Session 1. Management information systems

Session guide: Management information systemsReading note: Management information systemsReferences

DATETIMEFORMAT Plenary participatory lectureTRAINER

OBJECTIVES

At the end of this session, participants should be able to understand and appreciate:

1.Principles and elements of MIS2.The relationship between organizational structure and MIS3.Information requirements for MIS4.Different types of MIS5.The process of developing a MIS6.Criteria for MIS7.Strategies for determining MIS design

INSTRUCTIONAL MATERIALS

Exhibit 1 Management information systemsExhibit 2 MIS elementsExhibit 3 Steps in planningExhibit 4 Requirements during the planning processExhibit 5 ControllingExhibit 6 Requirements for controllingExhibit 7 Decision makingExhibit 8 SystemExhibit 9 Perceiving the systemExhibit 10 Basic parts of the organizationExhibit 11 Why a systems approachExhibit 12 InformationExhibit 13 MIS as a pyramid structureExhibit 14 Conceptual basis of MIS

Exhibit 15 Implications of the organizational structure for MISExhibit 16 Information requirements for MISExhibit 17 Strategies for determining information requirementsExhibit 18 Strategy for determining data requirementsExhibit 19 Types of MISExhibit 20 The MIS processExhibit 21 MIS criteriaExhibit 22 Strategies for determining MIS design

REQUIRED READING

Reading note: Management information systems

BACKGROUND READING

None.

SPECIAL EQUIPMENT AND AIDS

Overhead projector and chalkboard

Session guide: Management information systems

Show EXHIBIT 1. Define and discuss what a management information system (MIS) is, and how it helps an organization. Identify elements of MIS: management, system and information (EXHIBIT 2). Each of these should be discussed individually. Management information is an important input for efficient performance of various managerial functions at different organization levels. The information system facilitates decision making. Management functions include planning, controlling and decision making. Show EXHIBIT 3 and discuss various steps in planning. Using EXHIBIT 4, discuss the basic requirements for information during the planning process, and emphasize their importance. Controlling compels events to conform to plans. It includes setting performance standards, measuring performance against those standards, and correcting deviations (EXHIBIT 5). Show EXHIBIT 6 and discuss the information requirements for the controlling function. Decision making is the core of management and aims at selecting the best alternative to achieve an objective. The decisions may be strategic, tactical or technical (EXHIBIT 7). Strategic decisions are characterized by uncertainty. They are future oriented and relate directly to planning activity. Tactical decisions cover both planning and controlling. Technical decisions pertain to implementation of specific tasks through appropriate technology. The elements of decision making include the model, criteria, constraints and optimization. A model is a quantitative-cum-qualitative description of a problem. Criteria relate to methods for achieving goals. Constraints are the limiting factors. Once the decision problem is fully described in a model, criteria stipulated and constraints identified, the decision-maker can select the best alternative. That is optimization.

Show EXHIBIT 8. Define and discuss the concept of a system. Observe that modern management is based upon the systems approach, which views an organization as a system of mutually dependent variables and composed of a set of interrelated sub-systems. This interrelationship is a fundamental concept in the systems approach to management. Show

EXHIBIT 9 and discuss how a system can be perceived. The basic elements of the organization include the individual, the formal and informal organization, patterns of behaviour, role perception, and the physical environment (EXHIBIT 10). Show EXHIBIT 11 and discuss the relevance of the systems approach in the design of an MIS. MIS aims at inter-relating, coordinating and integrating different sub-systems by providing information to facilitate and enhance the working of the sub-systems and achieve synergism.

Show EXHIBIT 12. Define information in generic terms as well as in the context of different levels of decision making. Note that all data are not necessarily information. The value of management information lies in its content, form and timing of presentation. Discuss the role of the information system in linking different components of the organization through integration, communication and decision making. Integration aims at ensuring that different sub-systems work together towards the common goal. Coordination and integration are essential controlling mechanisms to ensure smooth functioning in the organization. Communication is a basic element of organizational structure and functioning to integrate different sub-systems at different levels to achieve organizational goals. Information is generated in the organizational structure. Show EXHIBIT 13. Information requirements are different at all levels of the organization. As information flows from bottom to top, it becomes more and more focused as a result of capsulization and concretization. In contrast, information becomes increasingly diffuse as it flows from top to bottom. Since the information system is specific to an organization, organizational structure and behaviour have to be explicitly considered in designing an MIS (EXHIBIT 14). Show EXHIBIT 15 and discuss the implications of various characteristics of the organizational structure when designing an MIS. Refer to Table 1 in the Reading note in discussing these implications.

