Management Information System:

Meaning:

A management information system (MIS) is a system or process that

provides the information necessary to manage an organization
effectively. MIS and the information it generates are generally
considered essential components of prudent and reasonable business
decisions.
The importance of maintaining a consistent approach to the
development, use, and review of MIS systems within the institution
must be an ongoing concern of bank management. MIS should have a
clearly defined framework of guidelines, policies or practices,
standards, and procedures for the organization. These should be
followed throughout the institution in the development, maintenance,
and use of all MIS.
MIS is viewed and used at many levels by management. It should be
supportive of the institution's longer term strategic goals and
objectives. To the other extreme it is also those everyday financial
accounting systems that are used to ensure basic control is maintained
over financial recordkeeping activities.
Financial accounting systems and subsystems are just one type of
institutional MIS. Financial accounting systems are an important
functional element or part of the total MIS structure. However, they
are more narrowly focused on the internal balancing of an institution's
books to the general ledger and other financial accounting subsystems.

Nature & Scope of MIS:

1. Effective utilization of information technologies in

organizational context.

2. Information systems applications in organisations such as

transaction processing, routine data processing, decision
support, office support, computer-integrated manufacturing,
expert support, executive support and support for strategic
advantage plus the coordination and interaction of such
applications.

3. MIS systems can be used to transform data into information

useful for decision making. Computers can provide financial
 statements and performance reports to assist in the planning,
monitoring and implementation of strategy.

4. MIS systems provide a valuable function in that they can

collate into coherent reports unmanageable volumes of data
that would otherwise be broadly useless to decision makers.
By studying these reports decision-makers can identify
patterns and trends that would have remained unseen if the
raw data were consulted manually.

5. MIS systems can also use these raw data to run simulations –
hypothetical scenarios that answer a range of ‘what if’
questions regarding alterations in strategy. For instance, MIS
systems can provide predictions about the effect on sales that
an alteration in price would have on a product. These Decision
Support Systems (DSS) enable more informed decision
making within an enterprise than would be possible without
MIS systems.

6. Not only do MIS systems allow for the collation of vast

amounts of business data, but they also provide a valuable
time saving benefit to the workforce. Where in the past
business information had to be manually processed for filing
and analysis it can now be entered quickly and easily onto a
computer by a data processor, allowing for faster decision
making and quicker reflexes for the enterprise as a whole.

7. While MIS systems are extremely useful in generating

statistical reports and data analysis , they can also be of use
as a management By Objective(MBO) tool.

8. MBO is a process by which mangers and subordinates agree

upon a series of objectives for subordinates to attempt to
achieve within a set time frame. The aim of this objective is
to provide a set of key performance indicators by which an
enterprise can judge the performance of an employee or
project. The success of any MBO depends upon the
continuous tracking of progress.

In tracking this performance, it can be extremely useful to make use

of this MIS system.
Characteristic of Management Information System:

 An MIS has been called a method, a function, an approach, a

process, an organization, a system, and a subsystem.
 A Management Information System, or MIS, is a computer-based
system that optimizes the collection, transfer, and presentation
of information throughout an organization by using an integrated
structure of databases and information flow.
 An MIS supports transaction handling and record keeping.
 An MIS uses an integrated database and supports a variety of
functional areas.
 An MIS provides operational-, tactical-, and strategic-level
managers with east access to timely but, for the most,
structured information.
 An MIS is somewhat flexible and can be adapted to meet the
changing information needs of the organization.
 An MIS can boost system security by limiting access to
authorized personnel.
 Provides reports with fixed and standard formats.
 Hard-copy and soft-copy reports.
 Uses internal data stored in the computer system.
 End users can develop custom reports.
 Requires formal requests from users.

Effective MIS should :

 Ensure the appropriate presentation formats and time frames

required by operations and senior management are met.

 MIS can be maintained and developed by either manual or

automated systems or a combination of both.

 It should always be sufficient to meet an institution's unique

business goals and objectives.

 The effective deliveries of an institution's products and services are

supported by the MIS.

 These systems should be accessible and useable at all appropriate

levels of the organization.

 MIS is a critical component of the institution's overall risk

management strategy.
 MIS should be used to recognize, monitor, measure, limit, and
manage risks.

RELATION BETWEEN MIS AND MANAGEMENT:-

 The management process is executed through a variety of

decisions taken at each step of planning, organizing, staffing,
directing, coordinating and control. MIS aids decision making.
 If the management is able to spell out the decision required to
be taken, the MIS can be designed suitably. The decision
required to be taken are as follows,

 The Objective of the MIS is to provide Information for a decision

support in the process of management. It should help in such a
way that the business goals are achieved in the most efficient
manner.

 Since the decision making is not restricted to a particular level

the MIS is expected to support all the levels of the management
in conducting the business operations. Unless MIS becomes a
management aid, it is not useful to the organization.

With a good MIS support, the management of marketing, finance,

production and personnel becomes more efficient. The tracking and
monitoring of the functional targets becomes easy. The functional
managers are informed about the progress, achievements and
shortfalls in the activity and the targets. The mangers are kept alert by
providing certain information indicating the probable trends in the
various aspects of business.

MIS is management oriented:

 The designing of MIS takes care of the managers, who meet

the information requirement. The development of the system
starts after deciding the3 management needs and keeping in view
the overall objectives of the management.
 Five Ms- Men, Money, Materials, Machines, and methods are
the basic resources of management information recognized as an
important factor and its effective use contributes to the success of
the management.
 Since MIS requires heavy planning and investment,
management is deeply involved in the design implementation and
maintenance of the system.