Management

Information Systems

MIS is defined as integrated system of man and machine for providing the
information to support the operation, the management and the decision –
making function in the management

Management Information System (M.I.S.) is basically concerned with processing data

into information, which is then communicated to the various Departments in an
organization for appropriate decision-making. When information systems are designed to
provide information needed for effective decision making by managers, they are called management
information systems. MIS is a formal system for providing management with accurate and timely
information necessary for decision making.
Data Information Communication Decisions

The system provides information on the past, present and project future and on relevant events
inside and outside the organization . It may be defined as a planned and integrated system for
gathering relevant data, converting it in to right information and supplying the same to the concerned
executives. The main purpose of MIS is to provide the right information to the right people at the
right time
an arrangement of equipment and procedures, often computerized, that is designed to provide managers with
information
a computerized information-processing system designed to support the activities and functions of company
management.

Computer-based or manual system that transforms data into information useful in the support of decision
making. MIS can be classified as performing three functions:

(1) To generate reports-for example, financial statements, inventory status reports, or performance reports
needed for routine or non-routine purposes.

(2) To answer what-if questions asked by management. For example, questions such as "What would happen
to cash flow if the company changes its credit term for its customers?" can be answered by MIS. This type of
MIS can be called Simulation.

(3) To support decision making. This type of MIS is appropriately called Decision Support System (DSS).
DSS attempts to integrate the decision maker, the data base, and the quantitative models being used.

Read more: http://www.answers.com/topic/management-information-system#ixzz1MxwDxqsq

MIS, or management information systems, are used to manage the data created within the structure of a
particular business. These systems store the data and allow the business to manipulate, analyze and compile
the data through the use of software applications. Reports and analysis pulled from an information system can
assist in the directing, planning and decision making needs of managers.

Information Management
o Businesses gather information every day in the form of invoices, proposals, daily sales figures
and time cards. This information can provide a business insight into their operations, create a
 platform for decision making and reveal ideas that feed strategic planning. Gathering the
information requires a consistent and reliable process in order for the information to be useful.
Information management requires a system that supports the business model the information
comes from.

A management information system (MIS) is a system or process that provides

the information necessary to manage an organization effectively. MIS and the
information it generates are generally considered essential components of
prudent and reasonable business decisions.

