Management Information System

Introduction

     The Management Information System (MIS) is a concept of the last decade or two. It has been understood and described in a number ways. It is also known as the Information System, the Information and Decision System, the Computer based information System.

BASIC ELEMENTS OF MANAGEMENT INFORMATION SYSTEM

     The three components in MIS gives 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.

        Management information system can thus be analyzed as:

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.

Management

        Management is a vital aspect of the economic life of man, which is an organised group activity. It is considered as the indispensable institution in the modern social organization marked by scientific thought and technological innovations. One or the other form of management is essential wherever human efforts are to be undertaken collectively to satisfy wants through some productive activity, occupation or profession. It is management that regulates man's productive activities through coordinated use of material resources. Without the leadership provided by management, the resources of production remain resources and never become production.

      

        Management is the integrating force in all organized activity. They also have to organize and utilize their resources in such a way as to optimize the results. Not only in business enterprises where costs and revenues can be ascertained accurately and objectively but also in service organizations such as government, hospitals, schools, clubs, etc., scarce resources including men, machines, materials and money have to be integrated in a productive relationship, and utilized efficiently towards the achievement of their goals.

         Thus, management is not unique to business organizations but common to all kinds of social organizations. Management has achieved an enviable importance in recent times. It is the most vital forces in the successful performance of all kinds of organized social activities.

Composition of MIS

        MIS is a system or process that consists of people, machines, procedures, data methods and database as the elements of the system. Different components of MIS are discussed follows:

Physical component

1) Hardware:

       

        The hardware components of MIS are all the input and output devices which helps the feeling and displaying the information as per requirement. Different input devices are keyboard, scanners and mouse etc. The output devices are monitor, printer, network devices etc. Hardware devices are the physical parts of MIS. These can help in maintaining the data of business.

2) Software:

        Software are the programs and applications which convert machine into readable language. Different software generally used for processing the information of an organization are ERP and CRP, ERP is software package that combines all data and processes of an organization. In order to achieve the integration, it uses multiple components of computer software as well as hardware. Advantage of ERP system is that it uses a single, unified database to store data for various systems. Under ERP system all functions of an organization can be controlled. On the other hand, ORM is a software package which includes the capabilities, methodologies and technologies to support an organization in managing the relationship with customers. ORM can enable the organization to manage their customers through the introduction of reliable systems, processes and procedures.

3) Procedures:

        Procedure implies a set of sales and guideline, which are established by an organization for the use of a computer based information system, Procedure depends on the nature and purpose of the organization. So procedures are different for different organizations. Moreover, it may vary from one department to another department according to requirement. As for example, production department requires information on raw materials, quality of goods etc. But the sales department requires information on quality of goods to be sold, the expenditure of sale etc. So, different departments have to set their procedures in different ways so that the MIS can help in retrieving the information as per requirement of a particular department.

4) Personnel:

        Different personnel of MIS are computer experts, managers, users of computer based information system. Majority of the personnel use the computer based information for preparing plans and programmes, rules and regulations, and for taking different decisions.

Information System

1) Collection of Data:

        The designing of MIS is based on the collection of data. Generally, data are not collected independently for special purposes, but they are collected for multiple uses; such as, data of inventory can be used by managers in production, accounting and purchase department. After collection of data, assembly is immensely important. Data should be assembled according to needs and purposes of the management. There are mainly two sources of data and information: Internal source and external source. The company should use both these sources.

2) Processing:

        In the second step, data should be processed in a systematic manner. Processing of data implies editing of data, their classification and summation. By the editing of data, correction and modification can be done and classification should be done according to the need of organization. Summation is the process of grouping the data on the basis of similar nature as well as purpose.

3) Storage and Retrieval:

         In this step of MIS different activities such as indexing, coding, filing of data and information are done. As a result of this step, the managers and directors of the company can easily use and operate the data and information as per their requirement.

4) Evaluation:

        It is an important step, where accuracy and relevance of data can be determined. Determination of relevance of data is immensely important for taking effective decision at each level.

5) Dissemination :

        By this step relevant information is supplied in the proper form at the right time. Information should be supplied according to the requirement of the top management. So, it may be different for different companies and also may be different at different times of the same company.

