TYPES OF INFORMATION SYSTEMS

An information systemis a collection of hardware, software, data, people and procedures that are

designed to generate information that supports the day-to-day, short-range, and long-range activities

of users in an organization. Information systems generally are classified into five categories: office

information systems, transaction processing systems, management information systems, decision

support systems, and expert systems. The following sections present each of these information

systems.

1. Office Information Systems

An office information system, or OIS (pronounced oh-eye-ess), is an information system that

uses hardware, software and networks to enhance work flow and facilitate communications among

employees. Win an office information system, also described as office automation; employees

perform tasks electronically using computers and other electronic devices, instead of manually.

With an office information system, for example, a registration department might post the class

schedule on the Internet and e-mail students when the schedule is updated. In a manual system, the

registration department would photocopy the schedule and mail it to each students house.

An office information system supports a range of business office activities such as creating and

distributing graphics and/or documents, sending messages, scheduling, and accounting. All levels

of users from executive management to nonmanagement employees utilize and benefit from the

features of an OIS.

The software an office information system uses to support these activities include word processing,

spreadsheets, databases, presentation graphics, e-mail, Web browsers, Web page authoring,


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personal information management, and groupware. Office information systems use

communications technology such as voice mail, facsimile (fax), videoconferencing, and electronic

data interchange (EDI) for the electronic exchange of text, graphics, audio, and video. An office

information system also uses a variety of hardware, including computers equipped with modems,

video cameras, speakers, and microphones; scanners; and fax machines.

2. Transaction Processing Systems

A transaction processing system (TPS) is an information system that captures and processes data

generated during an organizations day-to-day transactions. A transaction is a business activity

such as a deposit, payment, order or reservation.

Clerical staff typically perform the activities associated with transaction processing, which include

the following:

1. Recording a business activity such as a students registration, a customers order, an

employees timecard or a clients payment.

2. Confirming an action or triggering a response, such as printing a students schedule, sending a

thank-you note to a customer, generating an employees paycheck or issuing a receipt to a client.

3. Maintaining data, which involves adding new data, changing existing data, or removing

unwanted data.

Transaction processing systems were among the first computerized systems developed to process

business data a function originally called data processing. Usually, the TPS computerized an

existing manual system to allow for faster processing, reduced clerical costs and improved customer

service.

The first transaction processing systems usually used batch processing. With batch processing,

transaction data is collected over a period of time and all transactions are processed later, as a

group. As computers became more powerful, system developers built online transaction processing

systems. With online transaction processing (OLTP)the computer processes transactions as they

are entered. When you register for classes, your school probably uses OLTP. The registration

administrative assistant enters your desired schedule and the computer immediately prints your

statement of classes. The invoices, however, often are printed using batch processing, meaning all

student invoices are printed and mailed at a later date.

Today, most transaction processing systems use online transaction processing. Some routine

processing tasks such as calculating paychecks or printing invoices, however, are performed more

effectively on a batch basis. For these activities, many organizations still use batch processing

techniques.

3. Management Information Systems

While computers were ideal for routine transaction processing, managers soon realized that the

computers capability of performing rapid calculations and data comparisons could produce

meaningful information for management. Management information systems thus evolved out oftransaction processing systems. A management information system, or MIS (pronounced em-

eye-ess), is an information system that generates accurate, timely and organized information so


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managers and other users can make decisions, solve problems, supervise activities, and track

progress. Because it generates reports on a regular basis, a management information system

sometimes is called a management reporting system (MRS).

Management information systems often are integrated with transaction processing systems. To

process a sales order, for example, the transaction processing system records the sale, updates the

customers account balance, and makes a deduction from inventory. Using this information, the

related management information system can produce reports that recap daily sales activities; list

customers with past due account balances; graph slow or fast selling products; and highlight

inventory items that need reordering. A management information system focuses on generating

information that management and other users need to perform their jobs.

An MIS generates three basic types of information: detailed, summary and exception. Detailed

information typically confirms transaction processing activities. A Detailed Order Report is an

example of a detail report. Summary information consolidates data into a format that an

individual can review quickly and easily. To help synopsize information, a summary report

typically contains totals, tables, or graphs. An Inventory Summary Report is an example of a

summary report.

Exception information filters data to report information that is outside of a normal condition.

