Management of Information System
(MIS) - MBA SOL Semester 2
1. Role, Objectives, and Characteristics of MIS
Management Information System (MIS) is a structured system that helps in the collection,
processing, storage, and dissemination of information for decision-making in an
organization. It plays a vital role in managerial operations and is a foundation for effective
planning, control, and coordination.
Role: MIS supports decision-making by providing timely, relevant, and accurate
information. It streamlines business operations, improves productivity, and enhances
strategic planning.
Objectives:
- To facilitate decision-making at all organizational levels.
- To enhance efficiency in business processes.
- To support data management and reporting.
- To provide real-time information access.
- To coordinate departmental activities.
Characteristics:
- Systematic: Follows a structured data flow and hierarchy.
- Integrated: Connects various departments and functions.
- Accurate and Timely: Ensures decisions are made using correct, real-time data.
- User-friendly: Designed for ease of use by managers and employees.
MIS operates at three levels: operational (routine tasks), tactical (resource control), and
strategic (long-term planning).
2. Evolution of IT and Problem Solving
The evolution of Information Technology (IT) spans multiple generations, from basic
computing to advanced analytics and cloud solutions. Initially, IT was used for automating
repetitive tasks like payroll and invoicing. Over time, it has become central to strategic
management and complex problem solving.
Evolution Stages:
1. Data Processing (1950s-60s): Simple calculations, punch cards.
2. Management Reporting (1970s): Report generation for internal use.
3. Decision Support Systems (1980s): Integration of databases and models.
4. Enterprise Systems (1990s): ERP, SCM, and CRM integration.
5. Digital Transformation (2000s–Present): AI, cloud computing, IoT, and big data.
Problem Solving:
Modern IT aids in structured problem solving through:
- Data analysis and visualization (e.g., dashboards).
- Decision modeling and forecasting.
- Automation of error-prone manual processes.
Example: E-commerce companies use predictive analytics to forecast inventory and manage
logistics, enhancing customer satisfaction.
3. Approaches of IS Development
Information System (IS) development involves methodologies used to plan, create,
implement, and maintain systems. The major approaches include:
1. Waterfall Model: A linear model with phases like requirement, design, development,
testing, and deployment. Suitable for stable, defined requirements.
2. Prototyping Model: Early versions (prototypes) are built for user feedback. Helps refine
vague or evolving requirements.
3. Spiral Model: Combines design and prototyping in iterative cycles, emphasizing risk
management.
4. Agile Methodology: Iterative, collaborative, and flexible development using small releases
or sprints. Best for changing environments.
5. RAD (Rapid Application Development): Emphasizes quick development and iterative
feedback using reusable components.
Choosing an approach depends on time, cost, complexity, and user involvement. For
example, Agile is common in tech startups for its flexibility and speed.
4. Constraints of Information Systems
While IS improves efficiency, several constraints can impact its performance and success:
1. Technological Constraints: Incompatibility with existing systems, outdated infrastructure,
or lack of integration.
2. Human Constraints: Employee resistance, lack of training, or insufficient technical
expertise.
3. Financial Constraints: High costs of hardware, software, and skilled personnel.
4. Legal and Ethical Constraints: Data protection laws, cybersecurity, and ethical data usage.
5. Security Risks: Vulnerabilities like hacking, data theft, and malware attacks.
6. Time Constraints: Project delays due to design flaws or unrealistic timelines.
Diagram (Structure of Constraints):
+---------------------+
| Technical |
+----------+----------+
|
+----------v----------+
| Human Resource |
+----------+----------+
|
+----------v----------+
| Legal & Ethical |
+----------+----------+
|
+----------v----------+
| Budgetary |
+---------------------+
Understanding and managing these constraints leads to more successful IS implementation.
5. Advantages of Information Systems
Information Systems offer multiple benefits for modern organizations, helping them remain
competitive, efficient, and data-driven.
1. Faster Decision-Making: With access to real-time data, managers can make informed
decisions quickly.
2. Enhanced Productivity: Automation of tasks reduces human error and increases
throughput.
3. Cost Efficiency: Reduces the need for manual processes, thereby saving labor and
operational costs.
4. Improved Communication: Facilitates seamless communication across departments and
geographies.
5. Data Management: Centralized storage and retrieval enhance information integrity and
accessibility.
6. Customer Satisfaction: Systems like CRM track customer behavior and preferences,
enabling personalized service.