 Management Information System (MIS) Management Information System: Definition MIS (management
information systems) 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, quot;MISquot; or the quot;MIS departmentquot; refers to a central or centrally-coordinated
system of computer expertise and management, often including mainframe systems but also including by
extension the corporation's entire network of computer resources. The MIS program is intended to be the first
step in a life-long learning experience in the exciting and dynamic field of information technology. It provides
a strong foundation for advancement and success in IT careers and ventures. Basically, Management
Information Systems is the study of the use of computers in business. This course shows students how
Information Systems are used to support critical business operations and achieve strategic objectives. The
elements or corporate technology are studied and its application to specific business situations is discussed.
Students develop a small information system using Microsoft Access and use Excel as a decision support tool.
In the beginning, business computers were used for the practical business of computing the payroll and
keeping track of accounts payable and receivable. As applications were developed that provided managers
with information about sales, inventories, and other data that would help in managing the enterprise, the term
‘MIS’ arose to describe these kinds of applications. Today, the term is used broadly in a number of contexts
and includes (but is not limited to): decision support systems, resource and people management applications,
project management, and database retrieval applications. Page 3 of 26
 Management Information System (MIS) What is Management Information System? Management
Information System is a general name for the academic discipline covering the application of information
technology to business problems. As an area of study it is also referred to as Information Technology
Management. The study of information systems is usually a commerce and business administration discipline,
and frequently involves software engineering, but also distinguishes itself by concentrating on the integration
of computer systems with the aims of the organization. The area of study should not be confused with
computer science which is more theoretical in nature and deals mainly with software creation, and not with
computer engineering, which focuses more on the design of computer hardware. IT service management is a
practitioner-focused discipline centering on the same general domain. In business, information systems
support business processes and operations, decision-making, and competitive strategies. Page 4 of 26
 Management Information System (MIS) Purpose & Scope of Management Information System The
Purpose and Scope of MIS can be defined as “The combination of human and computer based resources that
results in the collection, storage, retrieval, communication and use of data for the purpose of efficient
management of operations and for business planning”. In order to get a better grip on the activity of
information processing, it is necessary to have a formal system which should take care of the following points:
Handling of a voluminous data.ϖ Confirmation of the validity of dataϖ & transaction. Complex processing
of data and multi-dimensional analysis.ϖ Quick searchϖ & retrieval. Mass Storage.ϖ Communication of
the information system to the user on time.ϖ Fulfilling the changing needs of the information.ϖ The
management information system uses computers and communication technology to deal with these points of
supreme importance. Page 5 of 26
 Management Information System (MIS) Role of Management Information System The role of the MIS in
an organisation can be compared to the role of heart in the body. The information is the blood and MIS is the
heart. In the body, the heart plays the role of supplying pure blood to all the elements of the body including the
brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming
pure blood, processes it and sends it to the destination in the quantity needed. It fulfills the needs of blood
supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the
organisation. The system ensures that an appropriate data is collected from the various sources, processed, and
sent further to all the needy destinations. The system is expected to fulfill the information needs of an
individual, a group of individuals, the management functionaries: the managers & the top management. The
MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems,
Modelling Systems and Decision Support Systems. The MIS helps in Strategic Planning, Management
Control, Operational Control and Transaction Processing. Page 6 of 26
 Management Information System (MIS) Background of Management Information System A Management
Information System (MIS) is a system or process that provides the information necessary to manage an
organization effectively. MIS and the information it generates are generally considered essential components
of prudent and reasonable business decisions. The importance of maintaining a consistent approach to the
development, use, and review of MIS systems within the institution must be an ongoing concern of both bank
management and OCC examiners. MIS should have a clearly defined framework of guidelines, policies or
practices, standards, and procedures for the organization. These should be followed throughout the institution
in the development, maintenance, and use of all MIS. MIS is viewed and used at many levels by management.
It should be supportive of the institution's longer term strategic goals and objectives. To the other extreme it is
also those everyday financial accounting systems that are used to ensure basic control is maintained over
financial recordkeeping activities. Financial accounting systems and subsystems are just one type of
institutional MIS. Financial accounting systems are an important functional element or part of the total MIS
structure. However, they are more narrowly focused on the internal balancing of an institution's books to the
general ledger and other financial accounting subsystems. For example, accrual adjustments, reconciling and
correcting entries used to reconcile the financial systems to the general ledger are not always immediately
entered into other MIS systems. Accordingly, although MIS and accounting reconcilement totals for related
listings and activities should be similar, they may not necessarily balance. An institution's MIS should be
designed to achieve the following goals: Enhance communication among employees.ϖ Deliver complex
material throughout the institution.ϖ Provide an objective system for recording and aggregating
information.ϖ Reduce expenses related to labor-intensive manual activities.ϖ Support the organization's
strategic goals and direction.ϖ Page 7 of 26
 Management Information System (MIS) Because MIS supplies decision makers with facts, it supports and
enhances the overall decision making process. MIS also enhances job performance throughout an institution.
