BBA - V Management Information System (Paper Code:307) U I!

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"#" Introd$%tion to MIS
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization or effort for the purpose of accomplishing a goal 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 MI , means the processed data that helps the management in planning, controlling and operations. !ata means all the facts arising out of the operations of the concern. !ata is processed i.e. recorded, summarized, compared and finally presented to the management in the form of MI report. System: !ata is processed into information with the help of a system. " system is made up of inputs, processing, output and feedbac# or control.

"#& MIS-'efinition
MI $Management Information ystems% is a general term for the computer systems in an enterprise that provide information about its business operations. It&s also used to refer to the people who manage these systems. Typically, in a large corporation, 'MI ' or the 'MI !epartment' refers to a central or centrally(coordinated system of computer e)pertise and management. MI is a formalized computer information system which can integrate data from various sources to provide the information necessary for decision(ma#ing at the management level. "n organized assembly of resources and procedures re*uired to collect, process and distribute data for use in decision(ma#ing In order to provide past, present and future information, an MI can include software that helps in decision(ma#ing, data resources such as databases, the hardware resources of a
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system, decision support systems, people management and project management applications and any computerized processes that enable the department to run efficiently.

"#3 ($n%tions of management

The most widely accepted are functions of management given by +,,-T. and ,/!,--01 i.e. P)anning, *rgani+ing, Staffing, 'ire%ting and Contro))ing. These functions have been discussed below: 1. Planning It is the basic function of management. It deals with chal#ing out a future course of action 2 deciding in advance the most appropriate course of actions for achievement of pre( determined goals. "ccording to +,,-T., 34lanning is deciding in advance ( what to do, when to do 2 how to do. It bridges the gap from where we are 2 where we want to be5. " plan is a future course of actions. It is an e)ercise in problem solving 2 decision ma#ing. 4lanning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thin#ing about ways 2 means for accomplishment of pre( determined goals. 4lanning is necessary to ensure proper utilization of human 2 non( human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, ris#s, wastages etc. 2. Organizing It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. "ccording to 6enry 7ayol, 3To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel/s5. To organize a business involves determining 2 providing human and non(human resources to the organizational structure. ,rganizing as a process involves:

Identification of activities. 8lassification of grouping of activities. "ssignment of duties. !elegation of authority and creation of responsibility. 8oordinating authority and responsibility relationships.

3. Staffing It is the function of manning the organization structure and #eeping it manned. taffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, comple)ity of human behaviour etc. The main purpose o staffing is to put right man on right job i.e. s*uare pegs in s*uare holes and round pegs in round holes. "ccording to +ootz 2 ,/!onell, 3Managerial function of staffing involves manning the organization structure through proper and effective selection; appraisal 2 development of personnel to fill the roles designed un the structure5. taffing involves:

Manpower 4lanning $estimating man power in terms of searching, choose the person and giving the right place%. 9ecruitment, selection 2 placement. Training 2 development. 9emuneration. 4erformance appraisal. 4romotions 2 transfer.

4. Directing It is that part of managerial function which actuates the organizational methods to wor# efficiently for achievement of organizational purposes. It is considered life(spar# of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the wor#. !irection is that inert(personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub(ordinate for the achievement of organizational goals. !irection has following elements:

upervision Motivation 1eadership 8ommunication

S$per,ision- implies overseeing the wor# of subordinates by their superiors. It is the act of watching 2 directing wor# 2 wor#ers.

Moti,ation- means inspiring, stimulating or encouraging the sub(ordinates with zeal to wor#. 4ositive, negative, monetary, non(monetary incentives may be used for this purpose. -eaders.ip- may be defined as a process by which manager guides and influences the wor# of subordinates in desired direction. Comm$ni%ations- is the process of passing information, e)perience, opinion etc from one person to another. It is a bridge of understanding. 5. Controlling It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. "n efficient system of control helps to predict deviations before they actually occur. "ccording to +oontz 2 ,/!onell 38ontrolling is the measurement 2 correction of performance activities of subordinates in order to ma#e sure that the enterprise objectives and plans desired to obtain them as being accomplished5. Therefore controlling has following steps: a.
. . .

0stablishment of standard performance. Measurement of actual performance. 8omparison of actual performance with the standards and finding out deviation if any. 8orrective action

"#/ MIS ($n%tions

MI is set up by an organization with the prime objective to obtain management information to :0 used by its managers in decision ma#ing. Thus, MI must perform the following functions in order to meet its objectives.

'ata Capt$ring: MI captures data from various internal and e)ternal sources of an organization. !ata capturing may :0 manual or through computer terminals. 0nd users typically, record data about transactions on some physical medium, such as a paper form, or enter it directly into a computer system. Pro%essing of 'ata: The captured data is processed to convert it into the re*uired management information. 4rocessing of data is done by such activities as calculating, comparing, sorting, classifying and summarizing. These activities organize, analyze, and manipulate data using various statistical, mathematical, operations research and other business models.
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Storage of Information: MI stores processed or unprocessed data for future use. If any information is not immediately re*uired, it is saved as an organizational record. In this activity, data and information are retained in an organized manner for later use. tored data is commonly organized into fields, records, files and databases. 0etrie,a) of Information: MI retrieves information fro its stores as and when re*uired by various users. "s per the re*uirements of management users, the retrieved information is either disseminated as such or it is processed again to meet the e)act MI demands. 'issemination of MI: Management Information, which is a finished product of MI , is disseminated to the users in the organization

