Mis Unit 1

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MANAGEMENT INFORMATION SYSTEM

The objective of the course is to provide the basic concepts of systems concepts and Management of Information
System and utility of the systems for the managerial decisions.
1. MIS An overview - Introduction, Need for MIS and IT nature and scope of MIS, MIS characteristics,
Structure of MIS, role of MIS in global business. Challenges of Managing MIS.
2. Data resource management - Data base concepts, The traditional approaches, the modern approaches (Data
base management approaches) DBMS, Data models, Data ware housing and mining.
3. Business application of IS - Enterprise systems, ERP, CRM, SCM, DSS, Types of decisions, Decision
support techniques, Decision making and Role of MIS, Business intelligence and Knowledge management
systems.
4. Management of IS - Project planning, SDLC, System development models, Project management, system
analysis, system design, Implementation process, Product based MIS evaluation, Cost /Benefit based evaluation,
Process based calculation, System maintenance.
5. Security, Ethical & Social Issues : IS security threats, Protecting IS, IS Security Technologies, The disaster
recovery plan, IS Ethical Issues, social issues.
Textbook:
1. MIS –Managerial Perspective, D.P.Goyal,Vikas Publications.
2. References:
3. Management Information Systems, C Laudon and Jane P.Laudon, et al, Pearson Education.
4. MIS, Hossein Bidgoli, Nilanjan Chattopadhyay, Cengage Learning
5. Management Information Systems Text & Cases, W S Jawadekar, Tata McGraw-Hill.
6. Introduction to Information Systems, Rainer, Turban, Potter, WILEY-India.
7. Management Information Systems, James A. Obrein, Tata McGraw-Hill .
8. Management Information Systems, Dharminder and Sangeetha, 1/e, Excel books.
9. Cases in MIS, Mahapartra, PHI.

10. Management Information Systems, Gordon B. Davis & Margrethe H.Olson, Tata McGraw-Hill
UNIT-1
MIS AN OVERVIEW

NEED FOR MANAGEMENT INFORMATION SYSTEM (MIS):

MIS has more importance in today’s global business environment because of the three main challenges.

1. Because of liberalization and globalization, in which organizations are required to compete not locally but
globally, a manager has to take quick decisions, otherwise his business will be taken away by his competitors.

2. In this information age, where information is doubling up every 18 months, a manager has to process
voluminous data, failing which he may end up taking a wrong decision that may prove costly for the company.

3. Now-a-days Information Technology (IT) is longer a luxury, rather it has become a necessity.
(It can be used in achieving business strategic advantages)

ROLE OF INFORMATION SYSTEM :

1. It Support the business process and operations of an organization.


2. It Support decision-making by employees and managers of an organization.
3.It Support the strategies of an organization for gaining competitive advantage. MIS is need for every
organization, irrespective of their,

1. Functional area (finance, HR, marketing , operations ,IT)

2. Responsibility in an organization (top, middle, low level management)

3. Size of an organization (small, medium or large)

4. Type of organization (private, GOVT,public)

CAPABILITIES:

MIS are based on th systems approach and use of ICT.The Various capabilities of MIS include the following:

1. Capturing data from different sources (accurately and quickly)


2. It processes voluminous data quickly and performing high-speed,high-volume numerical computations.
3. Providing accurate information,fast,communication and collaboration within and among organizations.
4. Storing huge amount of information in small ,easy to access space.
5. Enabling Fast and inexpensive access to large amount of information worldwide.
6. Increasing the efficiency and effectiveness of managers working in groups in an organization.
7. Allowing an organization to become more flexible and responsive.
8.Automating business process of an organisation.
9.Analysis and interpretation of vast amounts of data quickly and effieciently.

