INTRODUCTION TO MANAGEMENT INFORMATION SYSTEMS (MIS)

A Management Information System (MIS) focuses on the management of information systems

to provide efficiency and effectiveness of strategic decision making. The concept may include systems
termed transaction processing system, decision support system, expert system, or executive information
system. The term is often used in the academic study of businesses and has connections with other areas,
such as information systems, information technology, and informatics, e-commerce and computer
science; as a result, the term is used interchangeably with some of these areas. Management information
systems as an academic discipline studies people, technology, organizations, and the relationships
among them.
Information can be defined as meaningfully interpreted data and can be recorded as signs, or
transmitted as signals. It is any kind of event that affects the state of a dynamic system that can interpret
the information. Conceptually, information is the message (utterance or expression) being conveyed.
Therefore, in a general sense, information is knowledge communicated or received, concerning a
particular fact or circumstance. It cannot be predicted and resolves uncertainty.
An efficient information system creates an impact on the organization's function, performance,
and productivity. Nowadays, information system and information technology have become a vital part
of any successful business and is regarded as a major functional area like any other functional areas such
as marketing, finance, production and human resources, etc.
Thus, it is important to understand the functions of an information system just like any other
functional area in business. A well-maintained management information system supports the
organization at different levels.
Definitions of MIS
MIS has more than one definition, some of which are as follows:
1. The MIS is defined as a system which provides information support for decision making in the
organization.
2. The MIS is defined as an integrated system of man and machine for providing the information to
support the operations, the management and the decision making function in the organization.
3. The MIS is defined as a system based on the database of the organization evolved for the purpose of
providing information to the people in the organization.
4. The MIS is defined as a Computer based Information System.
5. 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 management.

1
Objectives of MIS

The goals of a MIS are to implement the organizational structure and dynamics of the enterprise
for the purpose of managing the organization in a better way and capturing the potential of the
information system for competitive advantage. Following are the basic objectives of a MIS:
- Capturing Data: Capturing contextual data, or operational information that will contribute in decision
making from various internal and external sources of organization.
- Processing Data: The captured data is processed into information needed for planning, organizing,
coordinating, directing and controlling functionalities at strategic, tactical and operational level.
Processing data means: making calculations with the data, sorting data, classifying data and
summarizing data.
- Information Storage: Information or processed data need to be stored for future use.
- Information Retrieval: The system should be able to retrieve this information from the storage as and
when required by various users.
- Information Propagation: Information or the finished product of the MIS should be circulated to its
users periodically using the organizational network.

Role of the Management Information System:

The MIS plays these in the organization.

(1) 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 fulfil the information needs of an
individual, a group of individuals, the management functionaries: the managers and the top management.
(2) 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.
(3) The MIS helps the middle management in short them planning, target setting and controlling the
business functions. 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.
(4) The MIS plays the role of information generation, communication, problem identification and helps
in the process of decision making. The MIS, therefore, plays a vital role in the management,
administration and operations of an organization.

2
Role of MIS in improving decision making

Preliminarily, it is inherent to state that decision making is an integral part of any business. This
is because a majority of operations in an organization revolve around decisions made by the management
and other key stakeholders in the organization. And in order for decision to be made adequately, it is
vital for there to be a good information system since decisions are based on information available. In
relation to this, Jahangir (2005) states that based on the significant role that information plays in the
choice of decision to be made, organizations must ensure that they have a good management information
system.
1. MIS normally lays a firm foundation for the establishment of concrete decisions through its systematic
tools, timely information and adequate managerial policies and regulations.
2. Furthermore, Management information Systems’ statutes regarding businesses act as guidelines to
business owners when making critical decisions about their businesses. As a result, managers and key
decision makers are bridled from overstepping their boundaries or exceeding their business mandate.
This is very crucial as it helps in keeping businesses checked and balanced thus ensuring that only proven
decisions are considered while the untried ones are thwarted.
3. In addition, most MIS programs are endowed with the capacity to give real-time updates of the
occurrences in company or system. By real-time, scholars simply refer to immediate updates of
occurrences in a system. These immediate updates help mangers to take necessary actions as soon as is
deemed appropriate—especially during the discovery and management of crises. This augments
progress and improvement in company operations through timely decision making. This is important
for companies in the modern-day generation where any slight lapse indecision making can lead to very
huge losses.
4. Still, MIS are very elemental in improving company securities. For example, in many instances, most
MIS can be easily programmed by the owner to conduct certain actions at certain times. In effect,
managers can program the system to perform certain routine checks which can help in improving
efficiency of a company through easy discovery of bugs or problems.
5. Moreover, the programmability of most MIS saves a lot of priceless time and resources for owners.
In other words, through programmability, business managers can program the systems to automatically
discover certain deficiencies and even solve them. Consequently, the manager or system operator can
use the time and resources he/she would have used in monitoring or fixing problems for other key uses.
By routinely programming a MIS, the business is bound to make positive progress since time and
resources can be easily channelled into rightful business paths.
6. As a fundamental point, a good number of MIS used today can perform multiple tasks all at the same
time. This potential to multitask increases efficiency in a company since several business operations can
be conducted simultaneously. With special regards to decision making, the capacity to multitask ensures
that decisions are made speedily when compared to those systems which can only handle one task at a