"#1 C.ara%teristi%s of MIS

;. Management oriented: The system is designed form the top to wor# downwards. It does not mean that the system is designed to provide information directly to the top management. ,ther levels of management are also provided with relevant information. <. Management dire%ted: Management orientation of MI , it is necessary that management should continuously ma#e reviews. 7or e)ample, in the mar#eting information system, the management must determine what sales information is necessary to improve its control over mar#eti=ng operations. >. Integrated: The word &integration& means that system has to cover of all the functional areas of an organization so as to produce more meaningful management information, with a view to achieving the objectives of the organization. It has to consider various sub( ystems, their objectives, information needs, and recognize the independence, that these sub(systems have amongst themselves, so that common areas of information are identified and processed without repetition and overlapping. 7or e)ample, in the development of an effective production scheduling system, a proper balance amongst the following factors is desired: i. et up costs ii. ,vertime iii. Manpower iv. 4roduction capacity v. Inventory level vi. Money available vii. 8ustomer service.
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/# Common data f)o2s: The integration concept of MI , common data flow concept avoids repetition and overlapping in data collection and storage, combining similar functions, and simplifying operations wherever possible. 7or e)ample, in the mar#eting operations, orders received for goods become the basis billing of goods ordered, setting up of the accounts receivable, initiating production activity, sales analysis and forecasting etc. 1# ()e3i4i)ity and ease of $se: ?hile building an MI system all types of possible means, which may occur in future, are added to ma#e it fle)ible. " feature that often goes with fle)ibility is the ease of use. The MI should be able to incorporate all those features that ma#e it readily accessible to wide range of users with easy usability. 5# S$4 System %on%ept: ?hen a problem is seen in sub parts, then the better solution to the problem is possible. "lthough MI is viewed as a single entity but for its effectiveuse, it should be bro#en down in small parts or subsystems so that more attention and insight is paid to each sub system. 4riorities will be set and phase of implementation will be made easy. ?hile ma#ing or brea#ing down the whole MI into subsystems, it should be #ept in mind that the subsystems should be easily manageable. 7# Compre.ensi,e: MI is comprehensive in nature. It includes transaction processing systems as well as information processing systems decisioned primarily for decision ma#ing and control at all levels of organization. It also embraces other subsystems of the organization such as formal and informal subsystems, manual and computer subsystems, office information systems, decision support systems, etc. 6# Coordinated: It is a coordinated system. It is centrally coordinated to ensure that data gathering, processing, office automation, intelligence and decision support systems and other components of MI are developed and operated in a planned and coordinated way; information is passed bac# and forth among various subsystems as needed and the whole I operates efficiently so that the system becomes cost effective. 7# (eed4a%8: MI should provide feedbac# about its own efficiency and effectiveness. In determining MI efficiency and effectiveness, two aspects are ta#en into account @ costAbenefit and supply of relevant and timely information. "0# 93%eption Based: There should be e)ception reporting to decision ma#er at the re*uired level i.e. e)ception based reporting in abnormal situation, i.e. the ma)imum, minimum or e)pected values vary beyond tolerance limits. ""# ($t$re oriented: MI should not merely provide past or historical information rather it should provide information on the basis of projections based on which actions may be initiated.

"#5 -e,e)s of Management

Most organizations have three management levels: low(level, middle(level, and top(level managers. These managers are classified in a hierarchy of authority, and perform different tas#s. In many organizations, the number of managers in every level resembles a pyramid. 0ach level is e)plained below in specifications of their different responsibilities and li#ely job titles. !op-)e,e) managers 8onsists of board of directors, president, vice(president, 80,s, etc. They are responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, company policies, and ma#e decisions on the direction of the business. In addition, top(level managers play a significant role in the mobilization of outside resources and are accountable to the shareholders and general public. The role of the top management can be summarized as follows ( a. Top management lays down the objectives and broad policies of the enterprise. b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc. c. It prepares strategic plans 2 policies for the enterprise. d. It appoints the e)ecutive for middle level i.e. departmental managers. e. It controls 2 coordinates the activities of all the departments. f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction. Midd)e-)e,e) managers 8onsist of general managers, branch managers and department managers. They are accountable to the top management for their department&s function. They devote more time to organizational and directional functions. Their roles can be emphasized as e)ecuting organizational plans in conformance with the company&s policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance. ome of their functions are as follows: Their role can be emphasized as ( a. They e)ecute the plans of the organization in accordance with the policies and directives of the top management. b. They ma#e plans for the sub(units of the organization. c. They participate in employment 2 training of lower level management.
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d. They interpret and e)plain policies from top level management to lower level. e. They are responsible for coordinating the activities within the division or department. f. It also sends important reports and other important data to top level management. g. They evaluate performance of junior managers. h. They are also responsible for inspiring lower level managers towards better performance. i. !esigning and implementing effective group and intergroup wor# and information systems. j. !efining and monitoring group(level performance indicators. #. !iagnosing and resolving problems within and among wor# groups.

-o2-)e,e) managers 8onsist of supervisors, section leads, foremen, etc. They focus on controlling and directing. They usually have the responsibility of assigning employees tas#s, guiding and supervising employees on day(to(day activities, ensuring *uality and *uantity production, ma#ing recommendations, suggestions, and upchanneling employee problems, etc. 7irst(level managers are role models for employees that provide:

:asic supervision. Motivation. 8areer planning. 4erformance feedbac#.

"#7 0o)e of MIS

MI plays very vital role in the management, administration and operation of the organization. The system ensures that an appropriate data is collected from various sources, processed and sent further wherever and whenever re*uired. 7ulfill the information needs of an individual and top management "t every phase of the management process, managers constantly need information in order to ma#e effective decisions and this information is provided by MI . MI is re*uired by managers as they ma#e their decisions, such as number of staff re*uired to be employed by each department, their training re*uirements, career development plans, budgets, overall forecasts, surveys, and progress reports on socio economic conditions Timely and "ccurate Transaction 4rocessing. treamlining "ccounting and 9ecords Management.