BENEFITS OF MIS:

MIS provides a large number of benefits to ana organization,which includes,

1. Reduced man power


2. Reduced cycle time
3. Reduced carrying cost of inventory
4. Reduced data transfer time
5. Reduced errors and increase accuracy
6. Improved decision making capability
7. Improved customer satisfaction
8. Reduced quality cost.
9.Reduced Inventory
10.Improved information accuracy.
MIS - What you nttd to know?
what a manager needs to know on this subject to be competent enough to manage the hardware, software, data
and network resources of a business and apply that knowledge for the strategic success of the organisation.
The field of information systems encompasses many complex technologies, behavioural concepts and a large
number of specialised applications in business and non-business areas.
What a manager need to understand is:
 The basic concepts of information systems and information technology;
 The planning of Information systems
 Business applications of information systems for the operations,
 The development process of information systems; and
 The challenges and issues in managing ISs /IT.

The major areas that any manager needs to know about information systems. The understanding of those areas
will help any business professional manager, entrepreneur or a business to become a better use ,developer, and
manager of information systems.

Basic Concepts of IS Business concepts of IT

Planning of MIS Development of MIS


MIS
Implementation of MIS
Managing Information systems
Business Applications of IS

Main areas of MIS

MANAGEMENT INFORMATION SYSTEMS: A CONCEPT


The purpose of an information system is to help an organization to manage its business better. In the past, both
business and management are very simple; because of very low competition. Whereas today due to high level of
competition both doing business and management have grown to unpredictable levels of complexity (difficulty).

Management Information Systems is an acronym of three words

MANAGEMENT
INFORMATION
SYSTEMS(MIS)

1.MANAGEMENT:MIS

MIS Consisting of people,machines,procedures,databases,and data models as its elements.The system gathers


data from the internal nd external sources of ana organization,process it an supplies information to assist
managers in the process of decision-making

Mis is not a single system,it is Integrated system where parts(sub-systems)fir into an overall design.
MIS refers to a computer-based system that provides managers with a tools for organizing, evaluating and
efficiently running their departments.
MANAGEMENT : It covers the planning, control and administration of the operations of a concern.
TYPES OF MANAGEMENT:
1. Top Level Management : handle planning.
2.Middle Level Management :concentrates on controlling
3. Low Level Management : concerned with actual administration
Management has been defined variously by different scholars.
However, According to scholar Koontz’s “ management is the art of getting things done through the people.”
However, a manger alone cannot get things done through a magic stick. Instead he can perform with the help of
managerial functions in a systematic way.

MANAGERIAL FUNCTIONS:
1. Planning
2. Organisation – dividing the job into tasks to different people
3. Staffing – putting right person on the right job
4. Directing
5. Controlling

1.Planning: planning is a process that involves setting goals and organizing the activities required to achieve the
goals. It bridges a gap between where we are and where we want to be.

As planning Involves charting the future course of action,it generally answers the following questions:

• What to do?
• When to do?
• Who is to do?
• How is it to be done?
• Where is it to be done?
• Why is it to be done? etc.

Managers plan by setting goals and objectives and lay down policies, procedures, rules,programmes, budgets.
strategies and schedules to achieve the plan.

Organizing:
Organizing is the process of identifying the entire job, dividing the job into convenient subjects/tasks, allocating
sub-jobs to person/group of persons and delegating authority to each so that the job is carried out as planned. It
is a Job-oriented

Staffing
Staffing is the processs of putting the right person at the right job. It is person-oriented

Directing:
It includes:
(i) Communication,
(ii) Motivation, and
(iii) Leadership
Directing is important because in order to achieve pre-determined goals and objectives, people planning the
organisation have to be guided, motivated and led by the maanger.

Controlling
Controlling and planning art the two sldes of the same coin. Controlling is a process which involves:
(i) Faxing standards for measuring work performance,
(ii) Measurement of actual performance,
(iii) Comparing actual with standards and finding out deviations, if any, and
(iv) Taking corrective actions.

MANAGEMENT HIERARCHY
These three levels, viz., Operational Control (operating management, Management Control (middle
management); and Strategic Planning (top management)

Strategic Planning

Management Control level

Operational Controllevel

INFORMATION

Information is considered as a valuable resource required by the management in order to run a business
organization.