At the most senior levels, it provides the data and information to help the board and management make
strategic decisions. At other levels, MIS provides the means through which the institution's activities are
monitored and information is distributed to management, employees, and customers. Effective MIS should
ensure the appropriate presentation formats and time frames required by operations and senior management is
met. MIS can be maintained and developed by either manual or automated systems or a combination of both.
It should always be sufficient to meet an institution's unique business goals and objectives. The effective
deliveries of an institution's products and services are supported by the MIS. These systems should be
accessible and useable at all appropriate levels of the organization. MIS is a critical component of the
institution's overall risk management strategy. MIS supports management's ability to perform such reviews.
MIS should be used to recognize, monitor, measure, limit, and manage risks. Risk management involves four
main elements: Policies or practices.ϖ Operational processes.ϖ Staff and management.ϖ Feedback
devices.ϖ Frequently, operational processes and feedback devices are intertwined and cannot easily be
viewed separately. The most efficient and useable MIS should be both operational and informational. As such,
management can use MIS to measure performance, manage resources, and help an institution comply with
regulatory requirements. One example of this would be the managing and reporting of loans to insiders. MIS
can also be used by management to provide feedback on the effectiveness of risk controls. Controls are
developed to support the proper management of risk through the institution's policies or practices, operational
processes, and the assignment of duties and responsibilities to staff and managers. Page 8 of 26
  Management Information System (MIS) Technology advances have increased both the availability and
volume of information management and the directors have available for both planning and decision making.
Correspondingly, technology also increases the potential for inaccurate reporting and flawed decision making.
Because data can be extracted from many financial and transaction systems, appropriate control procedures
must be set up to ensure that information is correct and relevant. In addition, since MIS often originates from
multiple equipment platforms including mainframes, minicomputers, and microcomputers, controls must
ensure that systems on smaller computers have processing controls that are as well defined and as effective as
those commonly found on the traditionally larger mainframe systems. All institutions must set up a framework
of sound fundamental principles that identify risk, establish controls, and provide for effective MIS review and
monitoring systems throughout the organization. Commonly, an organization may choose to establish and
express these sound principles in writing. The OCC fully endorses and supports placing these principles in
writing to enhance effective communications throughout the institution. If however, management follows
sound fundamental principles and governs the risk in the MIS Review area, a written policy is not required by
the OCC. If sound principles are not effectively practiced, the OCC may require management to establish
written MIS policies to formally communicate risk parameters and controls in this area. Sound fundamental
principles for MIS review include proper internal controls, operating procedures and safeguards, and audit
coverage. Page 9 of 26
 Management Information System (MIS) Impact of the Management Information System Since the MIS
plays a very important role in the organisation, it creates an impact on the organisation’s functions,
performance and productivity. The impact of MIS on the functions is in its management. With a good MIS
support, the management of marketing, finance, production and personnel becomes more efficient. The
tracking and monitoring of the functional target becomes easy. The MIS creates another impact in the
organisation which relates to the understanding of the business itself. The MIS begins with the definition of a
data entity and its attributes. It uses a dictionary of data, entity and attributes, respectively, designed for
information generation in the organisation. The MIS calls for a systemisation of the business operations for an
effective system design. This leads to streamlining of the operations which complicate the system design. It
improves the administration of the business by bringing a discipline in its operations as everybody is required
to follow and use systems & procedures. This process brings a high degree of professionalism in the business
operations. Since the goals and objectives of the MIS are the products of business goals & objectives, it helps
indirectly to pull the entire organisation in one direction towards the corporate goals and objectives by
providing the relevant information to the people in the organisation. Page 10 of 26
 Management Information System (MIS) Learning Objectives of MIS Identify the changes taking place in
the form and use of decision supportϖ in E-business enterprises. Identify the role and reporting alternatives
of management informationϖ systems. Describe how online analytical processing can meet key information
needsϖ of managers. Explain the decision support system concept and how it differs fromϖ traditional
management information systems. Explain how executive information systems can support the informationϖ
needs of executives and managers. Identify how neural networks, fuzzy logic, genetic algorithms, virtual
reality,ϖ and intelligent agents can be used in business. Give examples of several ways expert systems can be
used in business decision-making situations. Page 11 of 26
 Management Information System (MIS) The Functional Support Role in MIS It can also be called Data
Base Management System (DBMS) wherein maximum utilization in an efficient manner based on the
organisational needs is obtained by analyzing, processing and referencing of Data Base. Not only for the
business, but for all kinds of organisations such as Disaster Management Organisation for using it as Disaster
Management Information System. Business processes and operations support function are the most basic.
They involve collecting, recording, storing, and basic processing of data. Information systems support
business processes and operations by: accounting records including sales data, Recording and storingϖ
purchase data, investment data, and payroll data. financial statements such as income Processing such records
intoϖ statements, balance sheets, ledgers, and management reports, etc. inventory data, work in process data,
Recording and storingϖ equipment repair and maintenance data, supply chain data, and other
production/operations records. production schedules, Processing these operations records intoϖ production
controllers, inventory systems, and production monitoring systems. human resource records as personnel
Recording and storing suchϖ data, salary data, and employment histories. employee expense Processing