3
time. Closely related to the above point, Jahangir (2005) says that some MIS allow multiple users to
access the same content all at the same time without any discrepancies. This potentiality boosts
accountability from the business operators since multiple people can access a particular content and
verify whether they are consistent or whether they are not. As a matter of fact, most organizations tend
to suffer due to poor accountability from those charged with the mandate to manage certain details. This
safeguard action of some MIS is what macroeconomists refer to as the “gate-keeping” role of MIS in
decision making and overall well-being of the organization.
7. Principally, the record keeping and data-basing tool of MIS definitely ensures that decisions are made
viably while businesses run smoothly.
8. MIS is renowned for vesting its operations on systematic methods of operations. Crucially, this
ensures that decisions made in a business are orderly and well-planned—which, in effect, encourages
objectivity during decision making. As a result, businesses and the decision making process are
improved through its systematic and orderly formula of operating.
Characteristics of MIS

Following are the characteristics of an 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.
- 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. 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.
- 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.
Characteristics of Computerized MIS
Following are the characteristics of a well-designed computerized MIS:

4
- It should be able to process data accurately and with high speed, using various techniques like
operations research, simulation, heuristics, etc.
- It should be able to collect, organize, manipulate, and update large amount of raw data of both related
and unrelated nature, coming from various internal and external sources at different periods of time.
- It should provide real time information on ongoing events without any delay.
- It should support various output formats and follow latest rules and regulations in practice.
- It should provide organized and relevant information for all levels of management: strategic,
operational, and tactical.
- It should aim at extreme flexibility in data storage and retrieval.
MIS for a Business Organization:

MIS is important for business organisations in the following ways:

1. Supports the Business Process: Treats inputs as a request from the customer and outputs as services
to customer. Supports current operations and use the system to influence further way of working.
2. Supports Operation of a Business Organization: MIS supports operations of a business organization
by giving timely information, maintenance and enhancement which provides flexibility in the operation
of an organization.
3. To Support Decision Making: MIS supports the decision making by employee in their daily
operations. MIS also supports managers in decision making to meet the goals and objectives of the
organization. Different mathematical models and IT tools are used for the purpose evolving strategies
to meet competitive needs.
4. Strategies for an Organization: Today each business is running in a competitive market. MIS supports
the organization to evolve appropriate strategies for the business to survive in a competitive
environment.
The prerequisites of an effective MIS

For MIS to be effective, the following essential requirements are needed.

(i) A qualified system and management staff: The prerequisite of an effective MIS is that it should be
managed by qualified officers. These officers should have a mutual understanding about the roles and
responsibilities of each other, be able to understand clearly the view of their fellow officers. For this,
each organization should have two categories of officers:
(a) System and Computer Experts who in addition to their expertise in their subject area, they should
also be capable of understanding management concepts to facilitate the understanding of problems asked
by concerned parties. They should also be clear about the process of decision making and information
requirements for planning.

5
(b) Management experts who should also understand quite clearly the concepts and operations of a
computer. This basic knowledge of computers will be useful, will place them in a comfortable position,
while working with systems, in designing of the information system.
(ii) Futuristic perspective: An effective MIS should be capable of meeting the future requirements of
its executives as well. This capability can be achieved by regular monitoring and updating the MIS.
(iii) Support of top management: For a management information system to be effective, it must receive
the full support of top management. The reasons for this are:
(a) Subordinate managers are usually lazy about activities which do not receive the support of their
superiors.
(b) The resources involved in computer based information system are larger and are growing larger and
larger in view of importance gained by management information system.
(iv) Common database: It is an integrated collection of data and information which is utilized by
several information subsystems of an organization. A common database may be defined as a super file
which consolidates and integrates data records formerly stored in a separate data file. Such a database
can be organized as an integrated collection of data records into a single super file or it can be organized
as an integrated collection of several data file.
(v) Control and maintenance of MIS: Control of the MIS means the operation of the system as it was
designed to operate. Sometimes, users develop their own procedures or short cut methods to use the
system which reduces its effectiveness.
Factors influencing the success or failure of MIS

