MODULE MANAGEMENT INFORMATION SYSTEM – IM1

CHAPTER 1: BASIC INFORMATION CONCEPTS

Objectives:
a) Discuss the need for management information system.
b) Identify the advantages and disadvantages of MIS.
c) Differentiate Manual Information Systems and Computerized
Information Systems.

Lesson 1: Introduction to Information

Information can be defined as meaningfully interpreted data. If we give you a number 1-
212-290-4700, it does not make any sense on its own. It is just a raw data. However, if we say
Tel: +1-212-290-4700, it starts making sense. It becomes a telephone number. If I gather some
more data and record it meaningfully like −
Address: 350 Fifth Avenue, 34th floor
New York, NY 10118-3299 USA
Tel: +1-212-290-4700
Fax: +1-212-736-1300

It becomes a very useful information - the address of New York office of Human Rights Watch, a
non-profit, non-governmental human rights organization.
So, from a system analyst's point of view, information is a sequence of symbols that can be
construed to a useful message.
An Information System is a system that gathers data and disseminates information with the sole
purpose of providing information to its users.
The main object of an information system is to provide information to its users. Information
systems vary according to the type of users who use the system.
Information Definition
According to Wikipedia −
"Information can be recorded as signs, or transmitted as signals. Information is any kind of event
that affects the state of a dynamic system that can interpret the information.
Conceptually, information is the message (utterance or expression) being conveyed. Therefore,
in a general sense, information is "Knowledge communicated or received, concerning a particular
fact or circumstance". Information cannot be predicted and resolves uncertainty."

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

Information, Knowledge and Business Intelligence

Professor Ray R. Larson of the School of Information at the University of California, Berkeley,
provides an Information Hierarchy, which is −
• Data − The raw material of information.
• Information − Data organized and presented by someone.
• Knowledge − Information read, heard, or seen, and understood.
• Wisdom − Distilled and integrated knowledge and understanding.
Scott Andrews' explains Information Continuum as follows −
• Data − A Fact or a piece of information, or a series thereof.
• Information − Knowledge discerned from data.
• Business Intelligence − Information Management pertaining to an organization's policy or
decision-making, particularly when tied to strategic or operational objectives.
Information/Data Collection Techniques
The most popular data collection techniques include −
• Surveys − A questionnaires is prepared to collect the data from the field.

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

For more knowledge about information, please check the link provided:
https://www.youtube.com/watch?v=2AvIOzVJMCM

Lesson 2: Introduction to MIS

What is MIS?
Management Information System (MIS) is the use of information technology, people,
and business processes to record, store and process data to produce information that decision
makers can use to make day to day decisions. The full form of MIS is Management Information
Systems. The purpose of MIS is to extract data from varied sources and derive insights that drive
business growth.
The need for MIS
The following are some of the justifications for having an MIS system
• Decision makers need information to make effective decisions. Management
Information Systems (MIS) make this possible.
• MIS systems facilitate communication within and outside the organization – employees
within the organization are able to easily access the required information for the day to
day operations. Facilitates such as Short Message Service (SMS) & Email make it possible
to communicate with customers and suppliers from within the MIS system that an
organization is using.
• Record keeping – management information systems record all business transactions of
an organization and provide a reference point for the transactions.
Components of MIS
The major components of a typical MIS long-form (Management Information System) are:
• People – people who use the information system
• Data – the data that the information system records

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• Business Procedures – procedures put in place on how to record, store and analyze data
• Hardware – these include servers, workstations, networking equipment, printers, etc.
• Software – these are programs used to handle the data. These include programs such as
spreadsheet programs, database software, etc.
Types of Information Systems
The type of information system that a user uses depends on their level in an organization. The
following diagram shows the three major levels of users in an organization and the type of
information system that they use.

Transaction Processing Systems (TPS)

This type of information system is used to record the day to day transactions of a business. An
example of a Transaction Processing System is a Point of Sale (POS) system. A POS system is used
to record the daily sales.
Management Information Systems (MIS)
Management Information Systems abbreviated as MIS, are used to guide tactic managers to
make semi-structured decisions. The output from the transaction processing system is used as
input to the MIS system.
Decision Support Systems (DSS)
Decision support systems are used by top level managers to make semi-structured decisions. The
output from the Management Information System is used as input to the decision support
system. DSS systems also get data input from external sources such as current market forces,
competition, etc.