Example: In banking, core banking systems enable 24x7 access, real-time fund transfers,
and fraud detection tools.
By offering operational control, strategic advantage, and data accuracy, IS serves as a
cornerstone of organizational growth.
6. Disadvantages of Information Systems
While Information Systems (IS) significantly enhance efficiency and decision-making, they
also come with inherent drawbacks and risks that can affect individuals, businesses, and
economies.
1. High Implementation and Maintenance Costs:
The cost of acquiring, developing, and maintaining IS can be significant. Organizations must
invest in hardware, software, infrastructure, cybersecurity, and skilled personnel. For small
businesses, this could pose a financial burden.
2. Security Risks:
As IS are digital, they are vulnerable to cyber threats like hacking, phishing, ransomware,
and data breaches. Without strong cybersecurity, sensitive data (e.g., financial records,
customer information) may be compromised.
3. Overdependence and System Failures:
Businesses that heavily rely on IS are exposed to serious operational risks if systems fail or
crash. For example, downtime in an ERP system may halt production or delay transactions.
4. Job Displacement:
Automation through IS reduces the need for manual labor. This can lead to job losses,
especially in administrative roles. For instance, many companies now use automated
chatbots instead of human customer service agents.
5. Complexity and Resistance to Change:
Complex systems may be difficult to use. Employees may resist adopting new systems due
to lack of training or fear of job insecurity, delaying productivity.
6. Ethical and Legal Challenges:
Using IS involves collecting, storing, and processing large amounts of personal data, which
can raise concerns over surveillance, misuse of information, or non-compliance with data
protection laws.
Real-World Example:
In 2017, the WannaCry ransomware attack affected hundreds of organizations, including
the UK's NHS. It encrypted data and demanded ransom payments, showcasing the global
threat to IS security.
Conclusion:
Organizations must weigh these disadvantages and manage them proactively by investing
in training, cybersecurity, and regular audits to ensure IS adds value without introducing
critical vulnerabilities.
7. Role of IS in Business Development
Information Systems (IS) have evolved from mere data processing tools to strategic assets
that drive business development. They support innovation, enhance decision-making, and
enable businesses to gain a competitive advantage.
1. Strategic Planning and Decision Support:
IS helps businesses collect and analyze data to make strategic decisions. For example,
Business Intelligence (BI) tools identify market trends and customer behavior, enabling
informed planning.
2. Enhanced Operational Efficiency:
Automation of processes such as inventory control, payroll, and procurement reduces time
and cost while improving accuracy and speed.
3. Innovation Enablement:
IS supports innovation by providing platforms for product development, marketing
automation, and customer interaction. IT tools like AI, data mining, and predictive analytics
guide the launch of new services.
4. Competitive Advantage:
Organizations use IS to outperform competitors through better customer service, faster
delivery, and efficient supply chains. For example, real-time tracking systems allow e-
commerce platforms to ensure timely delivery.
5. Customer Relationship Management (CRM):
CRM systems store customer data, enabling personalized services, targeted marketing, and
improved after-sales support.
6. Collaboration and Communication:
IS enables seamless communication via emails, cloud platforms, and video conferencing,
enhancing coordination among global teams.
Real-Life Case:
Domino’s Pizza used IS to revamp its business by developing mobile apps, GPS tracking, and
customer analytics. This led to faster delivery and higher customer satisfaction, boosting
sales worldwide.
Conclusion:
The role of IS in business development is integral. It fosters scalability, market expansion,
and innovation, making it essential for any growth-driven organization.
8. OAS, TPS, DSS, GDSS, EIS, EUC
Organizations use various types of Information Systems (IS) at different management levels,
each with unique functions and users.
1. OAS – Office Automation System:
Supports routine office tasks like word processing, email, and scheduling.
Users: Clerks, assistants
Example: Microsoft Office, Google Workspace
2. TPS – Transaction Processing System:
Processes day-to-day business transactions such as sales, billing, or deposits.
Users: Operational staff
Example: POS systems in retail stores, ATM transactions
3. DSS – Decision Support System:
Assists managers in decision-making using data analysis and models.
Users: Mid-level managers
Example: Sales forecasting software, inventory reordering systems
4. GDSS – Group Decision Support System:
Facilitates collaborative decision-making in groups using shared data and voting tools.
Users: Committees, project teams
Example: Online brainstorming tools, voting software
5. EIS – Executive Information System:
Provides top executives with real-time summaries of organizational performance.