4roviding Managers with ad hoc and interactive support in decision(ma#ing. 4rovision of an easy and systematic way in digging out critical information tailored according to specific re*uirements, and customized in preferred formats.
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 0nables an organization to gain competitive advantage over others :etter communication, inter(organizational computing, and internet(wor#ing. business operations and successful management of business enterprises. :etter use of e)ecutive resources by automating routine functions. Increased ability to ma#e sound, rational and informed decisions involving comple) combinations of factors, and doing so with more confidence and speed. :etter use of time by ma#ing facilities available every time they are re*uired. Improved customer services and improved personnel relations within the organization upports

"#6 Impa%t of MIS

ince the MI plays a very important role in the organization, it creates an impact on the organizations functions, performance and productivity. The impact of MI on the functions is in its management. ?ith a good support, the management of mar#ing, finance, production and personnel become more efficient. The trac#ing and monitoring of the functional targets becomes easy. The functional, managers are informed about the progress, achievements and shortfalls in the probable trends in the various aspects of business. This helps in forecasting and long( term perspective planning. The manager/s attention is brought to a situation which is e)ceptional in nature, inducing him to ta#e an action or a decision in the matter. " disciplined information reporting system creates a structured data and a #nowledge base for all the people in the organization. The information is available in such a form that it can be used straight away or by blending analysis, saving the manager/s valuable time. The MI calls for a systemization of the business operation for an affective system design. " well designed system with a focus on the manger ma#es an impact on the managerial efficiency. It helps him to resort to such e)ercises as e)perimentation and modeling. The use of computers enables him to use the tools techni*ues which are impossible to use manually. The ready(made pac#ages ma#e this tas# simpler. The impact is on the managerial ability to perform. It improves the decision ma#ing ability considerably. ince the MI wor#s on the basic systems such as transaction processing and databases, the drudgery of the clerical wor# is transferred to the computerized system, relieving the human mind for better wor#. MI creates, an impa%t on the organization/s function, performance and productivity. ?ith MI support management of all departments of an organization can become more effective

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 Targets trac#ing and monitoring becomes easy. Top level managers can be informed accordingly. 4robable trends in various aspects of business can be traced. This helps in long(term planning and forecasting. 0)ception conditions can be brought to the noticed, so that manages can ta#e decision in that matter. Information reporting system helps entire organization. MI brings clarity in the communication, due to common understanding of terms and terminology. :rings high degree of professionalism in the business operations 6elps him to use different tools and techni*ues, which are impossible to use manually. !ecision(ma#ing ability is improved

"#7 eed for MIS

8omple)ity of business organization is lin#ed with heterogeneity and range of activities which are relevant for the organization. Thu, the more is the heterogeneity, the more will be the comple)ity because of environmental pressure, and this comple)ity can/t be all together avoided but has to be managed effectively. MI tries to manage this comple)ity by providing the information in the following areas: ;. 'e%ision ma8ing( It is a process by which an individual or an organization selects a position or action from several possible alternatives. This process involves identification of problem, identification of various alternatives, evaluation of these alternatives and choice of the best alternative which can solve the problem. "t each stage of the decision ma#ing process relevant information is re*uired. ince decisions made by different managers may differ so do their information re*uirements. Therefore, MI should provide all the re*uired information that can help the managers of all levels in decision ma#ing. <. Strategi% p)anning( It is the process of deciding the objectives of the organization, deciding the resources available, allocated and used to attain these objectives and so on. In the present business environment only those organization will be successful which are engaged in effective strategic planning. Mostly strategic plans are prepared in the conte)t of environmental variables such as outloo# towards the economy of the organization, current and prospective political and
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legal issues, competitors capacity etc. :esides this, internal information about of organization own capabilities e)isting strategies, resource availability and constraints are also needed. >. Management %ontro)( It refers to the tas# of ensuring that activities are producing the desired results. This involves measurement of actual performance with the desired performance, comparision between two, identification of deviation, analysis of causes of deviation and ta#ing the corrective actions to overcome those deviations, therefore, every manger in the organization must have ade*uate information about the performance, standards and how the employees are contributing towards achievement of organization objectives. B. *perations p)anning and %ontro)( It is the process of deciding the most effective use of resources already allocated and available for development of a control mechanism to ensure the effective implementation of the organization objectives. ,n the other hand, operation control is concerned with the action performed or performance achieved and evaluates the performance at the operational level. This helps in ta#ing corrective actions to control any deviations at the operational level.

"#"0 Management 4y 93%eption

4areto.s principle of C=:<= applications to the management of enterprise. everal terms have been coined on this principle such as management by objectives; management methodology is the management 4y e3%eption. ?hen the management operates under time constraint, each manager has to him to attend to the situation where his attention is necessary. uch attention would lead to an action, a decision or a wait(and( see approach. If all the situations are considered in a routine manner, it consumes time and tends to be neglected over a period of time. "n efficient manager tries for selective attention to manage within the available time resource. The principle evolved, therefore, is of the management by e)ception. The e)ception is decided the impact a situation would ma#e on the performance, the process and the standards set in the management control system. The e)ception is defined as a significant deviation from the performance, or the process and the standard. The deviation could be abnormal on a positive or on a negative side of the standard. The deviation could be predictive or could be arising out of random causes in the business operations. IT is, therefore, necessary to assess whether the deviation is sporadic or consistently coming in, calling for managerial attention. The manager is interested in #nowing the significant deviation by the yardstic#s of consistency and not out of random causes. The significant deviations are e)ceptional in nature and re*uire to be attended to immediately. " manager is further interested in #nowing the reasons behind the e)ceptional nature of the situation. It is possible to trace the reasons of deviation, and it is possible to ta#e a corrective action. The significant deviation can occur on account of wrong performance standards and wrong management process. Many times standards are set very low and they need to be loo#ed in to avoid the misuse of resources. If the standards are set too high, then the people fail to achieve them on account of de motivating factor of the high standards.
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" wrong management process refers to a variety of decisions a manager has ta#en in the planning, organization, staffing, directing and controlling a given management tas#. These decisions relate to the choice and the allocation of resources, the methods of using resources, the application of the tools and the techni*ues, the use of manpower by way of staffing and the manner in which the efforts are coordinated in the organization. 7or an efficient and an effective management, without loss of time, it is, therefore, necessary to report the significant deviations to the right person in the organization. In this regard a manager himself has to provide the conditions of e)ceptions in the control system so that they are highlighted and informed. The management by e)ception commands grip on the management process. The managerial effort gets directed towards the goal with the purpose of achievement.