Show EXHIBIT 16 and discuss information requirements for MIS. It is important to consider carefully the information needs of the organization at different levels of the hierarchy. Strategies for determining information requirements should be discussed in the context of EXHIBIT 17. This discussion can be continued using EXHIBIT 18, in which a step-by-step strategy for determining data requirements is suggested.

An MIS can be a data bank, predictive, decision making or decision taking system. Discuss each of these in the context of EXHIBIT 19. Show EXHIBIT 20 and discuss the MIS process. As already discussed earlier, the MIS design team should first establish management information needs and clearly establish the system's design objectives. The important decision making areas should be identified, and within them the management decision areas delineated. Information needs at each of these levels have to be appreciated in the context of defined roles. A crude description of the system could then be developed and subsequently refined with more precise specifications. An MIS should be based on a few databases related to different sub-systems of the organization, for efficient management of information processing, the MIS should be tested and closely monitored to ensure that all critical data are captured.

Any MIS should be relevant to the individual decision-maker. It should provide up-to-date and accurate information to facilitate decision making. It should enable management to anticipate change. An MIS cannot be static in the face of the changing environment. As the environment changes, decision making changes and hence the information requirements change also (EXHIBIT 21).

Show EXHIBIT 22 and discuss the six strategies determining MIS design. The organization-chart approach is based on traditional functional areas defining current organizational boundary and structure. MIS evolves on its own in a laissez faire manner in the integrate-later approach. The data-collection approach involves collection and classification of all the relevant data for future use. In the database approach, a large pool of data is collected and stored for future use. The top-down approach involves defining the information needs for successive layers of management. The total-system approach involves collection, storage and processing of data within the total system.

EXHIBIT 1

MANAGEMENT INFORMATION SYSTEMSDefinition

"An integrated user-machine system for providing information to support operations, management and decision making functions in an organization. The system utilizes computerized and manual procedures; models for analysis, planning, control and decision making; and a database."

Based on: Davis, G.B. 1985. MIS: Conceptual Foundations. Structure and Development. 2nd ed. New York, NY: McGraw-Hill.MIS principal concerns

Facilitate decision making by supplying the information needed in an up-to-date and accurate form

to the people who need it on time in a usable form

EXHIBIT 2

MIS ELEMENTSManagement functions

PlanningControlling

Decision makingInformation system

Management information

EXHIBIT 3

STEPS IN PLANNING1. Selecting objectives2. Identifying activities required to achieve the stipulated objectives3. Describing the resources or skills, or both, necessary to perform the activities4. Defining the duration of each activity to be undertaken5. Determining the sequence of the activities

Source: Kumar, S. 1989. Management Information System. New Delhi: Ashish Publishing.

EXHIBIT 4

REQUIREMENTS DURING THE PLANNING PROCESS1. Supplying the information needed by the planner at each step

2. Establishing procedures for procuring the information at each step (including the means to view alternatives)

3. Arranging for storage of the approved plans as information for the control process

4. Devising an efficient method for communicating the plans to other members in the organization

Source: Kumar, S. 1989. Management Information System. New Delhi: Ashish Publishing.

EXHIBIT 5

CONTROLLING

Controlling involves

1. Establishing standards of performance in order to reach the objective2. Measuring actual performance against the set standards3. Correcting deviations to ensure that actions remain on course

Source: Murdick, R.G., and Ross, J.E. 1975. Information Systems for Modern Management. Englewood Cliffs, NJ: Prentice-Hall.

EXHIBIT 6

REQUIREMENTS FOR CONTROLLING1. Defining expectations in terms of information attributes2. Developing the logic for reporting deviations to all levels of management prior to the actual occurrence of the deviation

Source: Murdick, R.G., and Ross, J.E. 1975. Information Systems for Modem Management. Englewood Cliffs, NJ: Prentice-Hall.

EXHIBIT 7

DECISION MAKING

Levels of decision making

Strategic Tactical Technical

Elements of decision making

Model Constraints Optimization

Source: Gorry, G., and Scott Morton, M.S. 1971. A framework for management information system. Sloan Management Review. Fall 1971.

