By: Rajesh Kumar MIShra

LNMI, Patna
Paper: BB – 505 Management Information Systems
 Introduction of Information System: Introduction of Information System in Business, Role of
Information System. Components and Resources of Information Systems, Information System
Activation.

 Solving Business Problems with Information System: Defining Problems and Opportunities,
Developing, Evaluating Alternative Solutions, Selecting, Designing and Implementing Solution.

 Information Technology: A Manager Overview: Managerial Overview of Computer Hardware &

Software. Telecommunication, Database Management.

 Used Information Technology for Sector: Business use of the Internet, Introduction & Application
to Electronic Commerce. Business to Consumer Commerce, Business to Business Commerce.
Electronic Payment and Security.

 Information System for Managerial Decision Support: Introduction to Managerial Information

System, Decision Support System, Examples of Decision Support System.

 REFFERENCE BOOK:
 James A. O’Brien : Management Information System
 Bansal : Information System Analysis & Design
 Jawadeger : Management Information System
 Alter : Information System: A Management Perspective
 MANAGEMENT, INFORMATION, SYSTEMS
MANAGEMENT
 Management compromises the processes or activities that
describes what managers do in the operation of their
organization; plan, organize, initiative and control operations.
INFORMATION
 Data must be distinguished from information.
 Data are facts and figures that are not currently being used in
decision process.
 Information consist of data that have been retrieved, processed or
otherwise used for informative or inference purposes, arguments,
or as a basis for forecasting or decision making.
SYSTEMS
 A system can be described simply as a set of elements joined
together for a common objective.
 The system concept of MIS is therefore one of the optimizing the
output of the organization by connecting the operating sub-
system through the medium of information exchange.
 INTRODUCTION TO MIS
 MIS can be defined as –
“A system which collects, processes, stores and
distributes information to help in decision making for
managerial functions.”
 (Planning, staffing, directing, controlling, organizing and
budgeting)
 It may also be defined as Integrated user/ Machine system
for providing information to support the decision making
process.
 MIS is a computer based system, which presents both
external and internal information of business.
 This system utilizes computer hardware and software,
manual procedure for analysis, planning, control and
decision making.
 INTRODUCTION TO MIS
 These system do not take decisions but they assist in
providing a necessary information as an input to the
decision making process.
 MIS should provide information which is consistent,
accurate, timely, economically flexible and relevant.
 MIS can be computerized or manual.
 MIS provides information in report format on regular basis
to assist managers with decision which occur frequently and
can be anticipated.
 Management Information System plays a very important
role in an organization.
 COMPONENTS OF MIS
Management information system refers to the data, equipment and computers program that are used to
develop information for managerial use. The MIS consists of following components which are as follows-
 People:- People is only living component of MIS which operates and controls the other components of
MIS. They enter, analyze and diagnose data, so that useful information is produced and provided to top
executives for decision making.
 Data process:- Data process uses different procedures, so that data can be properly analyzed and
effective information is generated. Procedures explain people how to operate the computer hardware,
what program to run, what data to use and what to do with the results.
 Data communication:- There are different ways for communication of data. It may be informed orally
or in the form of written report. Written forms are more appropriate than oral ones as it is permanent
and systematic way of organizing information.
 Information:- Data are facts and figures that are not currently being used in decision process. Data is
process by applying different procedures to obtain information. It may be recorded into computer,
storage media or manual files and is retrived whenever required.
 System planning:- We have achieved a very high degree of automation and combination sub-system in
scientific, mechanical and factory manufacturing operation. The system concept of MIS is therefore of
optimizing the output of the organization by connecting the operation sub-system, through the
medium of information exchange.
 Hardware and Software:- The hardware generally consists of computer equipments, on the other
hand software consists of programs or instructions given to the computer such as pay roll processing,
invoices etc.
PYRAMIDICAL STRUCTURE OF MIS
 Lower level:-The bottom layer consists of
information required for transaction processing and
inquiry processing.
 Operational level:- This layer has the information
Top
which is required for Level
day to day performance of
activities and their control.
Middle Level