"#"" MIS Ar%.ite%t$re

MI are federation of different information systems with each system providing information relevant to a specific "rea which may be identified on the basis of relevant to a specific area which may be identified on the basis of management levels(top, middle, and lower, organizational functions(production, mar#eting, finance, and personnel, or functions of information systems(data processing, operational planning and control, and strategic planning. Darious information systems and their integration determine the MI architecture. Thus, MI architecture, also #nown as structure, represents a broad framewor# within which individual information systems fit. ?hen these individual information systems are described within the conte)t of MI , they can be treated as subsystems .In designing MI architecture; two issues are involved(identifying subsystems and interconnecting these subsystems.

Identifying s$4systems
ubsystems, as described earlier, are components of a system. The use of subsystem as building bloc#s is basic to the analysis and the development of the system. " comple) system is too difficult to comprehend when considered as a whole. Therefore, the system is decomposed or divided into subsystems. ubsystems of MI can be identified on following bases: ;. 1evels of management. <. Management functions. >. ,rganizational functions. B. MI support facilities.

-e,e)s of Management. In an organization, people are arranged in a hierarchy creating different levels. Managerial personnel may be arranged into top, middle, and lower levels. Though
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managers at all these levels perform all managerial functions, the nature of their functions differs considerably. Therefore, their information re*uirements differ considerably and only specific information systems are relevant to managers at each level.

Management f$n%tions# Management functions are those activities and processes that are performed by different managers. Though the classical model of management functions classifies these into planning, organizing, staffing, directing, and controlling, to put proper emphasis on functions performed by different by different level managers, these functions may be classified as strategic planning, management control, and operational planning and control.

*rgani+ationa) ($n%tions# ubsystems of an organization as a system can be identified on the basis of functions that the organization is re*uired to perform in order to achieve its objectives. !epending on the nature of organizations, there may be different types of functions. 6owever, in the case of a business organization, these functions can be grouped into four broad categories( production, mar#eting, finance, and personnel. 7or e)ample, production into manufacturing, inventory controls, *uality control, plant maintenance, research and development etc. uch a classification can go on till we arrive at the level of operatives involved in a particular broad function. MIS S$pport (a%i)ities# In order to perform various functions, MI need support facilities. 7or e)ample, in computer(based information systems, we need computer hardware, computer software, databases, and MI professionals. "ll these subsystems of MI support facilities perform different functions.

Inter%onne%ting systems
7or a system to be effective, it is not just enough that it has various subsystems but it is essential that these subsystems are arranged in a proper way and inter connections are provided among them. Interconnections among various subsystems are re*uired to achieve coordination and integration among these subsystems so that each subsystem contributes positively to other subsystems. :ecause of this positive contribution of each subsystem, the system generates synergy, a phenomenon in which the total contribution of the system is more than the total of contribution made by all subsystems had they not been coordinated. In interconnecting various subsystems, two aspects must be ta#en into consideration( differentiation and integration. !ifferentiation refers to differences in specific feature of a
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subsystem that differentiate a subsystem from other subsystem so that after interconnecting it with others, it can be identified. Integration refers to the *uality of state of e*uilibrium among various subsystems that is re*uired to achieve unity of effort by the system. There may be various methods which can be used to interconnect various information subsystems for e)ample, common database for all information systems in an organisation. :ased on the identification of various subsystems, MI architecture can be designed as shown.
Management levels Management functions Information systems

Overall management
0)ecutive support

Top

trategic planning Management control

Organisational Functions

systems

Production

planning and 8ontrol 1ower

Finance

Middle

,perational

Personnel

Marketing

!ecision support systems

0)pert systems

M ! su""ort #acilities

tructured information ystems

$ard%are !o#t%are &ata'ase M ! Pro#essionals

MI architecture
Transaction processing ystems

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Eenerally, the MI architecture is designed from bottom to top in which MI support facilities provide base for developing various information systems through the creation of transaction processing systems for various organisational functions. 7or each of these functions, information systems are designed for planning and control at lower and middle management. ?hile at lower level, transaction processing and structured information systems are more relevant, at middle management, structured information systems are supplemented by e)pert systems $in some areas% and decision support systems. "t the top level, overall management functions are performed which are mostly in the form of strategic planning and management control for which e)ecutive support systems and summary of control reports generated by structured information systems are re*uired.

"#"& MIS and ot.er dis%ip)ines

8oncept of MI is interdisciplinary in nature i.e it has borrowed its concepts from a large number of disciplines li#e accounting, computer sciences, management, operation research, behavioural sciences etc. :ecause of its interdisciplinary in nature, MI is neither termed as a pure science nor an art, rather it is considered as a combination of both and information system. Many of the ideas which form the part of MI are found in other academic disciplines. These disciplines are Management accounting Management and organisation theory ,peration research 8omputer sciences

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Management A%%o$nting "ccounting is broadly classified into two parts: a% Financial accounting: 7inancial accounting is concerned with measurement of income for specific periods of time and reporting of financial positions at the end of the period. Its reports are more oriented towards investors. "s a result, it has limited usefulness for managerial decision ma#ing. b% Management accounting: Management accounting includes the methods and concepts necessary for effective planning, choosing among alternative business actions and control through evaluation and interpretation of performances. Thus, management accounting provides inputs for decision ma#ing in the areas of planning and control. The MI concept includes much of management accounting; however, the support systems which provide users with access to data and models are beyond the scope of traditional management accounting. 8ontemporary organisational practices are to retain the cost and budget analysis within the management accounting function and to have the MI function provides data and model support.