EXHIBIT 8

SYSTEM

"A set of elements forming an activity or a procedure/scheme seeking a common goal or goals by operating on data and/or energy and/or matter in a time reference to yield information and/or energy and/or matter."

Source: Hopkins, R.C. et al. A systematic Procedure for System Development: Systems Philosophy. Englewood Cliffs, NJ: Prentice-Hall

EXHIBIT 9

PERCEIVING THE SYSTEM1. Some components, functions and processes performed by these various components

2. Relationships among the components that uniquely bind them together into a conceptual assembly which is called a system

3. An organizing principle which is an overall concept that gives it a purpose

4. The fundamental approach of the system is the interrelationship of the sub-systems of the organization

Source: Albrecht, K. 1983. New systems view of the organization. In: Organization Development. Englewood Cliffs, NJ: Prentice-Hall.

EXHIBIT 10

BASIC PARTS OF THE ORGANIZATION1. The individual2. The formal and informal organization3. Patterns of behaviour arising out of role demands of the organization4. The role perception of the individual5. The physical environment in which individuals work

EXHIBIT 11

WHY A SYSTEMS APPROACH

Developing and managing operating systems (e.g., money flows, manpower systems) Designing an information system for decision making Systems approach and MIS MIS aims at interrelating, coordinating and integrating different sub-systems by providing information required to facilitate and enhance the working of the sub-systems and achieve synergistic effects

Source: Murdick, R.G., and Ross, J.E. 1975. Information Systems for Modem Management. Englewood Cliffs, NJ: Prentice-Hall.

EXHIBIT 12

INFORMATION

'A set of classified and interpreted data used in the decision making process"

Source: Lucas, H., Jr. 1978. Information Systems Concepts for Management. New York, NY: McGraw-Hill.

Information has also been defined as some tangible entity which serves to reduce uncertainty about future state or events

In the context of different levels of decision making, information can be described as:

source

data

inference and predictions drawn from the data

value and choices (evaluation of inferences with regard to the objectives, and then choosing courses of action)

action which involves a course of action

The value of management information lies in its content, form and timing of presentation

EXHIBIT 13

MIS AS A PYRAMIDAL STRUCTURE

EXHIBIT 14

CONCEPTUAL BASIS OF MIS1. Concepts of organization

2. Organizational theories, principles, structure, behaviour and processes such as communication, power and decision making

3. Motivation and leadership behaviour

EXHIBIT 15

IMPLICATIONS OF THE ORGANIZATIONAL STRUCTURE FOR MIS

Concepts:

Hierarchy of authority Specialization Formalization Centralization Modification of the basic model Information model of organization Organizational culture Organizational power Organizational growth cycle Goal displacement Organizational learning Project model of organizational change Case for stable system Systems that promote organizational change Organizations as socio-technical systems

Source: Davis, G., and Olson, M.H. 1984. Management Information Systems: Conceptual Foundation, Structure and Development. New York, NY: McGraw-Hill.

EXHIBIT 16

INFORMATION REQUIREMENTS FOR MIS1. Assessing information requirements2. Levels of information requirements Organizational level Application level Technical Database

Source: Davis, G., and Olson, M.H. 1984. Management Information Systems: Conceptual Foundation, Structure and Development. New York, NY: McGraw-Hill.

EXHIBIT 17

STRATEGIES FOR DETERMINING INFORMATION REQUIREMENTS

1. Asking2. Deriving from an existing information system3. Synthesizing from characteristics of the utilizing system4. Discovering from experimentation with an involving information system

Source: Davis, G.B. 1982. Strategies for information requirements determination. IBM Systems Journal, 21(1): 4-31.

EXHIBIT 18

STRATEGY FOR DETERMINING DATA REQUIREMENTS1. Identify elements in the development process utilizing system: Information systems or applications Users Analysts

2. Identify process uncertainties:

Existence and availability of a set of usable requirements Ability of users to specify requirements Ability of analysts to elicit and evaluate requirements

3. Evaluate the effects of elements in the development process over process uncertainties4. Evaluate the combined effects of the process uncertainties on overall requirements uncertainty5. Select a primary strategy for requirements determination based on the overall requirements uncertainty

Uncertainty level Strategy Low Asking or deriving from an existing system

Synthesis from characteristics of utilizing systems High Discovering from experimentation

6. Select one or more from the set of methods to implement the primary strategy

Source: Davis, G.B. 1985. Management Information Systems: Conceptual Foundation, Structure and Development. New York, NY: McGraw-Hill.