 Middle level:- This layer has the information

which is useful for Operational
tactical Levelplanning and decision

making to implement the policy of top

management. Lower Level

 Top level:- This layer has information which is

useful for strategies and policy planning.
 CHARACTERISTICS OF MIS
The MIS plays a vital role in management, administrations and operations
of an organization as it helps in information generation, communication,
problem identification in the process of decision making.
The main features of MIS are:-
 Management oriented:- The development of MIS starts after deciding
the management needs and keeping in view overall objective of
management.
 Management directed:- A good MIS removes the lack of knowledge,
enriches experience and improves analytical abilities leading to better
business judgment.
 Integrated system:- MIS binds together database of business system
and through information interchange, integrates the organization. It also
provides adequate development resources and removes the human and
organizational barriers to progress.
 Avoid redundancy:- Since MIS is a integrated system, it avoids
unnecessary inconsistency and redundancy in data gathering and
storage.
 CHARACTERISTICS OF MIS
 Common data flow:-MIS provides common data flows, which try to utilize
minimum data processing efforts and minimize the number of output document.
 Heavy planning element:- Designing and implementation of MIS require detailed
and meticulous planning of activities like acquisition and utilization of resources.
 Common database:- MIS acts as a master that holds the functional sub-system
together. It achieves this aim by allowing access to different master files of data to
several functional sub-systems.
 Flexibility:- MIS design should be flexible so as to provide alternate ways of
processing data and system should be easy to operate so that not much of computers
skills are required.
 Computerization:- MIS can be computerized because of its nature. This provide
speed, accuracy and consistency in creating and access of files.
 Relevance:- MIS should deal only with operation and control of relevant
information.
 Support to top management:- MIS cannot be effective unless they receive the full
support of top management. For this, top management should be educated about cost
and benefits of MIS.
 Periodic evaluation:- The last feature of MIS is that the system should be
evaluated at periodic intervals to ensure that MIS is achieving the objective of which
this has been installed..
 FUNCTIONS OF MIS
A MIS is used to collect data, store and process data and present
information to managers.
 Collect data:- Data can be obtained from source within
and outside the organization. Internal sources such as
records, reports and external sources such as publications,
customers and consultancy.
 Store and process data:- After creation of data, a database
must be stored and processed in a form useful to managers.
The data can be loaded into computers for easy access by
user.
 Present information to users:- After collection of data,
storing and processing of data, the next step is to present the
information to managers for their use.
 Role Of MIS
The role of MIS in an organization 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 MIS plays exactly the same role in the
organization.

 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 and
the top management.

 The MIS satisfies the diverse needs through a variety of systems such as
Query Systems, Analysis Systems, Modeling Systems and Decision Support
Systems.
 Role Of MIS
The role of MIS in an organization can be compared to the role of
heart in the body.
 The MIS helps in Strategic Planning, Management Control, Operational
Control and Transaction Processing.

 The MIS helps the clerical personnel in the transaction processing and answers
their queries on the data pertaining to the transaction, the status of a
particular record and references on a variety of documents.

 The MIS helps the junior management personnel by providing the operational
data for planning, scheduling and control, and helps them further in decision
making at the operations level to correct an out of control situation.

 The MIS helps the middle management in short term planning, target setting
and controlling the business functions.
 Role Of MIS
The role of MIS in an organization can be compared to the role of
heart in the body.
 It is supported by the use of the management tools of planning and control.

 The MIS helps the top management in goal setting, strategic planning and
evolving the business plans and their implementation.

 The MIS plays the role of information generation, communication problems

and helps in the process of decision making.

 The MIS, therefore, plays a vital role in the management, administration and
operations of an organization
 Benefits of MIS
It improves personal efficiency.
It expedites problem solving
(speed up the progress of problems solving in an
organization).
It facilitates interpersonal communication
It promotes learning or training.
It increases organizational control.
It generates new evidence in support of a decision.
It creates a competitive advantage over competition.
It encourages exploration and discovery on the part of the
decision maker.
It reveals new approaches to thinking about the problem
space.
It helps automate the Managerial processes.
 Features of MIS
Timeliness