Management and *rganisation !.eory MI is a support system for effective organisational functioning. Therefore, it draws heavily from management and organisation theory. The fields of management and organisation theory provide several concepts which are #ey to understanding of the function of a MI in an orgainsation. ome of the major concepts are behavioural theory of organisational and individual decision ma#ing, group processes and group decision ma#ing, individual motivation and leadership processes, organisational change process and organisation structure design. The #nowledge of these concepts helps the designer of MI to ascertain the types of decisions made at different levels of an organisation and to align the MI to provide relevant information for ma#ing these decisions.

*perations 0esear%. ,perations research is applied decision theory where the managers see# rationality while dealing with problems through the use of scientific, logical or mathematical means. In operation research, various elements of a problem on which decision is to be made are e)pressed in
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numerical forms, the relationship among these elements are established and the decision is made on the basis of analysis of these relationships. ,peration research is *uite relevant to MI because it has developed procedures for the analysis and computer based solutions of many types of decision problems. The systematic approach to problem solving, use of models, and computer based solutions are generally incorporated in the decision support system concept of MI .

Comp$ter S%ien%e 8omputer science deals with hardware and software of computer systems. The #nowledge of computer science has enabled speedy information storage, processing and retrieval. 8omputer science is important for MI because it covers topics such as algorithms, computation, software and data structures. 6owever, modern MI is not merely an e)tension of computer science but the emphasis in MI is on the applications of the technical capabilities that computer science has made available.

If we loo# at various academic disciplines contributing to the development of MI as a separate field of study, we find that MI is an e)tension of management and organisation theory because the fundamental processes of MI are more related to organisational processes and effectiveness. Therefore, MI is also treated as a subsystem of management system. ,ther academic disciplines help in designing and operating MI .

"#"3 S$4-systems of MIS

Management Information ystems $MI %, referred to as Information Management and ystems, is the discipline covering the application of people, technologies, and procedures collectively called information systems, to solving business problems. 'MIS' is a planned system of collecting, storing and disseminating data in the form of information needed to carry out the functions of management. The system approach applies e*ually to management information system as well. The management information system receives input from various internal and e)ternal sources. These inputs are processes through the MI to produce the desired output, which may be in turn used for different managerial tas# within the organization. MI has several subsystems which are interdependent, interrelated and interacting. !.e S$4-Systems 2it.in t.e MIS are:
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 Comp$ter System: The computer system as a subsystem of MI includes the 6ardware, the operating system and the software. Management: The management system as a subsystem of MI includes the managerial tas# relating to the effective functioning. It includes planning, control and co(ordination, human resource development etc. System 9ngineering: The system engineering subsystem of MI includes system design and development as well as system maintenance. The synergistic combination of hardware and system engineering is evolved into software engineering. oftware engineering as defined by 7ritz :aucer, as the establishment and use of engineering principals in order to obtain economically feasible software that is reliable and wor#s efficiently on real machines. App)i%ation: The application subsystem of MI includes various application systems, which are developed and implemented to the desire outputs. This process of integration of business system with management information system involves three #ey elements. They are: !e%.no)ogy: Technology provides the bridge between the business systems, their information needs on one side, the means of providing these information needs on the other. Technology provides the tools and techni*ues that help to generate the information that are re*uired for the business system. election of the appropriate technology has got bearing on effectiveness of the bridge. Peop)e: 4eople generate the re*uired information and apply the same for business planning, control and decision ma#ing. The attitude and aspiration of the people involved in generating and utilizing the information has a bearing on effective use of integrated system. B$siness: The business function and the environment in which the business organization have an impact on the entire integration e)ercise. It is an information system, which collects data from internal and e)ternal resources of an organization and processes that data to fulfill the needs of all the levels of management. 7rom other point of view there are four types of subsystems: !ransa%tion Pro%essing System (!PS)
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These systems are used to record day(to(day transaction of an organization. These are very low( level information system. ales processing system is a transaction system. Management Information System (MIS) M9 is the natural e)tinction to the transaction processing system. These systems get data from T4 and create reports according the names of different levels of management. 'e%ision S$pport System ('SS) ! also get data from T4 and used it to help decision ma#ers in ma#ing their decision. These systems are just to help decision ma#er and these system cannot ma#e decision ma#er. *ffi%e S$pport System (*SS) These are information system, which provide support in office wor# li#e ward processor, spread sheet etc. These information systems also provide facilities of communication of information.

"#"/ Mis%on%eptions or Myt.s a4o$t Management Information System

The concept of management information systems is not clearly understood by many developers $viz. programmers and systems analysts% as well as end users, namely, managers, of these very systems. There are many misconceptions about a management information system. These are the following:

"ny computer(based information system is an MI . "ny reposting system is an MI . MI is a philosophy and not any specific entity. MI is a management techni*ue MI is a bunch of technologies. MI is an implementation of organizational systems and procedures. MI is a course on file structures.

tudy of MI is about the use of computers.

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More data in reports means more information for management. "ccuracy in reports is of vital importance.