EXHIBIT 19

TYPES OF MIS1. Databank information system2. Predictive information system3. Decision making information system4. Decision taking information system

EXHIBIT 20

THE MIS PROCESS1. Understand the organization2. Analyse the organization's information requirements3. Plan overall strategy4. Review5. Preliminary analysis6. Feasibility assessment7. Detailed fact finding8. Analysis9. Design10. Development11. Cutover12. Obtain conceptual schema13. Recruit database administrator14. Obtain logical schema15. Create data dictionary16. Obtain physical schema17. Create database18. Modify data dictionary19. Develop sub-schemas20. Modify database21. Amend database

Source: Crowe, T., and Avison, D.E. 1982. Management Information from Databases. London: Macmillan.

EXHIBIT 21

MIS CRITERIA Relevance Management by exception Accuracy Adaptability

EXHIBIT 22

STRATEGIES FOR DETERMINING MIS DESIGN Organization-chart approach Integrate-later approach Data-collection approach Database approach Top-down approach

Source: Blumenthal, S.C. 1990. Management Information Systems: A Framework for Planning and Control. Englewood Cliffs, NJ: Institute of Personnel Management.

Reading note: Management information systems

Information and the MIS conceptManagement and the MIS processSystems approachOrganizational structure and MISInformation requirements for MISTypes of MISProcess of MISCriteria for MISStrategies for determining MIS design

Information and the MIS concept

Information is a set of classified and interpreted data used in decision making. It has also been defined as 'some tangible or intangible entity which serves to reduce uncertainty about future state or events' (Lucas, 1978). A management information system (MIS) is 'an integrated user-machine system for providing information to support operations, management and decision making functions in an organization. The system utilizes computers, manual procedures, models for analysis, planning, control and decision making, and a database' (Davis and Olson, 1984). MIS facilitates managerial functioning. Management information is an important input at every level in the organization for decision making, planning, organizing, implementing, and monitoring and controlling. MIS is valuable because of its content, form and timing of presentation. In the context of different levels of decision making, information can be described as:

source,

data,

inferences and predictions drawn from data,

value and choices (evaluation of inferences with regard to the objectives and then choosing a course of action), and

action which involves course of action.

The MIS concept comprises three interrelated and interdependent key elements: management, system and information (Murdick and Ross, 1975).

Management and the MIS process

An MIS is directed towards the managerial functions of planning, controlling and monitoring, and decision making.

Planning

Planning consists of five sequential and interactive steps (Kumar, 1989). These are:

selecting objectives; identification of the activities which are required to achieve the stipulated objectives; detailing the resources - including the various skills - required to undertake the activities; determining the duration of each activity to be performed; and defining the sequence of the activities.

The basic requirements during the planning process of most importance in designing and implementing an MIS for an organization are (Kumar, 1989):

providing the information required by the planner at each step of planning;

establishing procedures for obtaining the information;

arranging for storage of the approved plans, as these will provide the information requisite to monitoring and controlling; and

evolving methods for communicating the plans to employees in the organization.

Monitoring and controlling

Controlling 'compels events to conform to plans' (Murdick and Ross, 1975). It involves:

establishing standards of performance in order to reach the objective; measuring actual performance against the set standards; and keeping actions on course by correcting deviations as they appear (mid-course corrections).

The requirements for successful development of a control system are:

defining expectations in terms of information attributes; and developing the logic for reporting deviations to all levels of management prior to the actual occurrence of the deviation.

Decision making

Decision making is the process of selecting the most desirable or optimum alternative to solve a problem or achieve an objective. The quality and soundness of managerial decisions is

largely contingent upon the information available to the decision-maker. Gorry and Scott Morton (1971) classified decision making on three levels of a continuum:

Strategic decisions are future-oriented because of uncertainty. They are part of the planning activity.

Tactical decision making combines planning activities with controlling. It is for short-term activities and associated allocation of resources to them to achieve the objectives.