 Information is data that is processed and is presented in desired format to help managers for decision making.
SYSTEMS
A system has one or multiple input (S); these inputs are processed through a transformation process to convert
this input (S) into outputs (S).
IT NATURE AND SCOPE OF MIS:
MIS – system
IT – Sub-system
MIS – It deals with planning, development, applications and management of Information System (IS) to help
decision makers of an organization.
IT – it refered to the technological side of MIS, which includes computer hardware, software, database, computer
network and other devices.
NATURE AND SCOPE OF MIS: The below figure refers both science subjects and arts subjects So MIS called
as interdisciplinary in nature.
 There has been a lot of debate on the issue whether MIS is more management oriented or computer oriented
though there are advocates (supports) of both the sides,
MIS should be considered more of a management subject than of computers because of simple logic that
computers are just a tool in the hands of managers.

MIS caters to information needs of managers in an organization, thus its scope lies in structured as well as
unstructured type of information which could be gathered from internal as well as external sources of the
organization.
 With the advent of computers and communication technology (CCT), the scope of MIS has increased a
lot.
 Though you find manual information systems (such as pencils, papers or calculators) to convert raw data
into information. However because of high potential of computers and CCT organizations would like to
make use of advanced CCT.
 Digital Organization, E-Commerce

PSYCHOLOGY
E-BUSINESS
E-Commerce: Buying and selling of goods and services with the use of electronic systems customer such as
computers with the help of internet.

Examples of MIS

1. Payroll Is
2. Loan processing IS
3. Finance Is
4. CRM system
5. ERP System
6. Library Is
7. HR IS
8. Accounting Is
9. Customer Complaint handling system
10. Marketing Is
11. SCM System
12. Business Intelligent System
13. Customer Order IS
14. Online Leaarning and Teaching System
15. Manufacturing Resources Planning System

Concept OF MIS

MIS CHARACTERISTICS:

1. SYSTEM APPROACH
It means taking a complete look at the interlocking sub-systems that operate within an organization.
The system approach implies a holistic approach to the study of system and its performance in the light of
the objective for which it has been constituted.
2. MANAGEMENT ORIENTED

Top-down approach flowed.


Management-oriented characteristic of MIS implies that the management actively directs the system
development efforts.
Manager should spend a good amount of his/her time in system design.
3. NEED-BASED
MIS caters specific needs of managers
MIS design and development should be as per the information needs of managers at different levels, i.e.
(top) strategic planning level,( middle) management control level and ( low )operational control level.

4. EXCEPTION-BASED
Exception-based reporting means an abnormal situation i.e. maximum, minimum or expected values vary
beyond tolerance limits.

In such cases, there should be exception reporting to the decision-maker at the required level.
5. FUTURE-ORIENTED
MIS not only provide past information but also it predicts future on the basis of projections.
6. INTEGRATED
It is significant because of its ability to produce more meaningful, information.
For example, in order to develop an effective production scheduling system, it is necessary to balance
such factors as,
 Set-up costs
 Workforce
 Overtime rates
 Production capacity
 Inventory level
 Capital requirements
 Customer services
INTEGRETED MEANS – taking a complete look at the complete picture of the interlocking sub-systems
that operates within the company.
Thus, an integrated system that blends information from several operational areas is a necessary
characteristic of an MIS
Opportunity to avoid duplication and redundancy in data gathering, storage and dissemination.
7. COMMON DATA FLOWS
The development of common data flow, is an economically sound and logical concept, but it must be
viewed in a practical light.
For example, customer orders are the basis for billing the customer. For the goods ordered, setting up
accounts receivables, initiating production activity, sales analysis, sales forecasting etc.
It is necessary to capture and use this data throughout the functional areas.
8. LONG-TERM PLANNING
The MIS designer must have the future objectives and needs of the company in mind.
MIS is developed over relatively long periods such systems do not develop overnight.
9. SUB-SYSTEM CONCEPT
MIS is complex and one is likely to look insight frequently.
Thus the system, though viewed as single entity, must be broken down into digestible subsystems, which
are more meaningful at the planning stage.