"ny computer based information system is an MI , to many who are not very familiar with computers and management. Many people who are new to computers, thought of computed generated reports as accurate and mare credible than handwritten or typed reports. This is possibly because to the assumption that computer being fast and accurate machine, the report generated by it also must provide reliable information. Fet, there are still some instances wherein, inaccurate information and wrong reports are produced, we can clearly state that computer generated information are not always reliable and accurate. Management information system is a philosophy as well. 4hilosophy as defined by ?i#ipedia, 3is the study of general and fundamental problems concerning matters such as e)istence, #nowledge, values, reason, mind, and language. It is distinguished from other ways of addressing fundamental *uestions by its critical, generally systematic approach and its reliance on rational argument5. ince, MI involves decision ma#ing, and thus critical thin#ing is needed in ma#ing decisions and these must be supported by accurate data, information system should, help management in decision ma#ing. -ot all the computer generated information is useful to management. Thus, MI is a philosophy which is far deeper and comple) than the mundane processing of large amounts of corporate data by computers. The e)ceptional decline prices of modern computers and communication devices have made information systems *uite feasible, thus enabling them to play a significant role in the world today. 7urther development in new generation technologies, has to evolve to e)ploit the emerging technologies. The very fact that technology innovations are fast increasing, and new devices and software #eeps on developing, managers are having a hard time coping with these fast changes. Fet, the benefits by this continuous development cannot be ignored. The traditional e)perts on ,rganization and Methods find information systems highly useful in formalizing and implementing the organization(wide systems and procedures. In the past, activities such as collecting, organizing, codifying and continuous monitoring of systems and procedures, which are consistent across an organization, remained un attainable goals due to the enormous amount of manual effort needed for such implementation. Management information systems, than#s to the speed of computers and their ability to process large volumes of data distributed across the organization, provide a way to implement organization(wide systems and procedures.
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The very size of data spread across the organization necessitates the use of file structures to capture, store, and process the data to provide useful information. !esign and development of such file processing systems and database management ystem re*uires a formal study of such techni*ues as an academic discipline. To many students of 8omputer cience and Management, MI is merely a course on file structures and a discipline that is far less demanding intellectually, since such a course involves very little of abstract mathematics as compared to a course on algorithms or discrete Mathematics. ?hile it is necessary to understand what MI is, it is e*ually important to understand what MI is not.

"#"1 S$%%ess and (ai)$re of MIS:

Most organizations use MI more successfully than other organizations. Throughhardware,

software and technology available are the latest and the best; its use is morefor the collection and storage of data and its elementary processing. There are some factors, which ma#e MI , a success while there are some factors, which ma#e it a failure. (a%tors %ontri4$ting to s$%%ess of MIS If MI is to be a success, then it should have all the features listed below : ;. MI is integrated into the management function. It sets clear objectives to ensure that MI focuses on the major issues of the business. "lso ade*uate development resources are provided and human 2 organizational barriers to progress are removed. <. "n appropriate information processing technology re*uired to meet the data processing and analysis needs of the users of MI is selected. >. MI is oriented, defined and designed in terms of the users re*uirements and its operational viability is ensured. B. MI is #ept under continuous surveillance, so that its open system is modified according to the changing information needs. G. MI focuses on results and goals, and highlights the factors and reasons for no achievements. H. MI is not allowed to end up into an information generation mill avoiding the noise in the information and the communication system.
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I. MI recognizes that a manager is a human being and therefore, the systems must consider all the human behavioral aspects in the process of management. C. MI recognizes that the different information needs for different objectives must be met with. The globalization of information in isolation from the different objectives leads to too much information and its non use. J. MI is easy to operate and therefore, the design of MI has such good features which ma#e up a user friendly design. ;=. MI recognizes that the information needs become obsolete and new needs emerge. The MI design, therefore, has a potential capability to *uic#ly meet newer and newer needs of information. ;;. MI concentrates on developing the information support to manage critical success factors. It concentrates on the mission critical applications serving the needs of the top management.

(a%tors %ontri4$ting to fai)$res

Many times, MI is a failure. The common factors which are responsible for this are as follows: ;. MI is conceived as a data processing and not as an information system. <. MI does not provide that information which is needed by managers but it tends to provide the information generally the function calls for. MI then becomes an impersonal function. >. Knderestimating the comple)ity in the business systems and not recognizing it in the MI design leads to problems in the successful implementation. B. "de*uate attention is not given to the *uality control aspects of the inputs, the process and the outputs leading to insufficient chec#s and controls in MI . G. MI is developed without streamlining the transaction processing systems in the organizations. H. 1ac# of training and appreciation that the users of the information and the generators of the data are different, and they have to play an important role in the MI . I. MI does not meet certain critical and #ey factors of its users, such as a response to the *uery on the database, an inability to get the processing done in a particular manner, lac# of user friendly system and the dependence on the system personnel.
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C. " belief that the computerized MI can solve all the management problems of planning and control of the business. J. 1ac# of administrative discipline in following the standardized systems and procedures, wrong coding and deviating from the system specifications result in incomplete and incorrect information. ;=. MI does not give perfect information to all the users in the organization. "ny attempt towards such a goal will be unsuccessful because every user has a human ingenuity, bias and certain assumptions not #nown to the designer. MI cannot ma#eup these by providing perfect information.

"#"5 !ransa%tion Pro%essing System

" transa%tion pro%essing system is a type of information system. T4 s collect, store, modify, and retrieve the transactions of an organization. " transaction is an event that generates or modifies data that is eventually stored in an information system. Transaction processing system #eeps on organization running smoothly by automating the processing of the large amount of paper wor# that must be handled daily. These systems include the accurate recording of transactions as well as the control procedures used in issuing such documents as pay chec#s, invoices, customer statements, etc. 7or e)ample, the transaction processing system of a departmental store can record customer purchases, prepare billing and boo#ing of order from suppliers and inter(relate these tas#s into an overall accounting system. The transaction processing system of a college helps performing such tas#s as enrolling students in courses, billing students for tuition, and issuing pay che*ue . The main purpose of this system is to allow the businesses that are using it be able to #eep trac# of all of the business transactions that they have made in a manner that is both reliable and effective, despite whether their business is online or offline. Typical e)amples of such systems would be "irline 9eservation ystems, :an#ing ystems, or the "ccounting ystem of almost any large company. Transaction processing systems were among the earliest computerized systems. Their primary purpose is to record, process, validate, and store transactions that ta#e place in the various functional areasAof a business for future retrieval and use. " transaction processing system $T4 % is an information system that records company transactions $a transaction is defined as an e)change between two or more business entities%. LTransaction processing systems $T4 % are cross(functional information systems that process data resulting from the occurrence of business transactions.
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LTransactions are events that occur as part of doing business, such as sales, purchases, deposits, withdrawals, refunds, and payments. Transaction processing activities are needed to capture and process data, or the operations of a business would grind to a halt.