These conditions, called the exception criteria, define the range of what is considered normal

activity or status. An example of an exception report is an Inventory Exception Report is an

Inventory Exception Report that notifies the purchasing department of items it needs to reorder.

Exception reports help managers save time because they do not have to search through a detailed

report for exceptions. Instead, an exception report brings exceptions to the managers attention in

an easily identifiable form. Exception reports thus help them focus on situations that requireimmediate decisions or actions.

4. Decision Support Systems

Transaction processing and management information systems provide information on a regular

basis. Frequently, however, users need information not provided in these reports to help them make

decisions. A sales manager, for example, might need to determine how high to set yearly sales

quotas based on increased sales and lowered product costs. Decision support systems help provide

information to support such decisions.

A decision support system (DSS)is an information system designed to help users reach a decision

when a decision-making situation arises. A variety of DSSs exist to help with a range of decisions.

A decision support system uses data from internal and/or external sources.

Internal sourcesof data might include sales, manufacturing, inventory, or financial data from an

organizations database. Data fromexternal sourcescould include interest rates, population trends,

and costs of new housing construction or raw material pricing. Users of a DSS, often managers,

can manipulate the data used in the DSS to help with decisions.

Some decision support systems include query language, statistical analysis capabilities,spreadsheets, and graphics that help you extract data and evaluate the results. Some decision

support systems also include capabilities that allow you to create a model of the factors affecting a


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decision. A simple model for determining the best product price, for example, would include

factors for the expected sales volume at each price level. With the model, you can ask what-if

questions by changing one or more of the factors and viewing the projected results. Many people

use application software packages to perform DSS functions. Using spreadsheet software, for

example, you can complete simple modeling tasks or what-if scenarios.

A special type of DSS, called an executive information system (EIS), is designed to support the

information needs of executive management. Information in an EIS is presented in charts and

tables that show trends, ratios, and other managerial statistics. Because executives usually focus on

strategic issues, EISs rely on external data sources such as the Dow Jones News/Retrieval service or

the Internet. These external data sources can provide current information on interest rates,

commodity prices, and other leading economic indicators.

To store all the necessary decision-making data, DSSs or EISs often use extremely large databases,

called data warehouses. A data warehouse stores and manages the data required to analyze

historical and current business circumstances.

5. Expert Systems

An expert system is an information system that captures and stores the knowledge of human

experts and then imitates human reasoning and decision-making processes for those who have less

expertise. Expert systems are composed of two main components: a knowledge base and inference

rules. A knowledge base is the combined subject knowledge and experiences of the human

experts. The inference rules are a set of logical judgments applied to the knowledge base each

time a user describes a situation to the expert system.

Although expert systems can help decision-making at any level in an organization,nonmanagement employees are the primary users who utilize them to help with job-related

decisions. Expert systems also successfully have resolved such diverse problems as diagnosing

illnesses, searching for oil and making soup.

Expert systems are one part of an exciting branch of computer science called artificial intelligence.

Artificial intelligence (AI) is the application of human intelligence to computers. AI technology

can sense your actions and, based on logical assumptions and prior experience, will take the

appropriate action to complete the task. AI has a variety of capabilities, including speech

recognition, logical reasoning, and creative responses.

Experts predict that AI eventually will be incorporated into most computer systems and many

individual software applications. Many word processing programs already include speech

recognition.

Integrated Information Systems

With todays sophisticated hardware, software and communications technologies, it often is

difficult to classify a system as belonging uniquely to one of the five information system types

discussed. Much of todays application software supports transaction processing and generates

management information. Other applications provide transaction processing, managementinformation, and decision support. Although expert systems still operate primarily as separate


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systems, organizations increasingly are consolidating their information needs into a single,

integrated information system.

, there are a variety of requirements for information. Senior managers need information to help

with their business planning. Middle management need more detailed information to help them

monitor and control business activities. Employees with operational roles need information to help

them carry out their duties.

As a result, businesses tend to have several "information systems" operating at the same time. This

revision note highlights the main categories of information system and provides some examples to

help you distinguish between them.

1.18 Nolan's Six-stage Model for Growth of MIS

One of the stages of growth model, helping in the understanding of the role of information systems,

in an organization's strategy and its maturity. Earlier, in a similar model called the four-stagegrowth model the maturity of an organization was captured in terms of use of information systems.

The stages are,

1. Initiation-in which the primary focus is cost reduction and only specialized applications are

run with a specialized staff. Management in not very keen on monitoring the information system.