Technical decision making is a process of ensuring efficient and effective implementation of specific tasks.

Elements of decision making

The four components of the decision making process are (Burch and Strater, 1974):

Model A model is an abstract description of the decision problem. The model may be quantitative or qualitative.

Criteria The criteria must state how goals or objectives of the decision problem can be achieved. When there is a conflict between different criteria, a choice has to be made through compromise.

Constraints. Constraints are limiting factors which define outer limits and have to be respected while making a decision. For example, limited availability of funds is a constraint with which most decision makers have to live.

Optimization Once the decision problem is fully described in a model, criteria for decision making stipulated and constraints identified, the decision-maker can select the best possible solution.

Systems approach

Modern management is based upon a systems approach to the organization. The systems approach views an organization as a set of interrelated sub-systems in which variables are mutually dependent. A system can be perceived as having:

some components, functions and the processes performed by these various components;

relationships among the components that uniquely bind them together into a conceptual assembly which is called a system; and

an organizing principle that gives it a purpose (Albrecht, 1983).

The organizing system has five basic parts, which are interdependent (Murdick and Ross, 1975). They are:

the individual; the formal and informal organization; patterns of behaviour arising out of role demands of the organization;

the role perception of the individuals; and the physical environment in which individuals work.

The interrelationship of the sub-systems within an organization is fundamental to the systems approach. The different components of the organization have to operate in a coordinated manner to attain common organizational goals. This results in synergic effects. The term synergy means that when different sub-systems work together they tend to be more efficient than if they work in isolation (Murdick and Ross, 1975). Thus, the output of a system with well integrated sub-systems would be much more than the sum of the outputs of the independent sub-systems working in isolation.

The systems approach provides a total view of the organization. It enables analysis of an organization in a scientific manner, so that operating management systems can be developed and an appropriate MIS designed (Murdick and Ross, 1975).

By providing the required information, an MIS can help interrelate, coordinate and integrate different sub-systems within an organization, thus facilitating and increasing coordinated working of the sub-systems, with consequent synergism. The interaction between different components of the organization depends upon integration, communication and decision making. Together they create a linking process in the organization.

Integration ensures that different sub-systems work towards the common goal. Coordination and integration are useful controlling mechanisms which ensure smooth functioning in the organization, particularly as organizations become large and increasingly complex. As organizations face environmental complexity, diversity and change, they need more and more internal differentiation, and specialization becomes complex and diverse. The need for integration also increases as structural dimensions increase.

Communication integrates different sub-systems (specialized units) at different levels in an organization. It is thus a basic element of the organizational structure necessary for achieving the organization's goals.

Organizational structure and MIS

MIS has been described as a pyramidal structure, with four levels of information resources. The levels of information would depend upon the organizational structure. The top level supports strategic planning and policy making at the highest level of management. The second level of information resources aid tactical planning and decision making for management control. The third level supports day-to-day operations and control. The bottom level consists of information for transaction processing. It then follows that since decision making is specific to hierarchical levels in an organization, the information requirements at each level vary accordingly.

Thus, MIS as a support system draws upon:

concepts of organization;

organizational theories, principles, structure, behaviour and processes such as communication, power and decision making; and

motivation and leadership behaviour.

Davis and Olson (1984) analysed the implications of different characteristics of the organizational structure on the design of information systems (Table 1).

Information requirements for MIS

Assessing information needs

A first step in designing and developing an MIS is to assess the information needs for decision making of management at different hierarchical levels, so that the requisite information can be made available in both timely and usable form to the people who need it. Such assessment of information needs is usually based on personality, positions, levels and functions of management. These determine the various levels of information requirements.

Table 1 Organizational structural implications for information systems

Concept Implications for Information SystemsHierarchy of authority A tall hierarchy with narrow span of control requires more formal

control information at upper levels than a flat hierarchy with wide span of control.

Specialization Information system applications have to fit the specialization of the organization.

Formalization Information systems are a major method for increasing formalization.Centralization Information systems can be designed to suit any level of centralization.Modification of basic model

Information systems can be designed to support product or service organizations, project organizations, lateral relations and matrix organizations.

Information model of organization

Organizational mechanisms reduce the need for information processing and communication. Vertical information systems are an alternative to lateral relations. Information systems are used to coordinate lateral activities.