Users: Senior executives
Example: Dashboards displaying KPIs, financial reports
6. EUC – End User Computing:
Allows non-programmers to create applications or reports using tools like Excel, Access, or
low-code platforms.
Users: General employees with IT familiarity
Diagram – IS Hierarchy by User Level:
Executives → EIS
Managers → DSS, GDSS
Staff → TPS, OAS
All Users → EUC
Conclusion:
Each IS type plays a vital role in supporting workflows, strategy, and operations across all
levels of an organization.
9. IT-Enabled Services (ITES)
IT-Enabled Services (ITES) refer to operations that leverage Information Technology to
deliver business services across industries. These services rely on IT infrastructure and
expertise to enhance performance and reduce costs.
Key Categories of ITES:
1. BPO – Business Process Outsourcing:
Outsourcing back-office functions like HR, payroll, finance, and data entry.
Example: Genpact handling billing for telecom clients.
2. KPO – Knowledge Process Outsourcing:
Outsourcing tasks requiring specialized knowledge like legal research, equity analysis, or
pharma R&D.
Example: Evalueserve offering financial analytics to global clients.
3. LPO – Legal Process Outsourcing:
Specialized legal tasks such as document review, legal research, or compliance support.
Example: Indian LPOs supporting U.S. law firms.
4. Call Center Services:
Customer service, technical support, or sales conducted via telephone or chat.
Example: Tech support for Dell handled by Indian firms.
5. Medical Transcription & Billing:
Conversion of doctor-patient conversations into medical records; also includes healthcare
claim processing.
Benefits of ITES:
- Cost efficiency
- Access to global talent
- Focus on core competencies
- 24/7 service delivery
India as a Global ITES Hub:
India is a leading destination for ITES due to skilled manpower, time-zone advantage, and
language proficiency. Cities like Bengaluru, Pune, and Hyderabad house major ITES
companies.
Conclusion:
ITES plays a transformative role in global outsourcing, creating employment, and improving
service delivery for industries like finance, healthcare, telecom, and law.
10. System Development Life Cycle (SDLC)
The System Development Life Cycle (SDLC) is a step-by-step framework used to develop
information systems efficiently and systematically. It ensures that software meets user
requirements, performs reliably, and is delivered on time and within budget.
Phases of SDLC:
1. Planning:
Define objectives, scope, and feasibility. Create a high-level project plan.
2. System Analysis:
Gather detailed user requirements and understand current system limitations.
3. System Design:
Blueprint creation: UI layouts, database design, data flow diagrams, architecture.
4. Development:
Actual coding and software construction using chosen programming tools.
5. Testing:
Verify system functionality through unit tests, integration tests, and user acceptance tests.
6. Implementation:
Deploy the system in the production environment, with training and support.
7. Maintenance:
Ongoing support, updates, and bug fixes.
Diagram – SDLC Flowchart:
Planning → Analysis → Design → Development → Testing → Implementation → Maintenance
Real-World Example:
A bank developing a new mobile app would use SDLC to plan features, design UI, code, test
functionality (like fund transfers), and maintain it post-launch.
Conclusion:
SDLC brings structure and clarity to system development. It minimizes project risks,
enhances quality, and ensures the solution aligns with business goals.
11. SDLC Models
System Development Life Cycle (SDLC) models are structured approaches that guide the
software development process through various stages. Each model serves different project
needs based on complexity, risk, cost, and timeline. Below are the major SDLC models
widely used in IT and MIS development:
1. Waterfall Model: A linear and sequential approach. Each phase (Planning → Analysis →
Design → Development → Testing → Deployment → Maintenance) must be completed before
moving to the next. It’s suitable for projects with clear requirements but lacks flexibility.
2. V-Model: An extension of the Waterfall model where each development stage is directly
associated with a testing phase. It emphasizes early testing and is ideal for medical or
defense software.
3. Incremental Model: Development occurs in parts or increments, with each adding new
functionality. Feedback is taken after every release, making it useful for projects with
modular designs.
4. Spiral Model: Combines iterative development with risk analysis. Every cycle addresses
planning, risk analysis, engineering, and evaluation. It suits high-risk projects like aerospace
systems.
5. Agile Model: Focuses on iterative, incremental delivery through sprints. Customer
collaboration and adaptability are emphasized. It’s perfect for dynamic environments like
startups.
6. RAD: Prioritizes rapid prototyping over costly planning. It uses reusable components and
intensive user involvement, ideal for time-bound applications.