Accuracy

Consistency

Completeness

Relevance
 USES/BENEFITS/ROLE OF MIS
 MIS ensures that appropriate and relevant data is collected
from various sources, processed and is sent further to needy
destination.
 It fulfills the needs of individual, group, management.
 MIS helps in strategic planning, management control,
operational control and transaction processing system.
 MIS plays an important role in information generation,
communication, problem identification and decision making
administration.
 With good MIS support marketing, finance, production and
personnel functions increases efficiency.
 MIS creates structured database and therefore saves time.
 MIS brings clarity in communication and understanding,
thus helps in bringing degree of professionalism.
 INFORMATION
 We breathe information, eat information, drink
information, wake up with information, sleep with
information etc.
 So information is as life blood of any organization, without
information survival of any organization is not possible.
 Information means “processing of data or analyses of data in
a specific context to get required information”.
 It is a basis of decision making.
 The decision taken on basis of complete and accurate
information is less risky.
 The value of perfect information is calculated by finding out
the difference between the optimal policy with and without
perfect information.
 Characteristics of an information
 Accuracy:- accuracy means that information is free from MIStakes and error and
it accurately and clearly reflects the meaning of data from which it is derived. It
conveys the accurate picture to receiver and is free from biasness.
 Timeliness :- information must be delivered at the right time and the right
place to the right person otherwise information would be of little value to the
organization. hence, making information available to the receiver within time is
very crucial for every organization.
 Relevance :- information should be to the point and meaningful to the
decision maker. Relevance of information for different users will be different.
 Correct information format :- information should be given to the user in
such a form that it could be easily understood by user.
 Completeness :-information is said to be complete if decision maker can
satisfactory solve the problem at hand using that information. Incomplete
information has no meaning for user.
 Subjectivity :- it is the value and usefulness of the information.
 Accessibility :- information should be readily accessible in desired format
when needed. Technological advancement has made data accessibility easy.
 Types Of Information System
 TPS(Transaction Processing System)
 OAS(Office Automation System)
 EIS(Executive Information System)
 ES(Expert System)
 TPS(Transaction Processing System)
 Most fundamental computer system which is concerned with
processing of business is called TPS.
 The objective of TPS is to improve routine business activities
on which functions of organization depends.
 The main work of TPS is to record and process the data
resulting from business transactions.
 A transaction is an event or entity which affects the
organization.
 Transaction processing could also be considered as a set of
procedures for handling transactions and it includes activities
like calculation, classification, storage and retrieval, sorting,
validation, verification, summarization etc.
 These activities occur at operational level in any organization.
 TPS produces a variety of information system for internal and
external cause.
 OAS(Office Automation System)
 OAS collects, processes, stores and transmits data and
information in the form of electronic office communication.
These automatic systems rely on text processing,
telecommunication and offer information system
technologies.
 Example- word processing, electronic mail, desktop
publishing, telecommunication and document image
processing.
 It enhances the abilities of users to communicate with their
colleagues within their work groups and organization and
with external contact such as customers and suppliers.
 OAS(Office Automation System)
Advantages-
 They provide more time to managers to concentrate on their basic jobs.
 They improve the quality of work in terms of content, thoroughness,
timeliness and accuracy.
 They speed up specific functions and thereby increases the quantity of
clerical output.
 They reduce the time spent on input capture and creation.
 They co-ordinate and integrate office tasks.
 They enable more cost- effective and time- effective communications.
 They increase the productivity of office workers at all levels.

Disadvantages –
 Cost of automated office hardware is very high.
 OAS can disrupt traditional office work roles and environment.
 OAS may lead to security problems.
 EIS(Executive Information System)
 The decision made by executives are mostly unstructured for
which informational requirements are generally for processed
and summarized data from variety of sources.
 Initially tip executive information system relies on non
computer source.
 Top level executives get information whenever they require
from many sources like letters, memos, periodicals and report
produced manually as well as by computer system.
 Thus, with computer based EIS provides top management
with immediate and easy access to selective information,
which reduces the information overload on executives and
help to achieve firm’s strategic objective.
 ES(Expert System)
 Expert system aims at formalizing expertise and makes it available
for repetitive types of business decisions. They use artificial
intelligence tools to generate knowledge out of information.
 It helps human experts perform their jobs effectively and is
important where expertise is scarce and is therefore expensive.
 The expert system has been developed for the purpose of expertise
from those with the knowledge in a convenient and easily accessed
manner.
 Expert systems are designed to replace the function formed by
human experts.
 Expert system provide information to managers as expert advice.
 An expert system supports the intellectual work of professionals
engaged in design, diagnosis or evaluation of complex situation
requiring expert knowledge in a well defined area.
 ES(Expert System)
Advantages:-
 Planning:- ES can make a valuable contribution to planning. It can use
information from earlier project which can be used to improve subsequent plans.
 Decision making:- ES can support decision making by storing information in
its knowledge base from several experts rather than a single expert.
 Monitoring:- ES can be used to monitor the process, activities of employees
and cash management etc.
 Diagnosis:- ES can be used in diagnosing different conditions.
 Ex- in diagnosing the reasons for manufacturing equipment, human diseases in
medicine etc.
 Training:- when an ES is being used as a regular nature in the course of work,
users learn the way the system reaches destination.
 Timely response:- ES are available on call at all the time and, can be used to
provide immediate support and to perform task immediately.
 Reliability:- they are reliable in the sense that they do not become tired or
bored. They pay attention to all details and do not overlook any relevant
information.
 ES(Expert System)

 Disadvantages:-
 Expert system are not problem solver.
 It may take longer time to solve problem than an expertise.
 Expert system take long development time and are expensive.