Management Information Systems

(MIS)
Ranjith Karat
LEAD College of Management
Module II
Structure of MIS: Basic structural concepts: formal and
informal information systems; public and private
information
systems; multiple approaches to the structure of MIS:
Operational elements (physical components, process,
outputs for users), activity subsystems, functional
subsystems and decision support – synthesis of multiple
approaches into a conceptual structure for MIS.
MIS??
 Right Information
 To the right person
 At the right place
 At the right time
 In the right form
 At the right cost
Multiple Approaches to the Structure of
MIS
 Structure of MIS is a difficult concept to understand as
there is no standard or universally accepted framework for
describing MIS.
 It can be described by following a variety of different
approaches.
 Physical Components
 Information System processing functions
 Levels of management activities
 Organizational functions
 Decision Making
MIS structure based on Physical
components.
 Hardware: physical data processing equipment and
peripheral devices.
 Software: instructions or programs that direct the
operation of the hardware.
 Database: all data utilized by application software.
 Input and output: various physical input and output from
the information system, existing in the form like printout,
report etc.
Information System Processing Functions
 Based on the main processing functions of the information
system
 To process transactions: any activity taking place in the
organization
 To maintain master files: stores the historical data about the
organization
 To produce reports
 To produce interactive support applications
Levels of Management activities
 The structure of an IS can be categorized in terms of level
of the management activities.
 Strategic planning deals with long-range considerations
like the choice of business directions, market strategy,
product etc.
 Management control level includes acquisition and
organization of resource, structuring of work and training
of personnel.
 Operational control is related to short-term decision
for current operations. Pricing, inventory level etc
Organizational functions
 Structure of IS can also be described in terms of the
organizational functions.
Based on Decision Making
 Nature of decisions vary for each hierarchical level in
each management function.
 Broadly, these decisions can be classified in two ways as:
structured (programmable) decisions and unstructured
(non programmable) decisions.
 MIS requirements for structured programmable decisions
are clear, unambiguous and decision making logic can be
formulated.
 These are normally related to the requirements of
transaction processing and operation control levels in
various functions of the organization.
Cont..
 MIS requirements for unstructured non programmable
decisions are ambiguous and often frequently changeable.
 These are normally related to the requirements of strategic
planning and some times, for management control levels.
 MIS structure should address to the needs of both the
types of decision making mentioned earlier.
Basic Structural Concepts
 There are basic structural concepts relating to the structure
of MIS.
 Public IS
 Private IS
 Formal IS
 Informal IS
 Formal Public IS
 Formal Private IS
 Informal Public IS
 Informal Private IS
 Public Information System
 Information which can be utilized by all personnel who have
authority to access the information
 Private Information System
 Kept by individuals and may help and supplement the public
system
 Formal Information System
 Information represented as records and documents. These are
well prescribed rules and procedures to be followed in formal
information system.
 Informal Information System
 Information not represented by any records and documents
 Formal Public Information System
 MIS with its specified rules and procedures.
 Informal Public Information System
 Specified rules and procedures are not part of this but
information which benefits all the people in organization.
 Formal Private Information System
 Formal information with specific importance accessible to only
an individual.
 Informal Private Information System
 Many individuals may maintain their own private informal
information system for discharging their duties more effectively
and efficiently.
Approaches to MIS
 Top-down approach
 Bottom-up approach
 Integrative approach
Top-down Approach
 Management takes initiative in formulating major
objectives, policies and plans and communicates them
down the line to middle and operational levels for
translating them into performance levels.
 Managers other than those at top levels have little

role in planning, they have to only concentrate on

implementation and day–to–day control.
 Crucial strategic and tactical decisions are defined &
necessary decisions to operate the activities are specified.
Bottom up Approach
 Starts with the lowest-level management of the hierarchy
and proceeds progressively through higher levels of the
management.
 After identifying the basic transactions, information file
requirements and information processing programs,
develop information system for each day to day activity.
 Then move towards the integration of data kept in
different data files of each information system.
Integrative Approach
 Overcomes the limitations of the previous two
approaches.
 Integrative approach permits managers at all levels to
influence the design of MIS.
 Top management identifies the structure and design of
MIS suitable to the concern.
 This design is further presented to lower level managers
for their views and modifications.
 The managers at the lower level are permitted to suggest
changes, additions, or deletions and return the design with
their suggestions to the top level for approval.
 The revised design is evaluated by the top level and sent
down again in a modified form for further consideration if
required.
 This evaluation, modification and approval process
continues until a final design is achieved, that is suitable
for all levels.
Operational Elements of MIS
 MIS structure is created on its operating elements.
 There are three operating elements: physical components,
processing functions and outputs for the users of
information.
 Physical components are: hardware, software, database,
algorithms (procedures or logic) and the people/experts in
information technology function.
 Processing functions include: transaction processing, data
base maintenance, reports production, enquiry processing
and interactive support applications.
 Types of outputs are: transactional types or action oriented,
informational and decision support types.
Outputs of MIS
 Scheduled reports which are produced periodically, or on
a Schedule (daily, weekly, monthly).

Daily Sales Detail Report

Prepared: 08/10/xx
Order Customer Sales Ship
# ID Rep ID Date Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $3,214
P12453 C89321 CAR 08/12/96 288 P3214 $5,660
P12453 C03214 GWA 08/13/96 12 P4902 $1,224
P12455 C52313 SAK 08/12/96 24 P4012 $2,448
P12456 C34123 JMW 08J/13/96 144 P3214 $720
 Key-indicator report which summarizes the previous
day’s critical activities and also it is typically available at
the beginning of each day.