these human resources records intoϖ reports, and performance based reports. market data, customer profiles,
and customer Recording and storingϖ purchase histories, marketing research data, advertising data, and other
marketing records. Processing these marketing records into advertising elasticity reports,ϖ marketing plans,
and sales activity reports. Page 12 of 26
 Management Information System (MIS) business intelligence data, competitor Recording and storingϖ
analysis data, industry data, corporate objectives, and other strategic management records. strategic
management records into industry Processing theseϖ trends reports, market share reports, mission
statements, and portfolio models. The bottom line is that the information systems use all of the above to
implement, control, and monitor plans, strategies, tactics, new products, new business models or new business
ventures. Page 13 of 26
 Management Information System (MIS) The Decision Support Role in MIS The business decision-making
support function goes one step further. It becomes an integral part -- even a vital part -- of decision-making. It
allows users to ask very powerful quot;What if…?quot; questions: What if we increase the price by 5%? What
if we increase price by 10%? What if we decrease price by 5%? What if we increase price by 10% now, then
decrease it by 5% in three months? It also allows users to deal with contingencies: If inflation increases by 5%
(instead of 2% as we are assuming), then what do we do? What do we do if we are faced with a strike or a new
competitive threat? An organization succeeds or fails based on the quality of its decisions. The enhanced
ability to explore quot;what ifquot; a question is central to analyzing the likely results of possible decisions
and choosing those most likely to shape the future as desired. quot;Business decision-making support
functionquot; is a phrase likely to quicken the pulse of no one but an accountant, but, in fact, it is all about
turning wonderful dreams into solid realities. Page 14 of 26
 Management Information System (MIS) The Communication Decision Support System Role Information
systems can support a company's competitive positioning. Here are three levels of analysis: The supports for
help in piloting the chain of internal value. They areϖ the most recent and the most pragmatic systems within
the reach of the manager. They are the solutions to reductions of costs and management of performance. They
are typically named quot;Business Workflow Analysisquot; (BWA) or of quot;Business Management Systems
p2pquot;. Tool networks, they ensure control over piloting the set functions of a company. The real-time
mastery in the costs of dysfunctions cause distances from accounts, evaluation and accounting that are
presented in the evaluation and qualitative reports. All successful companies have one (or two) business
functions thatϖ they do better than the competition. These are called core competencies. If a company's core
competency gives it a long term advantage in the marketplace, it is referred to as a sustainable competitive
advantage. For a core competency to become a sustainable competitive advantage it must be difficult to
mimic, unique, sustainable, superior to the competition, and applicable to multiple situations. Other examples
of company characteristics that could constitute a sustainable competitive advantage include: superior product
quality, extensive distribution contracts, accumulated brand equity and positive company reputation, low cost
production techniques, patents and copyrights, government protected monopoly, and superior employees and
management team. The list of potential sustainable competitive advantage characteristics is very long.
However, some experts hold that in today's changing and competitive world, no advantage can be sustained in
the long run. They argue that the only truly sustainable competitive advantage is to build an organization that
is so alert and so agile that it will always be able to find an advantage, no matter what changes occur. Page 15
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 Management Information System (MIS) Information systems often support and occasionally constitute
these competitive advantages. The rapid change has made access to timely and current information critical in a
competitive environment. Information systems, like business environmental scanning systems, support almost
all sustainable competitive advantages. Occasionally, the information system itself is the competitive
advantage. One example is Wal-Mart. They used an extranet to integrate their whole supply chain. This use of
information systems gave Sam Walton a competitive advantage for two decades. Another example is Dell
Computer. They used the internet to market custom assembled PC's. Michael Dell is still benefiting from this
low-cost promotion and distribution technique. Other examples are eBay, Amazon.com, Federal Express, and
Business Workflow Analysis. Page 16 of 26
 Management Information System (MIS) The Performance Monitoring Role in MIS MIS are not just
statistics and data analysis, but also assessment of human capabilities. They have to be used as an MBO
(Management by objectives) tool. They help: To establish relevant and measurable objectives,ϖ To monitor
results and performances (reach ratios).ϖ To send alerts, in some cases daily, to managers at each level of the
organization, on all deviations between results and pre-established objectives and budgets. The Management
Information System Group develops, maintains and operates software managing a large scope of general
purpose data. The applications enable: On-site users to process orders, manage budgets, assets and stocks.ϖ
The world-wide ESRF user community to process scientific proposals, reports, a forms, and safety aspects
related to experiments, statistics and soon experiment scheduling. Page 17 of 26
 Management Information System (MIS) Potential Benefits of MIS Investments Investing in information
systems can pay off for a company in many ways. Such an investment can support a core competency. Great
companiesϖ invariably have one or two core competencies, something they can do better than anyone else.
This could be anything from new product development to customer service. It is the heart of the business and
no matter what it is; information technology can support that core competency. An IT investment in a
company's core competency can create a significant barrier to entry for other companies, defending the
organization's primary turf and protecting its markets and profits. It can build supply chain networks. Firms
that are a part of anϖ integrated supply chain system have established relationships of trust with suppliers.
This means faster delivery times, problem-free delivery and an assured supply. It can also mean price
discounts and other preferential treatment. The inability of new entrants to get onto a supply chain/inventory
management system can be a major barrier to entry. It can enhance distribution channel management. As with