MIS are generally enormously complex, and their selection, design and implementation will
involve dozens of people from both within and outside the organization. The managers and directors
who are ultimately responsible for ensuring the success of the system need to have not only an intimate
knowledge and appreciation of exactly what they want out of the system. They must be aware of the
possibilities that ICT systems can offer, the difficulties that may be encountered and the importance of
having in place the proper procedures to ensure the smooth functioning of the system. The success or
failure of management information systems can be attributed to a number of reasons such as:
1. Adequate/Inadequate analysis: The potential problems, exact needs and constraints are supposed to
be fully understood before the design or selection of a new system begins. So if a proper analysis of
these problems and need is done it means that the implementation of MIS is likely going to be successful
it not it will be a failure.
2. Degree of Management involvement in the design: It is essential that all those expecting and
needing to benefit from a new system especially the managers should be involved in its design. Without
this involvement, any system is doomed to failure either by providing information which nobody needs
(or, worse still, nobody understands) or management having expectations from a new system which

6
cannot be delivered. So the degree of management involvement in the design of MIS will go a long to
enhance the success and vice versa.
3. Emphasis on the computer system: Selecting the right hardware and software is clearly essential as
the basis for a modern computer system but appropriate procedures for handling both data input and
output must be established before a system is implemented. Also the objectives of the new system need
to be clearly thought out to the users. Selecting the right hardware and software and communicating the
objectives of the system effectively to the users will go a long way to enhance the success of the system
otherwise the system is doomed to failure.
4. Concentration on low-level data processing: Having in mind that one of the fundamental functions
of a system within a company is the day-to-day processing of transactions, including sales and purchase
orders, invoices, goods receipts and credit notes and knowing that MIS can also be implanted at this
level to furnish the operation managers with information they need to carry out their day to day activities,
when designing the MIS, it should be in a way that it must be both easily accessible and easily
understandable by users who may be neither computer literate nor managers. If this is done, we can
guarantee the success of the systems because if those at the operational level can carry the activities of
the organization smoothly, then the organization is on a good footing otherwise the system may fail.
5. Management knowledge of ICT systems and their capabilities: Managers require information for
running companies or departments and among other things e.g for producing budgets and forecasts.
Managers must know what they want from a system but it cannot be assumed that these same managers
have a full (or even a slight) grasp of the technology which will provide the information they need. So
a good knowledge of which ICT system to be used and their capacities will help to enhance the success
of a MIS and vice versa.
6. Teamwork: The needs of the accounts department, the marketing department, the sales department
(home and export), and the storage and dispatch departments are all likely to differ and an ICT manager
needs not only to lead his team but also to be able to take on board the whole company’s requirements.
Teamwork needs leadership and a good leader is one who can convince all the members of a company
team that the ICT system being designed is going to meet everybody’s needs . So good team work is
required at the stage from designing to implementation from all the organizational members and the
technicians to ensure the success of this system if not, the system is doom to failure.
7. Lack of professional standards: Clear documentation written in a language that not only the ICT
manager can understand is essential for training, implementation and daily use of a new system.
Operators need to know exactly what to do in their work (including what to do if they need to undo some
action); managers need to feel reassured that, if necessary, explanations are available to help them to
interrogate the system for the information they require, and all people using the system must feel
confident enough to be able to help others. If this is done, then the success of the system is guaranteed
and vice versa.

7
Impact of the MIS

Since the MIS plays a very important role in the organization, it creates an impact on the
organization’s functions, performance and productivity.
1-The impact of MIS on the functions is in its management. With a good support and supply of
information to the various departments, the management of marketing, finance, production, personnel
etc. becomes more efficient. The tracking 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 exceptional in nature, inducing him to take an
action or a decision in the matter. A disciplined information reporting system creates a structured data
and a knowledge 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.

2-MIS creates another impact in the overall performance of Managers which relates to the
understanding of the business itself. MIS begins with the definition of a data entity and its attributes. It
uses a dictionary if data, entity and attributes, respectively, designed for information generation in the
organization. Since all the information system use the dictionary, there is common understanding of
terms and terminology in the organization brining clarity in the communication and a similar
understanding of the organization and as such the performance of the various managers increase and as
a results increases the overall performance of the managers.