Organizational culture Organizational culture affects information requirements and system acceptance.

Organizational power Organizational power affects organizational behaviour during information system planning, resource allocation and implementation. Computer systems can be an instrument of organizational power through access to information.

Organizational growth The information system may need to change at different stages of growth.

Goal displacement When identifying goals during requirements determination, care should be taken to avoid displaced goals.

Organizational learning

Suggests need for information system design for efficiency measures to promote single loop learning and effectiveness measures for double loop learning.

Project model of organizational change

Describes general concepts for managing change with information system projects.

Case for stable system Establish control over frequency of information system changes.

Systems that promote organizational change

Reporting critical change variables, organizational change, or relationships, and use of multiple channels in a semi-confusing system may be useful for promoting responses to a changing environment.

Organizations as socio-technical systems

Provides approach to requirements determination and job design when both social and technical considerations are involved.

Source: Taken from Gordon and Olson, 1984: 358-359.

Levels of information requirements

There are three levels of information requirements for designing an MIS (Davis and Olson 1984). They are:

At the organizational level, information requirements define an overall structure for the information system and specific applications and database.

Application level requirements include social or behavioural - covering work organization objectives, individual roles and responsibility assumptions, and organizational policies - and technical, which are based on the information needed for the job to be performed. A significant part of the technical requirement is related to outputs, inputs, stored data, structure and format of data and information processes.

At the user level, database requirements can be classified as perceived by the user or as required for physical design of the database.

Strategies for determining information requirements

Gordon and Olson (1984) suggested six steps in selecting a strategy and method for determining information requirements (Table 2).

Table 2 Strategies for determining information requirements

1. Identify elements in the development process Utilizing systems Information system or application Users Analysis2. Identify characteristics of the four elements (in 1, above) in the development process which could affect uncertainty in the information requirements.3. Identify the process uncertainties Existence and availability of a set of usable requirements. Ability of users to specify requirements. Ability of the analyst to elicit and evaluate information requirements.Assess how the characteristics of the four elements in the development process (listed under 1, above) will affect the these process uncertainties.4. Determine how the overall requirements uncertainties would be affected by the combined effects of the process uncertainties.5. Considering the overall requirements uncertainty, choose a primary strategy for information requirements.

If uncertainty is low, then the strategy should be to: Ask the users what their requirements are. This presupposes that the users are able to structure their requirements and express them objectively. Asking can be done through- questions, which may be closed or open,- brainstorming sessions, totally open or guided, and- group consensus as aimed at in Delphi methods and group norming. Wherever there are close similarities in the organization and easy replication is possible, information requirements can be derived from the existing system. Characteristics of the utilizing system should be analysed and synthesized. This is particularly useful if the utilizing system is undergoing change.If uncertainty is high, discover from experimentation by instituting an information system and learning through that the additional information requirements. This is 'prototyping' or 'heuristic development' of an information system.6. Select an appropriate method.Source: Davis and Olson, 1984: 488-493.

Types of MIS

MIS can be categorized (Mason, 1981) as follows:

Databank information systems refer to creation of a database by classifying and storing data which might be potentially useful to the decision-maker. The information provided by the databank is merely suggestive. The decision-maker has to determine contextually the cause and effect relationships. MIS designs based on the databank information system are better suited for unstructured decisions.

Predictive information systems provide source and data along with predictions and inferences. The decision-maker can also enquire as to 'what if a certain action is taken?' and whether the underlying assumptions are true. This type of MIS is useful for semi-structured decisions.

Decision-making information systems provide expert advice to the decision-maker either in the form of a single recommended course of action or as criteria for choice, given the value system prevailing in the organization. The decision-maker has just to approve, disapprove or modify the recommendation. Decision-making information systems are suitable for structured decisions. Operations research and cost-effectiveness studies are examples of decision-making information systems.

Decision-taking information systems integrate predictive information and decision-making systems.

Process of MIS

The MIS implementation process (Table 3) involves a number of sequential steps (Murdick and Ross, 1975):

1. First establish management information needs and formulate broad systems objectives so as to delineate important decision areas (e.g., general management, financial management or human resources management). Within these decision areas there will be factors relevant to the management decision areas, e.g., general management will be concerned about its

relationship with the managing board, institute-client relationships and information to be provided to the staff. This will then lead the design team to ask what information units will be needed to monitor the identified factors of concern. Positions or managers needing information for decision making will be identified.