supplierϖ networks, investment in distribution channel management systems can ensure quicker delivery
times, problem free delivery, and preferential treatments. When the distribution channel management system
is exclusive, it can mean some control over access to retailers, and, once more, a barrier to entry. Such an IT
investment can help build brand equity. To build a brand,ϖ firms often invest huge sums in advertising. A
huge brand name is a formidable barrier to enter and sustaining it can be facilitated by investment in
marketing information systems and customer relationship management system. Information systems can
mean better production processes. Suchϖ systems have become essential in managing large production runs.
Automated systems are the most cost efficient way to organize large scale production. These can produce
economies of scale in promotion, Page 18 of 26
 Management Information System (MIS) purchasing, and production; economies of scope in distribution
and promotion; reduced overhead allocation per unit; and shorter break- even times more easily. This absolute
cost advantage can mean greater profits and revenue. IT investment can boost production processes.
Information systemsϖ allow company flexibility in its output level. Michael Porter claims that economies of
scale are a barrier to entry, aside from the absolute cost advantages they provide. This is because, a company
producing at a point on the long-run average cost curve where economies of scale exist has the potential to
obtain cost savings in the future, and this potential is a barrier to entry. Implementing IT experience can
leverage learning curve advantages.ϖ As a company gains experience using IT systems, it becomes familiar
with a set of best practices that are more or less known to other firms in the industry. Firms outside the
industry are generally not familiar with the industry specific aspects of using these systems. New entrants will
be at a disadvantage unless they can redefine the industries best practices and leap-frog existing firms. IT
investment can impact mass customization production processes. ITϖ controlled production technology can
facilitate collaborative, adaptive, transparent, or cosmetic customization. This flexibility can increase margins
and increase customer satisfaction. Leverage IT investment in computer aided design (1). CAD systemsϖ
facilitate the speedy development and introduction of new products. This can create proprietary product
differences. Product differentiation can be a barrier to entry. Proprietary product differences can be used to
create incompatibilities between competing products (as every computer user knows). These incompatibilities
increase consumers’ switching costs. High customer switching costs is a very valuable barrier to entry (Hey, it
worked for Bill Gates.) It means expanded E-commerce. Company web sites can beϖ personalized to each
customer’s interests, expectations, and commercial needs. They can also be used to create a sense of Page 19
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 Management Information System (MIS) community. Both of these tend to increase customer loyalty.
Customer loyalty is an important barrier to entry. Information systems leverage stability. Technologically
sophisticatedϖ firms with multiple electronic points of contact with customers, suppliers, and others enjoy
greater stability. This monumental appearance of stability can be a barrier to entry, especially in financial
services. The simple fact that IT investment takes a significant amount of money makes it a barrier to entry.
Anything that increases capital requirements is -- guess what? -- A barrier to entry. Page 20 of 26
 Management Information System (MIS) Historical Development The role of business information systems
has changed and expanded over the last four decades. In the incipient decade (1950s and '60s), “elecsystems”
could be afforded by only the largest organizations. They were used to record and store bookkeeping data such
as journal entries, specialized journals, and ledems” were used to generate a limited range of predefined
reports, including income statements (they were called P & L’s back then), balance sheets and sales reports.
They were trying to perform a decision making support role, but they were not up to the task. By the 1970s
“decision support systems” were introduced. They were interactive in the sense that they allowed the user to
choose between numerous options and configurations. Not only was the user allowed customizing outputs,
they also could configure the programs to their specific needs. There was a cost though. As part of your
mainframe leasing agreement, you typically had to pay to have an IBM system developer permanently on site.
The main development in the 1980s was the introduction of decentralized computing. Instead of having one
large mainframe computer for the entire enterprise, numerous PC’s were spread around the organization. This
meant that instead of submitting a job to the computer department for batch processing and waiting for the
experts to perform the procedure, each user had their own computer that they could customize for their own
purposes. Many poor souls fought with the vagaries of DOS protocols, BIOS functions, and DOS batch
programming. As people became comfortable with their new skills, they discovered all the things their system
was capable of. Computers, instead of creating a paperless society, as was expected, produced mountains of
paper, most of it valueless. Mounds of reports were generated just because it was possible to do so. This
information overload was mitigated somewhat in the 1980s with the introduction of “executive information
systems”. They streamlined the process, giving the executive exactly what they wanted, and only what they
wanted. Page 21 of 26
 Management Information System (MIS) The 1980s also saw the first commercial application of artificial
intelligence techniques in the form of “expert systems”. These programs could give advice within a very
limited subject area. The promise of decision making support, first attempted in management information
systems back in the 1960s, had step-by-step, come to fruition. The 1990s saw the introduction of the Strategic
information system. These systems used information technology to enable the concepts of business strategy
developed by scholars like M. Porter, T Peters, J. Reise, C. Markides, and J. Barney in the 1980s. The
sustainability of these applications has since been called into question by N. Carr, which Piccoli and Ives,
among others, have countered. The role of business information systems had now expanded to include
strategic support. The latest step was the commercialization of the Internet, and the growth of intranets and
extranets at the turn of the century. Page 22 of 26
 Management Information System (MIS) Conclusion Through the MIS, the information can be used as a
strategic weapon to counter the threats to business, make businesses more competitive, and bring about the
organisational transformation through integration. A good MIS also makes an organisation seamless by
removing all the communication barriers. Page 23 of 26