Also, MIS calls for a systemization of the business operation for an affective system design. A
well designed system with a focus on the manager makes an impact on the managerial efficiency. The
fund of information motivates an enlightened manger to use a variety of tools of the management. The
use of computers enables him to use various tools techniques which are impossible to use manually.
This makes the execution of their task simpler. So the impact is on the managerial ability to perform
better which improves the decision making ability considerably.
3-MIS also creates an impact on the productivity of workers. Since MIS works on the basic systems
such as transaction processing and databases, the drudgery of the clerical work is transferred to the
computerized system, relieving the human mind for better work. It will be observed that a lot of
manpower is engaged in this activity in the organization. It you study the individual’s time utilization
and its application; you will find that seventy per cent of the time is spent in recording, searching,
processing and communication. This is a large overhead in the organization. The MIS has a direct impact
on this overhead. It creates an information- based work culture in the organization thus increasing the
productivity of workers.

8
Risks associated with MIS

Risk reflects the potential, the likelihood, or the expectation of events that could adversely affect
earnings or capital. Some of the risk associated to MIS can be outlined as follows;
1. In case of no backups, virus can attack the system and all the information needed by the organization
to function smoothly can be lost and this may put the organization in a frustrating situation. So all
business organization must endeavour to safeguard their data in order to avoid this.
2. In case of power failure and in the case where the organization does not have a standby generator, it
becomes very difficult for the organization to operate. So all business organization using a computerized
system most put in place a standby generator to avoid suffering from the effects of power failure
3. Additionally, poorly programmed or non-secure systems may give room for data manipulation of data
theft. This will affect the company adversely.
4. Furthermore, systems requiring ongoing repairs can easily disrupt routine work flow and can lead to
incorrect decisions or impaired planning.
5. Also, in case where MIS captures and processes data not in accordance with the organization’s needs,
when the Management uses MIS to help in the assessment of risk within an institution, it means that the
Management decisions will be based upon ineffective, inaccurate, or incomplete information. This will
increase the risk in a number of areas such as credit quality, liquidity, market/pricing, interest rate, or
foreign currency.
6. Moreover, a flawed MIS causes operational risks and can adversely affect an organization's
monitoring of its fiduciary, consumer, fair lending, Bank Secrecy Act, or other compliance-related
activities. Since management requires information to assess and monitor performance at all levels of the
organization, MIS risk can extend to all levels of the Management.
Assessing vulnerability to MIS risk

To function effectively as an interacting, interrelated, and interdependent feedback tool for

management and staff, MIS must be “useable”. The five elements of a useable MIS system are:
timeliness, accuracy, consistency, completeness, and relevance. The usefulness of MIS is hindered
whenever one or more of these elements are compromised.
Timeliness: To simplify prompt decision making, an institution's MIS should be capable of providing
and distributing current information to appropriate users. Information systems should be designed to
expedite reporting of information. The system should be able to quickly collect and edit data, summarize
results, and be able to adjust and correct errors promptly.
Accuracy: A sound system of automated and manual internal controls must exist throughout all
information systems processing activities. Stored information should receive appropriate editing,
balancing, and internal control checks. A comprehensive internal and external audit program should be
employed to ensure the adequacy of internal controls.

9
Consistency: To be reliable, data should be processed and compiled consistently and uniformly.
Variations in how data is collected and reported can distorting formation and trend analysis. In addition,
because data collection and reporting processes will change over time, management must establish
sound procedures to allow for systems changes. These procedures should be well defined and
documented, clearly communicated to appropriate employees, and should include an effective
monitoring system.
Completeness: Decision makers need complete and pertinent information in a summarized form.
Reports should be designed to eliminate clutter and voluminous detail, thereby avoiding “information
overload.”
Relevance: Information provided to management must be relevant. Information that is in appropriate,
unnecessary, or not too detailed for effective decision making has no value. MIS must be appropriate to
support the management level using it. The relevance and level of detail provided through MIS systems
directly correlate to what is needed by the board of directors, executive management, departmental or
area mid-level managers, etc. in the performance of their jobs.

Given the limitations of an information system like the MIS in supporting non programmed
decisions, information system designers need to look at the problem from a completely different angle.
Rather than being structured from the perspective of the person who interprets predetermined
information needs, the information system should be conceived to give the greatest possible flexibility
to the decision maker. The company database must be flexible enough to be structured according to the
particular needs of different decision-makers. This reveals the need for more interactive systems like
DSS that help the decision maker to take non-structured or only slightly structured decisions.

SAQs:

1. What are the effects of a successful MIS on the performance of a business organisation?
2. How does a MIS improve in decision making?
3. What are the requirements for a MIS to be effective?

10