10. CENTRAL DATABASE


It is the mortar that holds the functional system together.
If the data is stored efficiently and with common usage in mind, one master file can provide the data
needed by any of the functional system.

STRUCTURE OF MIS:
 MIS uses data from the transaction processing files within MIS program.
 MIS programs are tools that help to manipulate the raw data into meaningful reports that a user can
request.

MIS Structure may be described by following a variety of different approaches:

1.Physical components
2.Information System processing Functions.
3.Decision Support
4.Levels of management activities.
5.organizational functions.

Structure of MIS is a difficult concept to understand because there is no standard or universally accepted
framework for describing MIS.

 Different approaches may be used while describing an entity.


For example, car may be perceived in a number of different ways,
a. Physical characteristics – shape, colour, doors, seating capacity etc.

b. Component system – engine

c. Major use – passenger car, sports car etc.

 Each of above approaches would provide an understanding to the person about the car.
 Similarly, a department may be understood in terms of its,

a. Functions like sales, advertising, and market research.

b. Organizational structure – marketing department

Marketing manager
Sales officer
 Thus, multiple approaches help in describing the structure of an entity in a better way.

1. MIS STRUCTURE BASED ON PHYSICAL COMPONENTS:


The physical components of MIS may be hardware, software, database, manual procedures and operating
persons.
2. INFORMATION SYSTEM PROCESSING FUNCTIONS:

1.To Process Transactions


2.To maintain master Files.
3.To Produce Reports.
4.To produce Enquiries.
5.To Process Interactive supportive applications
3. DECISION SUPPORT
 The structure of MIS can also be described on the basis of its support in decision making in an
organization.

 A highly structured decision can be pre-planned, where as highly unstructured decision cannot.
 The structured, programmable decision tends to be routine and frequently repeated.
4.LEVELS OF MANAGEMENT ACTIVITIES
A. Strategic planning

B. Management control level

C. Operational control level

a.STRATEGIC PLANNING LEVEL (long range considerations) It includes – business directions, market
strategy, product mix etc.
b. MANAGEMENT CONTROL LEVEL
It includes acquisition and organization of resources, structuring of work and acquisition and training of
personnel.
c. OPERATIONAL CONTROL LEVEL (short term decisions for current operations)
 It includes pricing, production levels, inventory levels etc.
 The information systems would be different for the three levels of management hierarchy.
5.ORGANIZATIONAL FUNCTIONS
 A typical set of functions in a manufacturing organization includes production, sales and
marketing, finance and accounting, materials, personnel and information systems.
ROLE OF MIS IN GLOBAL BUSINESS
MIS plays a crucial role in almost all kinds of organizations irrespective of their size and nature of business. MIS
has evolved from traditional electronic data processing (EDP) systems to highly integrated information systems
(enterprise information systems like ERP, CRM, SCM).
Many advances in IS/IT have led to a fundamental shift in the role of information systems.
Today, lnternet-based and web-enabled systems and global e-business and e-commerce systems are becoming
quite common in the operation and management of a business organization.

The role of MIS in impacting the business globally.

(I) INTEGRATION OF FUNCTIONAL AREAS:

 Integrated information systems play a very important role in integrating the various functional areas of a
business organisation. Because a highly integrated information systems like ERP are designed on the
premise of a common database and a common interface for all the functional areas and thus have the
ability to automatically update data among related functions or activities.
 For example, when a customer places an order and the order is entered into the system (either online or
offiine), it triggers many actions across various departments or functional areas like inventory
management; production planning; finance; marketing and so on.
 The invoices are generated. production schedule is planned. the inventory status is verified: the items. if
not available in the stock, are ordered: and the customer is informed about the likely date of the delivery
of the ordered item. AU these actions are taken automatically and data updation happens instantaneously.
 This role of ERP in integrating various functional areas leads to improved responsiveness across the
organisation, and thus enables better decision-making and problem solving in organisations.
 This, in turns, leads to reduced lead time (the elapsed time between placing an order and receiving it):
reduced cycle time (the time between placing an order and delivery of the product); efficient usc of
resources; on time delivery of products; transparency; and overall customer satisfaction.