2. Expansion-in which application increase rapidly. Specialization of staff and applications is

the order of the day. Management begins to take note of the new way of doing things.

3. Formalization-in which emphasis is laid on control and specialization, is built around

control. Management controls information systems.

4.

Maturity-in which database oriented applications proliferate. Information is used as aresource.

Nolan's Stages of Growth Model

I II III IV V VI

INITIATIONS

Users are

"hands off" in

approach

Extensive

IT/IS planning

Cost

reduction

primary focus

Functional

application is in

focus

MIS dept/IS

CONTAGION

Proliferation

of applications

Little

management

control

Huge

allocation of

financial

resources

Rapid growth

of fundamentaluse of IT

CONTROL

IT/IS is

considered as

an important

function

Centralized

controls are

applied for

IT/IS

No

reduction in

IT/IS use

INTEGRATION

Greater use of

database

Greater IT/IS

budget

IT/IS dept now

works on a

professional

utility model

Formal

planning and

control withinIT/IS dept

DATA

ADMIN

Data in

administration

Applications

are in sync

with the

organization

Shift from

IT/IS booking

after DP to

holistic

information

management

MATURITY

IT/IS dept

becomes

partners of

users in data

management

Applications

reflect real

information

needs

Strategic

planning of

IT/IS


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dept is not

under strict

management

control

IS/IT

performance

below

importation

and several

crisis occur

Applications

are often

incompatible

Unhappy

users

Use of

database but

with

unsatisfactory

outcome

Steering

committees are

widely used for

application

development.

becomes

important

Managers

of IT/IS dept

considered at

par with

other dept

Nolan (1979) indicated that there are six stages in the information system evolutionary process. It is

an improvement over the four-stage model. The stages are:

1. Initiation- in which the organization has an operational focus and tries to get operational

efficiency and thereby limited value from the information systems.

2. Contagion-in which the organization moves towards online systems after having tasted

success in the initiation stage. More users are added.

3. Control-in which the management exercises control and makes a cost-benefit type of

assessment.

4. Integration-in which the organization moves away from an ad hoc isolated solutions based

on information system to a service based information system. This is the stage when the

organization transitions from a data processing outlook about information systems to more

holistic information-based decision-making approach towards information systems. A more

comprehensive approach towards information systems results in changes in the

organization's behavior towards information systems and initiates a new appreciation for

data and information.

5. Data administration-in which the organization begins to appreciate the value of

information and makes efforts to centralize the data management to take advantage of the

benefits of information based decision-making.

6. Maturity-in which the organization creates synergies in its corporate objectives and

information systems planning so that the two can work in a synchronized manner.

These are the stages as Nolan has described in this research. However, no empirical proof exists of

this stage growth model of information system maturity.


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1.19 ROLE OF MIS IN IMPROVING DECISION MAKING:

Decision making is an essential part of any business. This is because a majority of operations in an

organization turn around decisions made by the management. In order to make decisions more

effectively, it is very important to have a good management information system since decisions are

based on information available. The effectiveness of every business information is dependent on

the timing and content of the business information presented and management actions. The need formanagement information system is felt when the managers have to make proper business decisions,

the manger will have to rely on his judgment but he must have information on the basis which he

arrives at business decisions. If an organization have a significant management information system,

it is easy for an organization to take decision on the basis of available information. Good MIS

ensures good decision making just in the same way bad MIS drive the making of bad decisions.MISplays a crucial role in decision making through its systematic tools, timely information and

adequate managerial policies and regulations. The quality of managerial decision-making dependsupon the qualitative information and the managers should therefore develop an environment that

encourages the growth and quality information. Management information systems give managers

fast component to information. It includes interaction with other decision support systems,

information examination, cross referencing of external information and possible data removal

techniques. These systems provide information and strategic technique with practical decisions.

Finally, Management Information systems play the crucial role of providing a wide range of

alternatives from which decision makers are able to make their preferred decision. This is important

for companies in the modern day generation where any minor fall in decision making can lead to

very infinite losses.

1.20 IMPACT OF THE MANAGEMENT INFORMATION SYSTEM

Since the 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 support, the management ofmarking, finance, production and personnel become 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 probable trends in the various aspects of business. This helps in

forecasting and long- term perspective planning. The manager.s attention is brought to a situation

which is exceptional in nature, inducing him to take an action or a decision in the matter. A

disciplined information reporting system creates a structured data 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 or by blending analysis, saving the manager.s valuable time.