Conclusion: Choosing the right SDLC model ensures better project control, reduced risk, and
higher user satisfaction. Model selection depends on project scope, flexibility required, and
customer involvement.
12. ERP, CRM, and SCM
Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and
Supply Chain Management (SCM) are three pillars of modern business automation. They
work together to integrate and streamline core organizational functions.
ERP integrates all business functions—finance, HR, production, and procurement—into one
system. It ensures data consistency and streamlines processes.
Example: SAP ERP used by Siemens to centralize global operations.
CRM systems manage interactions with current and potential customers. They store
customer data, track sales, support marketing, and improve customer service.
Example: Salesforce CRM is used by Amazon to personalize recommendations.
SCM manages the flow of goods, information, and finances from suppliers to customers. It
includes logistics, warehousing, procurement, and inventory.
Example: Walmart uses SCM systems to minimize inventory costs and maintain product
availability.
Integration Benefits:
- Better decision-making through shared real-time data.
- Cost reduction due to process automation.
- Improved customer satisfaction from faster services.
Conclusion: When ERP, CRM, and SCM are integrated, organizations achieve enhanced
coordination, productivity, and competitive edge.
13. Legal Issues & National Information Infrastructure
The growth of digital systems has brought along legal and infrastructural concerns related
to data protection, privacy, and cybercrime.
Legal Issues:
1. Data Privacy: Organizations must protect personal data under laws like India’s Digital
Personal Data Protection Act (DPDP Act, 2023) and GDPR in Europe.
2. Cybersecurity Laws: India’s IT Act, 2000 regulates digital transactions, hacking, identity
theft, and penalties.
3. IP Protection: Copyright laws protect software and data designs from theft.
4. Digital Contracts: Legal recognition of electronic agreements and e-signatures.
Example: Companies mishandling user data, like Facebook–Cambridge Analytica, faced
global legal scrutiny and fines.
National Information Infrastructure (NII) includes all components required for nationwide
digital connectivity—telecom networks, data centers, internet gateways, policies, and IT
governance.
India’s NII Initiatives:
- Digital India Mission
- BharatNet Project (connecting 250,000 Gram Panchayats)
- Data Localization Policy
Conclusion: Legal compliance and robust national infrastructure are essential for a secure,
transparent, and reliable digital ecosystem.
14. IS Strategy Planning
Information Systems (IS) strategic planning aligns IT resources with business goals. It
defines how technology will support an organization's vision, ensuring future readiness.
Steps in IS Strategy Planning:
1. Environmental Analysis: Internal & external IT trends.
2. Business-IT Alignment: Identifying how technology can support business growth.
3. Resource Allocation: Assigning budget and staff to IS projects.
4. Prioritization: Choosing which IT initiatives are most important.
5. Implementation Roadmap: Phases of project roll-out and timelines.
Tools Used: SWOT, PESTEL, Balanced Scorecard, and Porter’s Five Forces.
Example: Infosys developed a strategic IS plan to migrate operations to cloud-based
services, improving scalability and reducing costs.
Benefits:
- Competitive advantage
- Cost control
- Risk management
- Technology-driven innovation
Conclusion: An effective IS strategy is not just a technology roadmap, but a business enabler
that supports agility, efficiency, and long-term success.
15. Reengineering Weak Processes through IT Application
Business Process Reengineering (BPR) involves redesigning and optimizing existing
business processes to improve efficiency, quality, and service. IT plays a critical role in
enabling BPR.
Steps in BPR using IT:
1. Identify Weak Processes: Bottlenecks, redundancies, and outdated workflows.
2. Analyze Process Gaps: Use flowcharts or data analytics to understand issues.
3. Design IT-Based Solution: Use ERP, AI, or automation to create faster, smarter workflows.
4. Implement Changes: Train staff, roll out new systems.
5. Evaluate & Refine: Monitor KPIs and adjust accordingly.
Example: ICICI Bank digitized its loan processing using workflow automation. What took 3–
4 days was reduced to minutes, improving customer satisfaction and lowering costs.
Technologies Used:
- Robotic Process Automation (RPA)
- Artificial Intelligence
- Cloud Platforms
- Business Intelligence Tools
Benefits:
- Cost savings
- Faster turnaround
- Higher transparency
- Improved compliance
Conclusion: Reengineering weak processes using IT enhances organizational agility,
customer experience, and long-term competitiveness.