(II) REENGINEERING OF BUSINESS PROCESSES

 Highly integrated information systems like ER.P Systems are process-oriented and one of the pre-
requisites for the implementation of ERP systems is business process re-engineering (BPR).
 Thus ERP Systems force the organizations to re-engineer or redesign their obsolete function oriented
business processes.
 To implement ERP System, organizations have to either adopt ERP-based processes or modify ERP
System so as to match its existing business processes. Since ERP Systems are designed and developed on
the basis of the best practices of industry, it is generally recommended to adopt ERP processes.

(III) STANDARDIZATION OF SYSTEM AND PROCEDURES

 Highly integrated information systems, which are based on an integration approach, enables an
organization to follow standardized systems and procedures across the organizational units.
 This brings about consistency in the entire organisation. This becomes all the more important for the
organizations, which have either acquired other company or got merged with some other company.
 ERP ensures that the new company after the acquisition or merger uses the same information systems
throughout and follows the similar procedures.

(iv) Networked Business

 The integration of highly integrated information systems now a days are extended beyond the boundaries
of an organization leading to network with the business partners of the organization like Supply Chain
Management (SCM) System; Customer Relationship Managemem (CRM) System, etc.
 This network with the partners of the organization enables it to exchange electronically various business
documents like purchase orders, sales order, invoices, billing, etc.

CHALLENGES OF MANAGING MIS:

1. UNDERSTANDING THE NEED & ALIGNING MIS WITH BUSINESS


2. Requirement analysis
3. Project management
4. Re-engineering of business Processes
5. Change management
6. Security and ethical issues

1.UNDERSTANDING THE NEED & ALIGNING MIS WITH BUSINESS


 The success of MIS depends significantly on understanding the need for an IS and aligning business
with IS/IT.
 Generally IS are developed or acquired without understanding the specific needs of the organization
for such systems.

The goal of the IS and the reasons for implementing it, along with the subsystems or major tasks involved,
are not always clearly defined.
 Many a time IS/IT systems are conceived which may not be aligned with the mission and goals of the
organization.
 As a result, the ISs may not be contributing any value to the organization.
2.REQUIREMENT ANALYSIS
 Many a time, the manager (user) is not very clear about his/her requirements and thus it is left to the
IT specialist, who does not know much about the business.
 Thus there remains a communication gap between the user and the IT specialist.
 As a result, the newly developed and implemented Information System (IS) does not later to the needs
of the user.

3.PROJECT MANAGEMENT
 IS to be successful must be developed / implemented within time, budget and meet the quality
standards.
 There may be many challenges in managing an IS/IT, as follows.
a. Unrealistic deadlines
b. Failure to manage risk
c. Lack of project management skills
d. Non-involvement of customers and end-users during the project.

4.RE-ENGINEEING OF BUSINESS PROCESSES


 Automation of the business process may not make the operation efficient and effective.
 Rather it is redesigning of the business processes that is more important to improve the performance
of the business.
 Re-engineering of the business process would change the structure as well as the way an organization
does its business and thus leading to change in the organizational culture.

5.CHANGE MANAGEMENT
 Integrated information systems like ERP systems, being a transformation and an expensive solution, it is
not an easy decision, and thus needs to be deal with great care.
 ERP implementation is like a corporate equivalent of a brain transplant. The risk was certainly disruption
of business, because if you do not ERP implementation experiences from different companies.
 FOR EXAMPLE, in case of fox Meyer drugs, a $5 billion pharmaceutical wholesaler, the company had
to file for bankrupty protection, and then was bought out by its arch competitor McKesson drugs.

6.SECURITY AND ETHICAL ISSUES


 There is always a threat to the security of an IS which needs to be managed to protect data resources in an
organization.
 Similarly managers are often challenged by the ethical responsibilities generated by the use of IS/IT

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