UNIT-1

 MIS - Introduction

To the managers, Management Information System is an implementation of the

organizational systems and procedures. To a programmer it is nothing but file
structures and file processing. However, it involves much more complexity.

The three components of MIS provide a more complete and focused definition,
where System suggests integration and holistic view, Information stands for
processed data, and Management is the ultimate user, the decision makers.
DATA AND INFORMATION
• Data: facts and figures that are not currently being used in a decision process; form of
historical records that are recorded and filed without immediate intent to retrieve for decision
making.
• Information: data that has been retrieved, processed, or otherwise used for informative or
inference purposes, argument, or as a basis for forecasting or decision-making.

Management information system can thus be analyzed as follows −

Management
Management covers the planning, control, and administration of the operations of a
concern. The top management handles planning; the middle management concentrates
on controlling; and the lower management is concerned with actual administration.
Information
Information, in MIS, means the processed data that helps the management in planning,
controlling and operations. Data means all the facts arising out of the operations of the
concern. Data is processed i.e. recorded, summarized, compared and finally presented
to the management in the form of MIS report.
System
Data is processed into information with the help of a system. A system is made up of
inputs, processing, output and feedback or control.
Thus MIS means a system for processing data in order to give proper information to
the management for performing its functions.
Definition
Management Information System or 'MIS' is a planned system of collecting, storing,
and disseminating data in the form of information needed to carry out the functions of
management.

 Objectives of MIS

The goals of an MIS are to implement the organizational structure and dynamics of
the enterprise for the purpose of managing the organization in a better way and
capturing the potential of the information system for competitive advantage.

Following are the basic objectives of an MIS −

 Capturing Data − Capturing contextual data, or operational information that

will contribute in decision making from various internal and external sources of
organization.
 Processing Data − The captured data is processed into information needed for
planning, organizing, coordinating, directing and controlling functionalities at
strategic, tactical and operational level. Processing data means −
o making calculations with the data
o sorting data
o classifying data and
o summarizing data
 Information Storage − Information or processed data need to be stored for
future use.
 Information Retrieval − The system should be able to retrieve this
information from the storage as and when required by various users.
 Information Propagation − Information or the finished product of the MIS
should be circulated to its users periodically using the organizational network.

Characteristics of MIS

Following are the characteristics of an MIS −

 It should be based on a long-term planning.

 It should provide a holistic view of the dynamics and the structure of the
organization.
  It should be planned in a top-down way, as the decision makers or the
management should actively take part and provide clear direction at the
development stage of the MIS.
 It should be based on need of strategic, operational and tactical information of
managers of an organization.
 It should be able to make forecasts and estimates, and generate advanced
information, thus providing a competitive advantage. Decision makers can take
actions on the basis of such predictions.
 It should create linkage between all sub-systems within the organization, so
that the decision makers can take the right decision based on an integrated
view.
 It should allow easy flow of information through various sub-systems, thus
avoiding redundancy and duplicity of data. It should simplify the operations
with as much practicability as possible.
 Although the MIS is an integrated, complete system, it should be made in such
a flexible way that it could be easily split into smaller sub-systems as and when
required.
 A central database is the backbone of a well-built MIS.

 Purpose of MIS
The main objectives of a Management Information System (MIS) are to help
organizations make decisions, increase profits, and manage more efficiently:
 Decision-making: MIS provides information to help executives make decisions that
advance the organization's strategy.

 Efficiency: MIS helps organizations manage more efficiently by reporting on business

operations.

 Profitability: MIS helps organizations increase their value and profits.

 Timeliness: MIS provides information in a timely manner so that managers can make
informed decisions.