The MIS creates another impact in the organization which relates to the understanding of thebusiness itself. The MIS begins with the definition of a data entity and its attributes. It uses adictionary if data, entity and attributes, respectively, designed for information generation in the

organization. Since all the information system use the dictionary, there is common understanding of

terms and terminology in the organization brining clarity in the communication and a similar

understanding an even of the organization.

The MIS calls for a systemization of the business operation for an affective system design. A well

designed system with a focus on the manger makes an impact on the managerial efficiency. The

fund of information motivates an enlightened manger to use a variety of tools of the management. It

helps him to resort to such exercises as experimentation and modeling. The use of computersenables him to use the tools techniques which are impossible to use manually. The ready-made

packages make this task simpler. The impact is on the managerial ability to perform. It improves thedecision making ability considerably. Since the MIS works on the basic systems such as transaction

processing and databases, the drudgery of the clerical work is transferred to the computerized


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system, relieving the human mind for better work. It will be observed that a lot of manpower is

engaged in this activity in the organization. It you study the individual.s time utilization and its

application; you will find that seventy per cent of the time is spent in recording, searching,

processing and communication. This is a large overhead in the organization. The MIS has a direct

impact on this overhead. It creates a information- based work culture in the organization.

1.21 MIS : ORGANISATION

Management information systems (MIS) should be designed, viewing the organization as discussed

earlier. MIS design should give due weight age to the human side of the organization and its

culture. The task and technology are the physical aspects of the organization which can be

ascertained very easily. But culture and people are very difficult to assess from the design point of

view. The structure of the five sub-systems should be considered while designing the MIS. MISdesign should give reports in line with the organization structure. This means that the main decision

makers and the power centers must be recognized in the MIS. Let us discuss these aspects of theorganization structure and their implications.

In a tall hierarchy with a high degree of centralization, the MIS should give control information tothe higher management where decision making in concentrated. If the system is structured on thefunctional basis where the functional head is a key decision maker and all the functions have

equally important role to play, then the MIS will have a functional design with the information

support to the functional head. Further, in such a set-up, an integrated MIS would be necessary,

reporting the corporate status of the business to the top management.

If the organization works on a standardized system where rules, policies, systems and procedures

have been laid down, then these become part of the MIS. The processing routines in the MIS

incorporate these features as an integral part. This is safe as it has already been approved by the

management of the organization. Along with the information, if the decision making responsibilities

are also clearly defied and allocated, then the MIS can produce information reports by processing

the data and summarizing the results in line with the decision maker.s position in the structure.If the basic model of the organization is modified as a product or a project organizationnsystem,

then the MIS should focus on the management of planning and control of the multiple functions.Besides these functions, he has to know the trouble spots and shows the interconnection with the

other functions. It must summaries all information relating to the span of control of product or

project manger. The MIS should be able to cater to the view of the product or the project manager

and also of the top management.

In the organization culture provides sufficient incentive for efficiency and results, the MIS should

support this culture by providing such information which will aid the promotion of efficiency. If the

culture encourages delegation of power and authority, then the MIS should incorporate the decision

making rules in the system. The organization system is an open system and MIS should be so

designed that it highlights the critical business, operational, technological and environmentalchanges to the concerned level in the organization, so that the action can be taken to correct the

situation. The principle of the feed forward control should be extensively used as a design feature to

provide a prior warning to the decision maker. Since the organization system has a dynamic role to

play to meet the changing needs of a business, the MIS becomes a common support system for

playing the dynamic role.

When an organization is moving through the business phases of introduction, growth, maturity and

decline, MIS should provide an information support, relevant to that phase of the business cycle.

This means the designer of MIS should foresee such requirements and make the design flexible

enough to support such requirements.The organizational learning helps to tone up the behavior of the organization. The MIS should

support the learning mechanism by identifying the cause and effect in a given situation. It shouldkeep the records of action and provide help to analyze the best action in a given situation. It should

be help to build various decision models for use by the managers. The information support should


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be such that the group of enterprising manager should be able to improve their capabilities to

perform batter.

The design of the MIS, in isolation from organizational factors, is destined to fall as it just does not

fit into the structure. Since organization systems in the same business differ for various reasons

such as the leadership style, the management style, culture and group of people as a body and so on,

it is difficult to evolve a standard model of the MIS for a business and/or an industry.