2. Develop a general description of a possible MIS as a coarse design. This design will have to be further refined by more precise specifications. For efficient management of information processing, the MIS should be based on a few databases related to different sub-systems of the organization.

3. Once the information units needed have been determined and a systems design developed, decide how information will be collected. Positions will be allocated responsibility for generating and packaging the information.

4. Develop a network showing information flows.

5. Test the system until it meets the operational requirements, considering the specifications stipulated for performance and the specified organizational constraints.

6. Re-check that all the critical data pertaining to various sub-systems and for the organization as a whole are fully captured. Ensure that information is generated in a timely manner.

7. Monitor actual implementation of the MIS and its functioning from time to time.

Table 3 Methodology for implementing MIS

1. Understand the organization2. Analyse the information requirements of the organization3. Plan overall strategy4. Review5. Preliminary analysis6. Feasibility assessment7. Detailed fact finding8. Analysis9. Design10. Development11. Cutover12. Obtain conceptual schema13. Recruit database administrator14. Obtain logical schema15. Create data dictionary16. Obtain physical schema17. Create database18. Modify data dictionary19. Develop sub-schemas20. Modify database21. Amend databaseAdapted from Crowe and Avison, 1982.

Criteria for MIS

Crowe and Avison (1982) suggested five criteria for an MIS:

Relevance Information should be relevant to the individual decision-makers at their level of management.

Management by exception Managers should get precise information pertaining to factors critical to their decision making.

Accuracy The database from which information is extracted should be up-to-date, contextually relevant and validated.

Timeliness The information should be provided at the time required.

Adaptability The information system should have an in-built capability for re-design so that it can suitably adapt to environmental changes and changing information requirements.

Strategies for determining MIS design

MIS design should be specific to an organization, respecting its age, structure, and operations.

Six strategies for determining MIS design have been suggested by Blumenthal (1969):

Organization-chart approach Using this approach, the MIS is designed based on the traditional functional areas, such as finance, administration, production, R&D and extension. These functional areas define current organizational boundaries and structure.

Integrate-later approach Largely a laissez faire approach, it does not conform to any specified formats as part of an overall design. There is no notion of how the MIS will evolve in the organization. Such an MIS becomes difficult to integrate. In today's environment - where managers demand quick and repeated access to information from across sub-systems - the integrate-later approach is becoming less and less popular.

Data-collection approach This approach involves collection of all data which might be relevant to MIS design. The collected data are then classified. This classification influences the way the data can be exploited usefully at a later stage. The classification therefore needs to be done extremely carefully.

Database approach A large and detailed database is amassed, stored and maintained. The database approach is more and more accepted for two main reasons: first, because of data independence it allows for easier system development, even without attempting a complete MIS; and, second, it provides management with immediate access to information required.

Top-down approach The top-down approach involves defining the information needs for successive layers of management. If information required at the top remains relatively stable in terms of level of detail, content and frequency, the system could fulfil MIS requirements (Zani, 1970). The usefulness of this approach depends on the nature of the organization. It can be suitable for those organizations where there is a difference in the type of information required at the various levels.

Total-system approach In this approach the interrelationships of the basic information are defined prior to implementation. Data collection, storage and processing are designed and done within the framework of the total system. This approach can be successfully implemented in organizations which are developing.

References

Albrecht, K. 1983. A new systems view of the organization. in: Organization Development. Englewood Cliffs, NJ: Prentice-Hall.

Bee, R., & Bee, F. 1990. Management Information Systems and Statistics. [Management Studies Series] London: Institute of Personnel Management.

Blumenthal, S.C. 1969. Management Information System: A Framework for Planning and Control. Englewood Cliffs, NJ: Prentice-Hall.

Burch, J.G., Jr., & Strater, F.R., Jr. 1979. Information Systems: Theory and Practice. New York, NY: John Wiley.

Crowe, T., & Avison, D.E. 1982. Management Information from Databases. London: Macmillan.

Davis, G.B. 1982. Strategies for information requirements determination. IBM Systems Journal, 21 (1): 4-31.

Davis, G.B., & Olson, M.H. 1984. Management Information Systems: Conceptual Foundations, Structure and Development. 2nd ed. New York, NY: McGraw-Hill.