 Accuracy: MIS provides accurate and reliable information so that managers can make
correct decisions and actions.
MIS systems collect, process, store, and disseminate data to generate information for
decision-making. They can produce a variety of outputs, such as reports, dashboards,
and summaries, to meet the needs of different levels of management.
 Role of MIS In Business Organisation

Management Information Systems (MIS) play a crucial role in business organizations

by facilitating decision-making, improving efficiency, and enhancing communication.
Here are some key roles of MIS:

1. Data Management: MIS collects, stores, and processes data from various
sources, providing a centralized repository of information that can be easily
accessed and analyzed.
2. Decision Support: By providing timely and relevant information, MIS aids
managers in making informed decisions. This includes generating reports,
forecasts, and performance metrics.
3. Operational Efficiency: MIS streamlines processes by automating routine
tasks and enabling better resource allocation, which can lead to increased
productivity and reduced costs.
4. Strategic Planning: MIS helps organizations analyze trends, assess market
conditions, and evaluate performance against goals, supporting long-term
strategic planning.
5. Improved Communication: MIS enhances communication within the
organization by facilitating information sharing and collaboration among
different departments and teams.
6. Performance Monitoring: It allows organizations to track key performance
indicators (KPIs) and monitor progress towards objectives, helping to identify
areas for improvement.
7. Customer Relationship Management: MIS can support CRM efforts by
managing customer data, tracking interactions, and analyzing customer
behavior to improve service and retention.
8. Regulatory Compliance: Many MIS systems help organizations ensure
compliance with industry regulations by maintaining accurate records and
generating necessary reports.
9. Risk Management: MIS aids in identifying potential risks and developing
mitigation strategies by analyzing data trends and forecasting potential issues.
  Pre-Requisite for Effective MIS
For a Management Information System (MIS) to be effective, there are several
prerequisites, including:

 Accurate and timely data: The data collected by the MIS should be accurate,
properly formatted, and stored in an organized way. It should also be collected from
reliable sources and the MIS should be able to provide real-time updates.

 User-friendly interface: The MIS should have an interface that is easy to understand
so that users can quickly retrieve and analyze data.

 Flexible reporting: The MIS should be able to generate both summary and detailed
reports, and users should be able to customize reports.

 Strong security: The MIS should have strong security protocols in place to protect
stored data, such as authentication, encryption, and access control.

 Well-understood business processes: The business processes should be carefully

mapped out and understood.

 Hardware and software: The hardware and software should be able to store and
manipulate the data.

 Good people: The people who design, implement, and use the MIS should be good.

 Components of MIS
A management information system is made up of five major components namely
people, business processes, data, hardware, and software. All of these components
must work together to achieve business objects.

People – these are the users who use the information system to record the day to day
business transactions. The users are usually qualified professionals such as
accountants, human resource managers, etc. The ICT department usually has the
support staff who ensure that the system is running properly.

Business Procedures – these are agreed upon best practices that guide the users and
all other components on how to work efficiently. Business procedures are developed
by the people i.e. users, consultants, etc.
Data – the recorded day to day business transactions. For a bank, data is collected
from activities such as deposits, withdrawals, etc.

Hardware – hardware is made up of the computers, printers, networking devices, etc.

The hardware provides the computing power for processing data. It also provides
networking and printing capabilities. The hardware speeds up the processing of data
into information.

Software – these are programs that run on the hardware. The software is broken down
into two major categories namely system software and applications software. System
software refers to the operating system i.e. Windows, Mac OS, and Ubuntu, etc.
Applications software refers to specialized software for accomplishing business tasks
such as a Payroll program, banking system, point of sale system, etc.

 MIS application in business

Management Information Systems (MIS) have a wide range of applications in
business, helping organizations streamline operations, improve decision-making, and
enhance overall efficiency. Here are some key applications of MIS in business:

1. Financial Management: MIS assists in budgeting, forecasting, and financial

reporting. It provides real-time financial data that helps managers make
informed decisions about investments and resource allocation.
2. Sales and Marketing: MIS supports sales tracking, customer relationship
management (CRM), and market analysis. It helps identify customer
preferences and trends, enabling targeted marketing strategies.
3. Operations Management: By monitoring production processes, inventory
levels, and supply chain logistics, MIS helps optimize operations, reduce waste,
and improve productivity.
4. Human Resource Management: MIS applications in HR facilitate employee
data management, payroll processing, performance evaluations, and
recruitment, ensuring efficient HR operations.
5. Project Management: MIS tools help in planning, scheduling, and monitoring
project progress. They provide insights into resource allocation, timelines, and
budgets.
 6. Customer Service: MIS systems enable organizations to manage customer
inquiries, complaints, and support requests efficiently, leading to improved
customer satisfaction and retention.
7. Strategic Planning: MIS aids in analyzing market trends, competitive analysis,
and internal performance metrics, helping organizations formulate and adjust
their strategic plans.
8. Risk Management: By analyzing data and identifying potential risks, MIS
helps organizations develop mitigation strategies and contingency plans.
9. Reporting and Analytics: MIS provides various reporting tools that help
visualize data, making it easier to interpret and communicate insights to
stakeholders.
10. Compliance and Regulation: MIS helps organizations maintain compliance
with industry regulations by tracking necessary documentation and generating
required reports.

