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 To explain students why information systems are so important today for

business and management

 To evaluate the role of the major types of information systems in a business
environment and their relationship to each other
 To assess the impact of the internet, internet technology and electronic
commerce on business.
 To identify the major management challenges to building and using
information systems and learn how to find appropriate solutions to those
CHAPTER 1 - Foundation of management Information System

CHAPTER 2 - Development Process of Management Information System

CHAPTER 3 - Applications of Management Information System

CHAPTER 4 - Security & Ethics in MIS

CHAPTER 5 - Enterprise Resource Planning & Application

 Management Information System by Jawadekar – Tata
McGraw Hill
 Management Information System by C S V Murthy –
Himalaya Publishing House
 Enterprise Resource Planning by Alex Leon - Tata
McGraw Hill
 Enterprise Resource Planning by Ray - Tata McGraw Hill
 Basic Concepts  Management Information System (MIS)
 Data  System
 Information  Types ofInformation System
 Information Classification  MIS Planning
 Sources of Information  MIS Design And Development
 Value of Information  Components of MIS
 Information System
 Data refers to raw, unevaluated facts, figures, symbols, objects,
events, etc. Data may be a collection of facts lying in storage, like a
telephone directory or census records.
 "Information is data that has been processed into a form that is
meaningful to the recipient and is of real perceived value in current or
prospective decisions“.

In MIS a clear distinction is made between data and

information. Data is like raw materials while the
information is equivalent to the finished goods
produced after processing the raw material.
 Information Improves representation of an entity
 Updates the level of knowledge
 Has a surprise value
 Reduces uncertainty
 Aids in decision making
 The quality of information could be called good or bad depending on
the mix of these characteristics.



 Action vs no-action information - The information which induces
action is called action information. The information which
communicates only the status of a situation is no-action information.

 Internal Vs External Information - The information generated through

the internal sources of the organization is termed as an internal
information .while the information generated through the Government
reports, the industry surveys etc. is termed as External information, as
the sources of data are outside the organization.
 Internal Sources
 Supply Chain Management
 External Sources  Raw Material Supply
 Finance And Control
Business  Competitors  Economic
 Planning
Intelligence  Suppliers  Technology
 Human Resource Management
Process  Customers  Equity market
 Material Management
and Tools  Stasticals  Financial market
 Customer Relation ship Mgt.  Supply Demand  Environmental Issue
 Production Control
 Process Automation
 Research Activities
 The decision theory suggest s the methods of solving the problems of decision making under certainty,
risk and uncertainty.
 A decision making situation is of certainty when the decision maker has full knowledge about the
alternatives and its outcomes.
 This is possible when perfect information is available.

 Formula -
VPI= (V2+V1)-(C2+C1)
V1 = Value from Information
C1 = Cost for Information
VPI= Value of Perfect Information
“A system is a
Group of interrelated components
working together towards
a common goal
by accepting inputs and producing outputs
in an organized transformation process.”
DATA Information


Text Analyzing Sorting Output


Input Process Output

 Boundary - The features which define and delineate a system forms its
 Interface – The interconnections and interactions between the subsystems
are termed as interfaces
 Subsystem - Each system is composed of subsystems which in turn made up
of other subsystems; each subsystem is delineate to its boundary.
 Black Box:- since the input outputs are known but not the actual
transformation from one to other.
Information System

Operation Management Control

Support System Support System Systems
Operation Support Systems
Operation Support systems support Business operations

(1) (2)
Transaction Support System (3) Process Control Systems
Processing Business daily routine Control of industrial Processes
Enterprise Collaboration Systems
Team and Workgroup collaboration.
Management Support System
Support of Managerial Decision Making

(1) (3)
Management Information system Decision Support System
(2) Interactive Decision Support
Pre specified Reporting for Executive Support System
managers. Information Tailored for Executives.
Control Systems
(to make a Control on another system)

Feedback and Feed Forward

Control System Open and Control System
closed System
Feedback and Control System:-

 A system with feedback and control components is called as cybernetic

system that is a self monitoring system, self-regulating system.
 Feedback:-is data about the performance of a system.
 Control:-involves monitoring and evaluating feedback to determine whether
a system is moving towards the achievement of its goal.
Data Information

Input Process Output

Feed Back
Feed Forward Control System:-

 Feed Forward Control is an preventive control. It triggers the effect

before the anticipated deviation from standard accures.