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For more knowledge about MIS, please check the link provided;
https://www.youtube.com/watch?v=qeDMvHld2U8

Lesson 3: Manual Information Systems VS Computerized Information Systems (MIS)

Data is the bloodstream of any business entity. Everyone in an organization needs
information to make decisions. An information system is an organized way of recording, storing
data, and retrieving information.
In this section, we will look at manual information systems vs. computerized information systems.
Manual Information System
A manual information system does not use any computerized devices. The recording, storing and
retrieving of data is done manually by the people, who are responsible for the information
system.
The following are the major components of a manual information system
• People –people are the recipients of information system
• Business Procedures –these are measures put in place that define the rules for processing
data, storing it, analyzing it and producing information
• Data –these are the recorded day to day transactions
• Filing system – this is an organized way of storing information
• Reports –the reports are generated after manually analyzing the data from the filing
system and compiling it.
The following diagram illustrates how a typical manual information system works

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Advantages and Dis-advantages of a manual information system

Advantages:
The following are the advantages of manual information systems
• Cost effective – it is cheaper compared to a computerized system because there is no
need to purchase expensive equipment such as servers, workstations, printers, etc.
• Flexible –evolving business requirements can easily be implemented into the business
procedures and implemented immediately
Disadvantages:
The following are some of the disadvantages of a manual information system.
• Time consuming –all data entries need to be verified before filing, this is a time consuming
task when done by humans. Retrieving data from the filing system also takes a
considerable amount of time
• Prone to error – the accuracy of the data when verified and validated by human beings is
more prone to errors compared to verification and validation done by computerized
systems.
• Lack of security – the security of manual systems is implemented by restricting access to
the file room. Experience shows unauthorized people can easily gain access to the filing
room
• Duplication of data –most departments in an organization need to have access to the
same data. In a manual system, it is common to duplicate this data to make it easy to
accessible to all authorized users. The challenge comes in when the same data needs to
be updated
• Data inconsistency – due to the duplication of data, it is very common to update data in
one file and not update the other files. This leads to data inconsistency
• Lack of backups – if the file get lost or mishandled, the chances of recovering the data are
almost zero.
Computerized information system
Computerized systems were developed to address the challenges of manual information
systems. The major difference between a manual and computerized information system is a
computerized system uses a combination of software and hardware to record, store, analyze and
retrieve information.

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Advantages and Disadvantages of a computerized information system (MIS)

The following are some of the disadvantages of a computerized information system.
Advantages:
The following are the advantages of computerized information systems
• Fast data processing and information retrieval – this is one of the biggest advantages of
a computerized information system. It processes data and retrieves information at a
faster rate. This leads to improved client/customer service
• Improved data accuracy – easy to implement data validation and verification checks in a
computerized system compared to a manual system.
• Improved security – in addition to restricting access to the database server, the
computerized information system can implement other security controls such as user’s
authentication, biometric authentication systems, access rights control, etc.
• Reduced data duplication – database systems are designed in such a way that minimized
duplication of data. This means updating data in one department automatically makes it
available to the other departments
• Improved backup systems – with modern day technology, backups can be stored in the
cloud which makes it easy to recover the data if something happened to the hardware
and software used to store the data
• Easy access to information – most business executives need to travel and still be able to
make a decision based on the information. The web and Mobile technologies make
accessing data from anywhere possible.
Disadvantages:
• It is expensive to set up and configure – the organization has to buy hardware and the
required software to run the information system. In addition to that, business procedures
will need to be revised, and the staff will need to be trained on how to use the
computerized information system.
• Heavy reliance on technology – if something happens to the hardware or software that
makes it stop functioning, then the information cannot be accessed until the required
hardware or software has been replaced.
• Risk of fraud – if proper controls and checks are not in place, an intruder can post
unauthorized transactions such as an invoice for goods that were never delivered, etc.

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Summary
• MIS stands for Management Information System. It is a collection of people, procedures,
data, and information technology that aids managers to make informed decisions.
• Computerized information systems are more efficient compared to manual information
systems. Manual information systems are cheaper compared to computerized
information systems.
• Transaction processing systems (TPS) are by operational staff to record day to day
business transactions, and they are used to make structured decisions
• Management Information Systems (MIS) are used by middle-level managers to make
semi-structured decisions
• Decision Support Systems are used by top level managers, and they help top level
managers to make unstructured decisions.

For more knowledge about advantages and disadvantage of MIS, please check the
link provided; https://www.youtube.com/watch?v=tGOxk0tOi9E

REFERENCES

https://www.tutorialspoint.com/management_information_system/basic_information_
concepts.htm
https://www.guru99.com/mis-definition.html

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