 What is information in MIS?

Management Information Systems (MIS), "information" refers to data that has been
processed, organized, and structured in a way that makes it meaningful and useful for
decision-making. Here are key aspects of information within MIS:
1. Data Transformation: Information originates from raw data collected from
various sources. This data is then processed and converted into a structured
format, which may include calculations, summaries, or categorization.

2. Relevance: For information to be useful, it must be relevant to the specific

needs of the organization or its decision-makers. This relevance helps guide
strategic planning, operations, and resource allocation.
3. Timeliness: Information must be timely to be effective. MIS aims to provide
up-to-date data that can inform decisions quickly, especially in fast-paced
business environments.
4. Accuracy and Reliability: High-quality information is accurate and reliable.
Organizations must ensure that the data sources and processing methods used
in MIS produce trustworthy information.
 5. Format: Information can be presented in various formats, such as reports,
dashboards, charts, and graphs, making it easier for users to interpret and
analyze.
6. Context: Information is more valuable when it is presented within the
appropriate context. This includes understanding the business environment,
goals, and challenges that the information addresses.
7. Integration: MIS integrates information from different sources and
departments within the organization, providing a holistic view that supports
better decision-making.
8. Analysis: Information in MIS often includes analytical tools that help users
identify trends, patterns, and insights, allowing for more informed and strategic
decisions.

 Source of information in MIS

Sources of information in Management Information Systems (MIS) can be varied and

come from multiple internal and external channels. Here are some key sources:

Internal Sources
1. Transaction Data: Data generated from daily operations, such as sales
transactions, inventory levels, and payroll information.

2. Databases: Centralized databases that store structured data from various

departments, such as finance, human resources, and sales.
3. Reports and Dashboards: Pre-existing reports and dashboards created by
different departments that provide summaries and insights.
4. Employee Input: Feedback and information provided by employees through
surveys, performance evaluations, and other communication channels.
5. Operational Systems: Data from enterprise resource planning (ERP) systems,
customer relationship management (CRM) systems, and other operational
software.
External Sources
1. Market Research: Reports and studies from market research firms that
provide insights into industry trends and consumer behavior.

2. Competitor Analysis: Information gathered from competitors, including

pricing strategies, product offerings, and market positioning.
3. Government Data: Economic and regulatory data published by government
agencies, which can inform compliance and strategic planning.
4. Industry Reports: Publications from industry associations and consulting
firms that offer insights and forecasts relevant to specific sectors.
5. Social Media and Online Analytics: Data from social media platforms and
web analytics tools that provide insights into customer engagement and
preferences.
Data Collection Methods
1. Surveys and Questionnaires: Tools used to gather information from
customers, employees, and other stakeholders.

2. Interviews and Focus Groups: Qualitative methods to collect in-depth

insights from targeted groups.
3. Web Scraping: Automated techniques to extract data from websites for market
analysis or competitive intelligence.
4. IoT Devices: Data from Internet of Things (IoT) devices that can provide real-
time information about operations, equipment performance, or customer
interactions.