!ypes of !ransa%tions ?hen a department orders office supplies from the purchasing department, an internal transaction occurs, when a customer places an order for a product, an e)ternal transaction occurs. Interna) !ransa%tions: Those transactions, which are internal to the company and are related with the internal wor#ing of any organization. 7or e)ample 9ecruitment 4olicy, 4romotion 4olicy, 4roduction policy etc 93terna) !ransa%tions: Those transactions, which are e)ternal to the organization and are related with the e)ternal sources, are regarded as 0)ternal Transaction. 7or e)ample sales, purchase etc. C.ara%teristi%s of !ransa%tion Pro%essing Systems ;. " T4 records internal and e)ternal transactions for a company. It is a repository of data that is fre*uently accessed by other systems <. " T4 performs routine, repetitive tas#s. It is mostly used by lower(level managers to ma#e operational decisions >. Transactions can be recorded in batch mode or online. In batch mode, the files are updated periodically; in online mode, each transaction is recorded as it occurs. B. There are si) steps in processing a transaction. They are data entry, data validation, data processing and revalidation, storage, (output generation, and *uery support. (eat$res of !PS ;. " T4 supports different tas#s by imposing a set of rules and guidelines that specify how to record, process, and store a given transaction. There are many uses of transaction processing systems in our everyday lives, such as when we ma#e a purchase at retail store, deposit or withdraw money at a ban#, or register for classes at a university. "lmost all organizations, regardless of the industry in which they operate, have a manual or automated T4 <. " T4 is the data life(line for a company because it is the source of data for other information systems, such as MI and ! $!ecision upport ystems%. 6ence, if the T4 shuts down, the conse*uences can be serious for the organization >. " T4 is also the main lin# between the organization and e)ternal entities, such as customers suppliers, distributors, and regulatory agencies B. T4 e)ist for the various functional areas in an organization, such as finance, accounting, manufacturing, production, human resources, mar#eting *uality control, engineering, and research and development. Kntil a few years ago, many companies viewed the T4 for each business function as separate entity with little or no connection to other systems in the company. Today, however, many companies are trying to build cross(functional T4 to promote the free
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e)change of information among different business units. This is a desirable goal, but is still very difficult to achieve

"#"7 93e%$ti,e S$pport System

"n e3e%$ti,e information system $0I % is a type of management information system intended to facilitate and support the information and decision(ma#ing needs of senior e)ecutives by providing easy access to both internal and e)ternal information relevant to meeting the strategic goals of the organization. It is commonly considered as a specialized form of decision support system $! %. n 93e%$ti,e S$pport System (:9SS:) is designed to help senior management ma#e strategic decisions. It gathers analyses and summarizes the #ey internal and e)ternal information used in the business. 0)ecutive upport ystem $0 % is a reporting tool $software% that allows you to turn your organization&s data into useful summarized reports. These reports are generally used by e)ecutive level managers for *uic# access to reports coming from all company levels and departments such as billing, cost accounting, staffing, scheduling, and more. In addition to providing *uic# access to organized data from departments, some 0)ecutive upport ystem tools also provide analysis tools that predict a series of performance outcomes over time using the input data. This type of 0 is useful to e)ecutives as it provides possible outcomes and *uic# reference to statistics and numbers needed for decision(ma#ing. Ad,antages of 9IS

0asy for upper(level e)ecutives to use, e)tensive computer e)perience is not re*uired in operations 4rovides timely delivery of company summary information Information that is provided is better understood 7ilters data for management Improves trac#ing information ,ffers efficiency to decision ma#ers

'isad,antages of 9IS

ystem dependent 1imited functionality, by design Information overload for some managers :enefits hard to *uantify 6igh implementation costs
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ystem may become slow, large, and hard to manage -eed good internal processes for data management May lead to less reliable and less secure data

"#"6 'e%ision S$pport System

!ecision upport ystems $! % are a specific class of computerized information system that supports business and organizational decision ma#ing activities. " properly designed ! is an interactive software based system intended to help decision ma#ers compile useful information from raw data, documents, personal #nowledge, andAor business models to identify and solve problems and ma#e decisions ! is an application of 6ebert imon model, as discussed, the model has three phases :

i% Intelligence ii% !esign iii% 8hoice The ! basically helps in the information system in the intelligence phase where the objective is to identify the problem and then go to the design phase for solution. The choice of selection criteria varies from problem to problem. It is therefore, re*uired to go through these phases again and again till satisfactory solution is found. In the following three phase cycle, you may use in*uiry, analysis, and models and accounting system to come to rational solution. These systems are helpful where the decision ma#er calls for comple) manipulation of data and use of several methods to reach an acceptable solution using different analysis approach. The decision support system helps in ma#ing a decision and also in performance analysis. ! can be built around the rule in case of programmable decision situation. The rules are not fi)ed or predetermined and re*uires every time the user to go through the decision ma#ing cycle as indicated in 6erbert imon model. Attri4$tes: i% ! ii% ! should be adaptable and fle)ible. should be interactive and provide ease of use.

iii% 0ffectiveness balanced with efficiency $benefit must e)ceed cost%.

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iv% 8omplete control by decision(ma#ers. v% 0ase of development by $modification to suit needs and changing environment% end users. vi% upport modeling and analysis. vii% !ata access. 'SS C.ara%teristi%s : i% upport for decision ma#ers in semi structured and unstructured problems. ii% upport managers at all levels. iii% upport individuals and groups. iv% upport for interdependent or se*uential decisions. v% upport intelligence, design, choice, and implementation. vi% upport variety of decision processes and styles Benefits of 'SS ;. Improves personal efficiency <. peed up the process of decision ma#ing >. Increases organizational control B. 0ncourages e)ploration and discovery on the part of the decision ma#er G. peeds up problem solving in an organization

H. 7acilitates interpersonal communication I. 4romotes learning or training C. Eenerates new evidence in support of a decision J. 8reates a competitive advantage over competition ;=. 9eveals new approaches to thin#ing about the problem space ;;. 6elps automate managerial processes

"#"7 *ffi%e A$tomation System (*AS)