        Steps of MIS can be changed by different companies according to their nature of activities. So, the steps should be determined as to provide the information systematically for taking effective managerial decisions. According to Stoller and Horn the designing of MIS consists of following steps

Ø Defining the operating and planning decisions that are required to manage     the organizations.

Ø Exploring the types of policies available for making each decision.

Ø Determining the data requirement implied by each decision policy.

Ø Developing preferred processing techniques for desired data set.

Decision support system

        The interrelationship of the sub systems within an organization is fundamental to the systems approach. The different components of the organization have to operate in a coordinated manner to attain common organizational goals. This results in synergic effects. The term synergy means that when different sub systems work together they tend to be more efficient than if they work in isolation). Thus, the output of a system with well integrated sub systems would be much more than the sum of the outputs of the independent sub systems working in isolation.

     The systems approach provides a total view of the organization. It enables analysis of an organization in a scientific manner, so that operating management systems can be developed and an appropriate MIS.

        By providing the required information, an MIS can help interrelate, coordinate and integrate different sub systems within an organization, thus facilitating and increasing coordinated working of the sub systems, with consequent synergism. The interaction between different components of the organization depends upon integration, communication and decision making. Together they create a linking process in the organization.

        Integration ensures that different sub systems work towards the common goal. Coordination and integration are useful controlling mechanisms which ensure smooth functioning in the organization, particularly as organizations become large and increasingly complex. As organizations face environmental complexity, diversity and change, they need more and more internal differentiation, and specialization becomes complex and diverse. The need for integration also increases as structural dimensions increase.

        Communication integrates different sub systems (specialized units) at different levels in an organization. It is thus a basic element of the organizational structure necessary for achieving the organization's goals.

Organizational structure and MIS

        MIS has been described as a pyramidal structure, with four levels of information resources. The levels of information would depend upon the organizational structure. The top level supports strategic planning and policy making at the highest level of management. The second level of information resources aid tactical planning and decision making for management control. The third level supports day to day operations and control. The bottom level consists of information for transaction processing. It then follows that since decision making is specific to hierarchical levels in an organization, the information requirements at each level vary accordingly.

        Thus, MIS as a support system draws upon:

Ø concepts of organization;

Ø Organizational theories, principles, structure.

Ø Motivation and leadership behavior.

Approaches to MIS:

There are two basic approaches for development of MIS:

a) System development life cycle:

The system development life cycle have following steps of development:

i) Systems Planning

ii) Systems Analysis

iii) Systems Design

iv) Systems Implementation

v) Systems Operation and Support (System Maintenance)

b) Prototyping:

        Prototyping is the process of creating an incomplete model of the future full featured system, which can be used to let the users have a first idea of the completed program or allow the clients to evaluate the program.

Advantages:

i) The designer and implementer can obtain feedback from the users early in the project development.

ii) The client and the contractor can compare that the developing system matches with the system specification, according to which the system is built.

iii) It also gives the engineer some idea about the accuracy of initial project estimates and whether the deadlines can be successfully met.

The process of prototyping involves the following steps :

i) Identify basic requirements.

ii) Develop initial prototype.

iii) Review: The customers, including end users, examine the prototype and provide feedback for additions or changes.

iv) Revise and Enhance the Prototype: Using the feedback both the specifications and the prototype can be improved.

Contemporary approaches to MIS

        When an information system is being developed, much importance should be given to the structure of the organization, culture of the organization, etc. But along with these, especial attention should also be given to the technical side of MIS. The various contemporary approaches to MIS development can be summarized as

1. The Technical Approach

a) Based on the mathematical and the normative models.

b) Physical technology forms the back bone of such an approach.

c) Such an approach mainly finds much needed contributions from the disciplines like computer science, management science, operations research etc.

2. The Behavioral Approach

a) Based on the impact of the behavior and also on the response of the people in the organization.

b) Motivational Feasibility forms a very important and demanding part of such an approach towards MIS development.

3. The Socio Technical Approach

a) In the beginning, this approach was finding it hard to survive – but now it is being accepted worldwide and is also being implemented at a very large scale.

b) Involves key involvement of both of the above explained approaches.

c) Improves the performance of the information system as a whole.