 Types of Information System

Information Systems are classified by organisational levels, mode of data,
processing, system objectives and type of support provided. Following are the TYPE
of information system:
1. Transaction Processing System (TPS):
 Transaction Processing System are information system that processes data
resulting from the occurrences of business transactions
 Their objectives are to provide transaction in order to update records and
generate reports i.e to perform store keeping function
 The transaction is performed in two ways: Batching processing and Online
transaction processing.
 Example: Bill system, payroll system, Stock control system.
2. Management Information System (MIS):
 Management Information System is designed to take relatively raw data available
through a Transaction Processing System and convert them into a summarized
and aggregated form for the manager, usually in a report format. It reports
tending to be used by middle management and operational supervisors.
 Many different types of report are produced in MIS. Some of the reports are a
summary report, on-demand report, ad-hoc reports and an exception report.
 Example: Sales management systems, Human resource management system.
3. Decision Support System (DSS):
 Decision Support System is an interactive information system that provides
information, models and data manipulation tools to help in making the decision
in a semi-structured and unstructured situation.
 Decision Support System comprises tools and techniques to help in gathering
relevant information and analyze the options and alternatives, the end user is
more involved in creating DSS than an MIS.
 Example: Financial planning systems, Bank loan management systems.
4. Experts System:
 Experts systems include expertise in order to aid managers in diagnosing
problems or in problem-solving. These systems are based on the principles of
artificial intelligence research.
 Experts Systems is a knowledge-based information system. It uses its knowledge
about a specify are to act as an expert consultant to users.
 Knowledgebase and software modules are the components of an expert system.
These modules perform inference on the knowledge and offer answers to a user’s
question
 Information requirements with particular reference to management
levels in MIS

In Management Information Systems (MIS), information requirements vary

significantly across different management levels. Here’s a breakdown based on the
three primary management tiers:

1. Operational Level
 Information Requirements:
o Daily transaction data (e.g., sales, inventory)
o Performance metrics (e.g., employee productivity, service quality)
o Scheduling and task management
 Characteristics:
o Detailed and specific data
o Focused on routine activities and short-term goals
o Often in real-time or near real-time format

2. Tactical Level
 Information Requirements:
o Summarized reports on operational performance
o Budgeting and resource allocation data
o Project progress reports and departmental KPIs
 Characteristics:
o Aggregated data that helps in decision-making for mid-term objectives
o Analytical information that aids in evaluating operational efficiency
o Regular updates (weekly or monthly) for trend monitoring
3. Strategic Level
 Information Requirements:
o Long-term forecasts and market analysis
o Competitive intelligence and risk assessments
o Comprehensive financial reports and business performance metrics
 Characteristics:
o High-level, synthesized data for long-term planning
o Focus on external trends and strategic alignment
o Infrequent updates, often quarterly or annually, but requires deep
analysis
Summary

 Operational: Focused on day-to-day activities, requiring detailed, real-time

information.
 Tactical: Supports mid-level management with summarized reports and
performance insights for effective resource management.
 Strategic: Aims at long-term planning and decision-making, relying on high-
level analytics and comprehensive data.

 Relevance of information in decision making in MIS

Information plays a crucial role in decision-making within Management Information
Systems (MIS). Here are some key points highlighting its relevance:
1. Informed Decisions
 Accuracy and Timeliness: Relevant information ensures that decisions are
based on the most accurate and current data, reducing the risk of errors.
 Data-Driven Insights: Access to reliable information enables managers to
make decisions grounded in facts rather than assumptions.
2. Problem Identification
 Trend Analysis: Information helps identify patterns and trends, allowing
managers to spot potential issues before they escalate.
 Root Cause Analysis: Detailed data aids in understanding the underlying
causes of problems, facilitating more effective solutions.
3. Performance Measurement
 KPI Tracking: Relevant information allows for the monitoring of Key
Performance Indicators (KPIs), helping evaluate organizational performance.
  Benchmarking: Comparing performance against industry standards or
historical data provides context for decision-making.
4. Resource Allocation
 Efficiency Optimization: Information on resource utilization helps in making
informed decisions about allocating resources more effectively.
 Cost-Benefit Analysis: Access to financial data enables managers to weigh the
costs and benefits of different options.
5. Strategic Planning
 Forecasting: Relevant market and financial information supports long-term
strategic planning and risk management.
 Scenario Analysis: Information allows for modeling different scenarios and
assessing potential impacts on the organization.
6. Enhancing Communication
 Transparency: Sharing relevant information fosters transparency, facilitating
better collaboration among teams.
 Alignment: Ensures that all levels of management are aligned with the
organization’s goals and objectives.
7. Adaptability and Responsiveness
 Quick Decision-Making: Timely access to relevant information enables
organizations to respond quickly to market changes or operational challenges.
 Agility: Information-driven decision-making promotes organizational agility,
allowing for adjustments in strategies as needed.