MIS plays a very important role in creating organization behavior which in turn sets the goals forachievement. Technology and people decide the organization structure and style of themanagement.

1.22 MIS AND THE INFORMATION CONCEPT

The goal of the MIS should be to provide the information which has a surprise value and whichreduces the uncertainty. It should simultaneously build the knowledge base in the organization by

processing the data obtained from different sources in different ways.

The designer of the MIS should take care of the data problems knowing that it may contain bias anderror by introduction of high level validations, checking and controlling the procedures in the

manual and computerized systems. While designing the MIS, due regard should be given to thecommunication theory of transmitting the information from the source to the destination.

A special care should be taken to handle a noise and a distortion on the way to destination. The

presentation of information plays a significant role in controlling the noise and distortion which

might interrupt, while communicating information to the various destinations. The principles of

summarization and classification should be carefully applied giving regard to the levels of

management. Care should be taken in the process that no information is suppressed or

overemphasized.

The utility of information increases if the MIS ensures that the information possesses the necessaryattributes. The redundancy of the data and the information is inevitable ob a limited scale. MIS

should use the redundancy as a measure to control the error in communication.

The information is a quality product for the organization. The quality of information as an outgoingproduct can be measured on four dimensions, viz., the utility, the satisfaction, the error and the bias.

The MIS should provide specific attention to these quality parameters. A failure to do so would

result in a wasteful expenditure in the development of the MIS and poor usage of investment in the

hardware and software.

The quality can be ensured if the inputs to the MIS are controlled on the factors of impartiality,

validity, reliability, consistency and age. MIS should make a distinction between the different kinds

of information for the purpose of communication. An action, a decision-oriented information shouldbe distinguished from a no-action/knowledge-oriented information. The information could be of

recurring type or an ad hoc type. The MIS also needs to give regard to the information used forplanning, performance control, and knowledge database. A distinction between these factors will

help make the decisions of communications, storage and also the frequency of reporting.Since the decision maker is a human, it requires recognizing some aspects of human capabilities in

the MIS design. These human capabilities differ from manager to manager and the designer has to

skillfully deal with them. The differences in the capabilities arise on account of the perception in

assessing the locus of the management control, the faith and the confidence in the information

versus knowledge, the risk propensity, the tolerance for ambiguity, the manipulative intelligence,

the experience in decision making and the management style.

The MIS design should be such that it meets the needs of the total organization. For design

considerations and for the operational convenience, the organization is divided into four levels, viz.,the top, the middle, the supervisory and the operational. The top management uses the MIS for

goal-setting and strategic planning, deals with key information of a higher degree of accuracy where

the perceived value of the information is very high. As against this, the lowest level management

and the operational management uses the MIS to know the status by calling information of the


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current period in detail where the perceived value of information is the lowest and it usually insists

on getting the information in a fixed format.

The MIS design, therefore, should ensure the input data quality by controlling the data for the

factors, viz. impartiality, validity, reliability, consistency and age. The data processing and the

decision making routines should be developed in such a manner that the data is processed after

thorough validation and checking, and the analysis thereof is further reported to the various levels

and individuals with due regard to the differences in the individual management style and humancapabilities.Recognizing that the information may be misused if it falls into wrong hands, the MIS design

should have the features of filtering, blocking, suppressions and delayed delivery. Since, the MISsatisfies the information needs of the people in a particular organization, the design of the MIS

cannot be common or universal for all the organizations. The principles of design and the use of the

information concepts in design does not change but when it comes to the applications, the design

has to give a regard to the organization structure, the culture, the attitudes and the beliefs of the

people and the strengths and the weaknesses of the organization.

1.23 Step by step installations of MIS in an organizationAfter informally analyzing your data needs and procedures, if a manager feels uncomfortable about

his or her ability to establish an MIS for the organization, he or she should engage the services of an

MIS consultant to assist in creating the system. Together, the manager and the consultant will

follow a series of steps to get an overview of the existing MIS, the way it currently functions, and

what is needed to improve it. The consultant will assist in assessing, and responding to,

organizational needs. The consultant may also help a manager decide whether computerization, or a

good manual MIS, is preferable. Whether or not a consultant is engaged, managers should review

some of the problems that may make an MIS less effectiv

mis final study material for bba ii sem

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