," could also be considered as computer(based information system that collects, process,
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store and transmit electronic message, document and other form of communication among individual, wor# group and organizations. ," can be accessed anywhere at any time, employees can trac# their e)penses right in the system. There is no need for employees to bac# trac# e)penses, fill out separate spreadsheets, etc. ,nce submitted, the manager receives instant notification, further reducing the time it ta#es to create and approve e)pense reports. ,ffice automation is the action of using varied e*uipment, machinery and software to store, manipulate and electronically capture or transfer data necessary for business. !ifferent office activities can be broadly grouped into following types of operations: 'o%$ment Capt$re: !ocuments originating from outside sources li#e incoming mails, notes, handouts, charts, graphs etc. need to be preserved. 0e%ording Uti)i+ation of 0eso$r%es: Includes record #eeping in respect to specific resources utilized by office personnel. 8alculations: Include the usual calculator functions li#e routine arithmetic operations for bill passing, interest calculations etc 'o%$ment Creation: 8onsists of preparation of documents, dictation, editing of te)ts etc. and ta#es up major part of the secretary&s time. 0e%eipts and 'istri4$tion: Includes distribution of correspondence to designated recipients. 7iling, earch, 9etrieval and 7ollow up: 9elated to filling, inde)ing, searching of documents, which ta#es up significant time. The application of computers to handle the office activities is also termed as offi%e a$tomation#

B9 9(I!S of *ffi%e A$tomation Systems : 8ommunication 2 accuracy of communication flows. 8ycle time between preparation of messages and receipt of messages at the recipients& end. 8osts of office communication in terms of time spent by e)ecutives, cost of communication lin#s is reduced

Categories of Comp$ter 4ased *ffi%e A$tomation System: !e3t Pro%essing Systems Most commonly used components of the ," ( office communication ta#es place in writing
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"utomate development of documents such as letters, reports, memos etc. They permit use of standard stored information to produce personalized documents ( 1 #eying effort ft errors May be simple word processing systems ,9 des#top publishing systems. The des#top publishing systems help in quick production of multiple copies of the document with quality printing. !es#top publishing systems are supported with printers, scanners etc.

9- 'o%$ment Management Systems Kseful in capturing information contained in documents, stored for future reference and communicate the relevant parts to the users as and when re*uired. ystems linked to ," . Kseful in internal communication. 7or e)ample, the loan application form filed in a branch of a ban# can be accessed by the sanctioning officer for scrutiny at the head office or any office for scrutiny of loan proposals. Kseful in remote access of documents that is almost impossible with manual systems 1ocation of e)ecutive becomes irrelevant for access to documents. Thus, these systems can be very useful in an office environment where traveling e ecutives share wor# space in the office.

9- Message Comm$ni%ation Systems :usiness enterprises use various communication systems for sending 2 receiving messages. These include telephone, mail and facsimile $7a)%, etc. ,ffer economy via( reduced time in sending or receiving the message, reliability of message and cost. >(:asic components of Message 8ommunication ystems$0(mail, 7a), Doice(mail% : $i% 9-MAI-: Darious features of electronic mail are stated below: ;. Integration with other Information systems: 0nsures accuracy and *uic# access <. ,nline development and editing: 0mail message can be developed and edited online before transmission. 0liminates need for use of less space needed. >. :roadcasting and 9erouting: ending message to many recipients simultaneously. 0.g. branch circular (M could be re(routedAforwarded withAwithout any change or attachment B. 0lectronic transmission: Transmission of messages ft confirmation of transmission with e(mail is electronic, *uic# and the reliable G. 0conomical: for both formal communication 2 informal communication within enterprise. H. 4ortability: 4hysical location of the recipient and sender irrelevant. "ccessed from anywhere (ii) (ACSIMI-9 ((A;) ;% 0(communication of images of documents over telephone lines. <% '8omputer based' fa) technology automates fa) communication and permits sharing of fa) facilities. It uses special software and fa) servers to send
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and receive fa) messages using common communication resources. These servers have the ability to receive fa) messages and automatically reroute them to the intended recipient after viewing it at the central computer. imilarly, the managers in an enterprise can leave the fa) messages to the server which will send it to the intended recipient automatically. (iii) V*IC9 MAI " variation of email in which messages are transmitted as digitized voice. 9ecipient of voice mail has to dial a voice mail service or access the e(mail bo) using the specified e*uipment and he can hear the spo#en message in the voice of the sender. The secured type of voice mail service may re*uire the recipient to enter identification code before the access is granted to the stored information. !e)e%onferen%ing and Video-%onferen%ing Systems 8onducing a business meeting involving more than two persons located at two or more different places. time 2 cost of meeting as the participants do not have to travel "udio or video conferencing with or without use of computer systems. 6owever, computer based teleconferencing has the advantage of fle)ibility in terms of pre(recorded presentations and integration with other information systems. :ased on 48, digital camera and visual communication software. The communication lin#s are still *uite e)pensive

"#&0 'ifferen%e 4et2een MIS < Comp$ter system

MIS

C*MPU!90 S=S!9M

Management information system refers to the 8omputer system is designed to formal system installed in an organization for process the data and give purposes of collecting, organizing, storing and information to the user. processing data and presenting useful information to management at various levels.

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:usinesses use management information systems to inform them on how to resource their companies and initiatives in the areas of people, technology and information li#e statistics.

8omputer system is an operating system that is programmed in various ways to allow for many different tas#s.

The main thrust is streamlining information useful The main focus of computer system to the Management is to facilitate processing of data with speed and accuracy. &Management Information ystem& does more than 8omputer system do not have such just an ordinary computer system does, it has a a specific tas# and do not supply different purpose which helps in decision ma#ing specific information for decision ma#ing MI wor#s with help of computer system. 8omputer system does not re*uire MI to operate its functions.

NManagement Information needed by management.

ystem/ is mainly N8omputer ystem/ need is not restricted to management alone.

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