Feed Forward Control

system Objective

Control action

Process Output
Open and closed System:-

 A Closed system in physics is defined as a system which is self-

contained. It does not exchange material, energy with its
environment. e.g. Chemical reaction in sealed ,insulated container.
 Open Systems exchanges the information, material or energy with its
environment including random and undefined input. e.g. biological
system such as human. Open systems tend to have form and structure
to allow them to adapt to changes in their environment in such a way
as to continue their existence.
“A Management information System is an integrated user-machine system
for providing information to support the operations, management, analysis,
and decision making functions in an organization.”
 It Facilitates planning : MIS improves the quality of plants by providing
relevant information for sound decision – making . Due to increase in the
size and complexity of organizations, managers have lost personal contact
with the scene of operations.
 In Minimizes information overload : MIS change the larger amount of data
in to summarized form and there by avoids the confusion which may arise
when managers are flooded with detailed facts.
 MIS Encourages Decentralization : Decentralization of authority is possibly
when there is a system for monitoring operations at lower levels. MIS is
successfully used for measuring performance and making necessary change
in the organizational plans and procedures.
 It brings Co ordination : MIS facilities integration of specialized activities
by keeping each department aware of the problem and requirements of
other departments. It connects all decision centers in the organization .
 It makes control easier : MIS serves as a link between managerial planning
and control. It improves the ability of management to evaluate and improve
performance . The used computers has increased the data processing and
storage capabilities and reduced the cost .
 MIS assembles, process , stores , Retrieves , evaluates and Disseminates
the information .
 MIS is a computerized information system.
 More data leads to effective decision making.
 Managers know their all information needs.
 Managers do not have to understand how MIS works
Concept OF MIS

The three components of MIS provide a more complete and focused

definition, where SYSTEM suggests integration and holistic

view, INFORMATION stands for processed data,

and MANAGEMENT is the ultimate user, the decision makers.


 Data is processed into information with the help of a system. A

system is made up of inputs, processing, output and feedback or

Thus MIS means a system for processing data in order to give proper
information to the management for performing its functions.

In MIS, Information means the processed data that helps the

management in planning, controlling and operations.

Information is processed i.e. recorded, summarized, compared and finally

presented to the management in the form of MIS report.

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.

Definition Of MIS

Management Information System or 'MIS' is a planned

system of collecting, storing, and disseminating data in the

form of information needed to carry out the functions of

Objective Of MIS

The goals of an MIS are to implement the organizational structure and dynamics

of the enterprise for the purpose of managing the organization in a better way

 Capturing Data  Information Retrieval

 Processing Data  Information Broadcast

 Information Storage
Characteristics of MIS

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

 It should provide a holistic view of the dynamics and the structure of the organization.

 It should work as a complete and comprehensive system covering all interconnecting

sub-systems within the organization.

 It should be planned in a top-down way, as the decision makers or the management

should actively take part and provide clear direction at the development stage of
the MIS.
Characteristics of MIS

 It should be based on need of strategic, operational and tactical information of

managers of an organization.

 It should also take care of exceptional situations by reporting such situations.

 It should be able to make forecasts and estimates, and generate advanced

information, thus providing a competitive advantage. So, Decision makers can take
actions on the basis of such predictions.

 It should create linkage between all sub-systems within the organization, so that the
decision makers can take the right decision based on an integrated view.
Characteristics of MIS

 It should allow easy flow of information through various sub-systems, thus avoiding
redundancy and duplicity of data. It should simplify the operations with as much
practicability as possible.

 Although the MIS is an integrated, complete system, it should be made in such a

flexible way that it could be easily split into smaller sub-systems as and when required.

 A central database is the backbone of a well-built MIS.


Scope Accounting

of MIS

shows the
nature and
scope of MIS:

Components of MIS

 People
 Business Procedures
 Data
 Hardware
 Software

Company such as Apple Inc. Why are they successful?

Why do customers love and buy the iPhone?

It is because the iPhone adds value to their lives. This is why

Apple Inc. is a successful business. Value chain refers to
activities that a company performs to create value for its
Porter's Value chain Concept

The concept of a value chain was developed by Michael Porter. Porter's value chain has two
activities namely;

 Primary activities – these are activities that are related to the creating products/services,
marketing and sales, and support. Primary activities consist of inbound logistics, operations,
outbound logistics, marketing and sales, and service.

 Support activities – these are activities that support the primary activities. Support activities consist
of procurement (purchasing), human resource management, technological development and
The following diagram represents the value chain
Types of MIS

 Transaction Processing System (TPS)

 Decision Support System (DSS)

 Executive Support System (ESS)

 Supply Chain Management (SCM)

 Customer Relationship Management (CRM)

 Knowledge Management System ()KMS

Types of MIS
Transaction Processing System (TPS)

 A transaction process system (TPS) is an information processing system for business

transactions involving the collection, modification and retrieval of all transaction
data. Characteristics of a TPS include performance, reliability and consistency.

 TPS is also known as transaction processing or real-time processing.

Types of MIS
Decision Support System (DSS)

 A decision support system (DSS) is a computerized information system used to support decision-
making in an organization or a business.

 The benefits of decision support systems include more informed decision-making, timely problem-
solving and improved efficiency for dealing with problems with rapidly changing variables.
Example of

Dash Board
Types of MIS
Executive Support System (ESS)

 Executive support systems are intended to be used by the senior managers directly to provide
support to non-programmed decisions in strategic management.

 These information are often external, unstructured and even uncertain. Exact scope and
context of such information is often not known beforehand.

 This information is intelligence based:

 Market intelligence

 Investment intelligence

 Technology intelligence
Types of MIS
Supply Chain Management (SCM)

In a traditional manufacturing environment, supply chain management meant managing

movement and storage of raw materials, work-in-progress inventory, and finished goods from point
of origin to point of consumption.