Daily Sales Key Indicator Report

This Last Last

Month Month Year

Total Orders Month to Date $1,808 $1,694 $1,014

Forecasted Sales for the Month $2,406 $2,224 $2,608

 Demand report which gives certain information at a
manager’s request.

Daily Sales by Sales Rep Summary Report

Prepared: 08/10/xx
Sales Rep ID Amount
CAR $42,345
GWA $38,950
SAK $22,100
JWN $12,350
 Exception report which is automatically produced when
a situation is unusual or requires management action.

Daily Sales Exception Report – ORDERS OVER $10,000

Prepared: 08/10/xx
Order Customer Sales Ship
# ID Rep ID Date Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $13,214
P12453 C89321 CAR 08/12/96 288 P3214 $15,660
P12453 C03214 GWA 08/13/96 12 P4902 $11,224
… … … … … … …
… … … … … … …
 Drill Down Reports: Provides detailed data about a
situation.

Earnings by Quarter (Millions)

Actual Forecast Variance
2ND Qtr 1999 $12.6 $11.8 6.8%
1st Qtr 1999 $10.8 $10.7 0.9%
4th Qtr 1998 $14.3 $14.5 -1.4%
3rd Qtr 1998 $12.8 $13.3 -3.0%
Subsystems of MIS
 Two approaches to define subsystem
 Organizational Function Subsystem: Supports the various
functions of an Organization. Eg. Marketing, Production,
Personnel etc.
 Activity Subsystem: Supports the activity for which they are
used. Eg. Transactions, Operations etc.
Organizational Function Subsystem
Major Functional Subsystems Some Uses
Marketing Information System Sales forecasting, Sales planning, Sales
analysis
Manufacturing Information System Production planning & scheduling, cost
control analysis
Personnel Information System Salary Admn., Planning HR requirement,
performance analysis
Accounting Information System Financial Analysis, cost analysis, Capital
planning, etc.
Logistics Information System Planning & control of Purchasing,
inventories, distribution.
Information Processing System Planning of Information System, cost –
effectiveness analysis
Top Management System Strategic Planning, resource allocation
Activities Subsystem
Activity Subsystems Some Uses

Transaction Processing System Processing of orders, shipments, &

receipts

Operational Control System Scheduling of activities and

performance reports

Management Control System Formulation of Budgets & resource

allocation

Strategic Planning System Formulation of Objectives & strategic

plan
How systems are built from subsystems
 Decomposition
 A complex system is very difficult to understand as a whole.
 Therefore, it is decomposed or divided into subsystems. The
sum of subsystems constitutes the entire system.
 The process of decomposition is continued with subsystems
divided into smaller subsystems until the smallest subsystem
are of manageable size.
 These subsystems generally form hierarchical structure.
 Hierarchical relations of subsystems
System
Subsystem A Subsystem B Subsystem C

A1
An example of Decomposition
 Information system divided into subsystem such as:
 Sales & Order entry
 Inventory
 Production
 Personnel & Payroll
 Purchasing
 Accounting & Control
 Planning
 Each subsystem is further divided into subsystems. Ex.
Personnel & Payroll:
 Personnel Reports
 Payroll data entry & validation
 Hourly Payroll processing
 Salaried payroll processing
 Payroll Report for management
 Payroll report for Government

 The hourly payroll processing might be divided into

modules for calculation of deductions & net pay, payroll
register & audit controls preparations, register & controls
outputs.
 Simplification
 The process of decomposition could lead to a large
number of subsystem interfaces to define.
 Simplification is the process of organizing subsystems
so as to reduce the number of interconnections.
Method of simplification is:
 Clusters
 Decoupling
Depiction of all systems interconnected:
 Cluster Method
 Clusters of subsystems are established which interact with
each other, then a single interface path is defined from the
cluster to other subsystems or clusters of subsystems

A1 A2 B1 B2

A3 A4 B3 B4
 Decoupling
 In IS emphasis is placed on decoupling of subsystems, so that
each subsystem is as independent as possible.
 The more decoupled (loosely coupled) the system, the easier it
is to modify the subsystem without affecting the rest of the
system.
 Decoupling can be achieved by defining subsystems so that
each performs a single complete function. Thus connections
between subsystems are minimized.
Synthesis of multiple approaches into a conceptual structure for MIS.

 There are various approaches to describe the structure of

MIS.
 The structure of MIS has been explained in terms of
decision making, management activity, organizational
functions and operating elements.
 These different approaches of MIS can be combined to get
an overall perspective of MIS structure.
 This process of combining these different approaches of MIS
is called SYNTHESIS OF MANAGEMENT
INFORMATION SYSTEM.
 This can be of two ways
 Conceptual structure
 Physical structure
Conceptual Structure
 The conceptual structure of an MIS is defined as a
federation of functional subsystems, each of which is
divided into four information processing components:
(1) Strategic planning
(2) Management control
(3) Operational control
(4) Transaction Processing
Physical Structure
 The physical structure of an MIS would be identical to the
conceptual structure if all applications consisted of
completely separate programs used by only one function

 We can implement two methods

(1) Integrated processing
(2) Use of common modules
Integrated Processing
 Integrated processing is achieved by designing several
related applications as a single system in order to simplify
the interconnections and reduce duplications of input.
Use of common modules
Previous Years University Exam
Questions
 What are the various approaches to MIS (3)
 What are the operational elements of MIS (1)
 Explain the subsystem concept of MIS (6)
 What is informal information system (1)
 Explain multiple approaches to the structure of MIS (6)
 Explain activity subsystems of MIS (3)
 Explain synthesis of multiple approaches into a
conceptual structure of MIS (6)