But SCM is now defined as,

Design, planning, execution, control, and monitoring of supply chain activities with the objective of
creating net value, building a competitive infrastructure, leveraging worldwide logistics,
synchronizing supply with demand and measuring performance globally.
Types of MIS
Supply Chain Management (SCM)

Objectives of SCM

 To decrease inventory cost by more accurately predicting demand and scheduling

production to match it.

 To reduce overall production cost by streamlining production and by improving information


 To improve customer satisfaction.

Types of MIS
Supply Chain Management (SCM)
Advantages of SCM
 Help in giving clear-cut instruction
 Online data transfer reduce paper work
 Low cost of handling inventory
 Achieve excellent logistical performance such as just in time
 Satisfied distributor and whole seller ensure that the right products reach the right place at right time
 Easy accounting of stock and cost of stock
 It involves delivery speed and consistency.
 After sales services
 Increase Teamwork and cooperation
 Improve Quality work
Types of MIS
Customer Relationship Management (CRM)

CRM is an enterprise application module that manages

a company's interactions with current and future
customers by organizing and coordinating, sales and
marketing, and providing better customer services
along with technical support.
Types of MIS
Customer Relationship Management (CRM)

Why CRM?
 To keep track of all present and future customers.
 To identify and target the best customers.
 To let the customers know about the existing as well as the new products and services.
 To provide real-time and personalized services based on the needs and habits of the
existing customers.
 To provide superior service and consistent customer experience.
 To implement a feedback system.
Types of MIS
Customer Relationship Management (CRM)

Advantages of CRM Disadvantages of CRM

 Provides better customer service  Some times record loss is a major
 Discovers new customers.
 Overhead costs.
 Cross-sells and up-sells products more effectively.
 Giving training to employees is an issue in
 Helps sales staff to close deals faster.
small organizations.
 Makes call centers more efficient.
 Simplifies marketing and sales processes.
Knowledge Management System (KMS)

 A knowledge management system (KMS) is a system for applying and using knowledge
management principles.

 A knowledge management system is made up of different software modules served by a central

user interface.

 Some of these features can allow for data mining on customer input and histories, along with the
provision or sharing of electronic documents.

 Knowledge management systems can help with staff training and orientation, support better
sales, or help business leaders to make critical decisions.
Benefits of MIS

 It Facilitates planning

 In Minimizes information overload

 MIS Encourages Decentralization

 It brings Co ordination

 It makes control easier :

Limitation OF MIS

 Highly sensitive requires constant monitoring.

 Budgeting of MIS extremely difficult.

 Quality of outputs governed by quality of inputs.

 Lack of flexibility to update itself.

 Effectiveness decreases due to frequent changes in top

Factors contributing in the Success of MIS

 The MIS is integrated into the managerial functions. It sets clear objectives to ensure

that the MIS focuses on the major issues of the business.

 An appropriate information processing technology required to meet the data

processing and analysis needs of the users of the MIS is selected.

 The MIS is oriented, defined and designed in terms of the user's requirements and its

operational viability is ensured.

Factors contributing in the Success of MIS

 The MIS recognizes that a manager is a human being and therefore, the systems must
consider all the human behavioral factors in the process of the management.

 The MIS recognizes that the different information needs for different objectives must
be met with.

 The MIS is easy to operate and, therefore, the design of the MIS has such features
which make up a user-friendly design.
Factors contributing in the Success of MIS

 The MIS is kept under continuous surveillance, so that its open system design is
modified according to the changing information needs.

 MIS focuses on the results and goals, and highlights the factors and reasons for non

 MIS recognizes that the information needs become obsolete and new needs emerge.
therefore, MIS has a basic potential capability to quickly meet new needs of
Factors Contributing to Failures

 If MIS is considered as a data processing and not as an information processing system.

 When MIS does not provide that information which is needed by the managers but it tends to
provide the information generally the function calls for.

 Underestimating the complexity in the business systems and not recognizing it in the MIS design
leads to problems in the successful implementation.

 Adequate attention is not given to the quality control aspects of the inputs, the process and the
outputs leading to insufficient checks and controls in the MIS.

 The MIS is developed without streamlining the transaction processing systems in the
Factors Contributing to Failures

 Lack 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 responsible role in the MIS.

 The MIS does not meet certain critical and key factors of its users such as a response to the query on the database,
an inability to get the processing done in a particular manner,

 lack of user-friendly system and the dependence on the system personnel.

 A belief that the computerized MIS can solve all the management problems of planning and control of the

 Lack of administrative discipline in following the standardized systems and procedures, wrong coding and
deviating from the system specifications result in incomplete and incorrect information.

 The MIS does not give perfect information to all the users in the organization.

How MIS can helps to

Globalizes the business.
How MIS can helps to Globalizes the business.

 MIS give a competitive advantages to the orgnization

 MIS helps to maintain customer information

 MIS increases productivity

 MIS enhances the quality of decision-making

 MIS improves communication and helps develop team work

 MIS can facilitate organizational transformation