Gorry, G., & Scott Morton, M.S. 1971. A framework for management information systems. Sloan Management Review, Fall 1971.

Hopkins, R.C. et al., 1962. A Systematic Procedure for System Development: Systems Philosophy. Englewood Cliffs, NJ: Prentice-Hall.

Kumar, H. 1989. Management Information Systems: A Conceptual and Empirical Approach. New Delhi: Ashish Publishing House.

Lucas, H.C., Jr. 1978. Information Systems Concepts for Management. New York, NY: McGraw-Hill.

Mason, R.O. 1981. Basic concepts for designing management information systems. In: Mason, R.O., & Swanson, E.B. (eds) Measurements for Management Decision. Philippines: Addison-Wesley.

Mehra, B.K. 1982. Putting management back into MIS. pp. 41-50, in: Keen, G.W. (ed) Perspectives on Information Management. New York, NY: John Wiley.

Murdick, R.G., & Ross, J.E. 1975. Information Systems for Modern Management. Englewood Cliffs, NJ: Prentice-Hall.

Zani, W.M. 1970. Blueprint for management information system. Harvard Business Review, November-December 1970.

PLANNING, DESIGNING AND IMPLEMENTATION OF MIS

Planning of Information Systems

a) Development of Long Range Plans of the MISMany organizations have purchased computers for data processing and for meeting the statutory requirements of filing the returns and reports to the Government. Computers are used mainly for computing and accounting the business transactions and have not been considered as a tool for information processing. The organizations have invested on computers and expanded its use by adding more or bigger computers to take care of the numerous transactions in the business. In this approach, the information processing function of the computers in the organization never got its due regard as an important asset to the organization. In fact, this function is misinterpreted as data processing for expeditious generation of reports and returns, and not as information processing for management actions and decisions. However, the scene has been changing since late eighties when the computers became more versatile, in the function of Storage, Communications, Intelligence and Language. The computer technology is so advanced that the barriers of storage, distance understanding of language and speed are broken.The computers have become user-friendly. They can communicate to any distance and hare data, information and physical resources of other computers. Computers can now be used as a tool for information processing and communication. It can be used for storing large database or knowledgebase. It can be used for knowing the current status of any aspect of the business due to its online real time processing capability. With the advancement of computer technology more popularly known as information technology, it is now possible to recognize information as a valuable resource like money and capacity. It is necessary to link its acquisition, storage, use, and disposal as per the business needs for meeting the business objectives. Such a broad based activity can be executed only when it is conceived as a system. This system should deal with management information and not with data processing alone. It should provide support for management planning, decision making and action. It should support the needs of the lower management as well as that of the top management. It should satisfy the needs of different people in the organization at different levels having varying managerial capabilities. It should provide support to the changing needs of business management. In short, we need a Management Information System flexible enough to deal with the changing information needs of the organization. It should be conceived as an open system continuously interacting with the business environment with a built-in mechanism to provide the desired information as per the new requirements of the management. The designing of such an open system is a complex task. It can be achieved only if the MIS is planned, keeping in view, the plan of the business management of the organization. The plan of MIS is consistent to the business plan of the organization. The information needs for the implementation of the business plan should find place in the MIS. To ensure such an alignment possibility, it is necessary that the business plan – strategic or otherwise, states the information needs. The information needs are then traced to the source data and the systems in the organization which generate such a data. The plan of development of the MIS is linked with the steps of the implementation in a business development plan. The system of information generation is so planned that strategic information is provided for the strategic planning, control information is provided for a short term planning and execution. The details of information are provided to the operations management to assess the status of an activity and to find ways to make up, if necessary. Once the management needs are translated into information needs, it is left to the designer to evolve a plan of MIS development and implementation.

b) Contents of the MIS PlanA long range MIS plan provides direction for the development of the systems, and provides a basis for achieving the specific targets or tasks against a time frame. The plan would have contents which will be dealt by the designer under a support from the top management.

C) MIS Goals and ObjectivesIt is necessary to develop the goals and objectives for the MIS which will support the business goals. The MIS goals and objectives will consider management philosophy, policy constraints, business risks, internal and external environment of the organization and the business. The goals and the objectives of the MIS would be so stated that they can be measured. The typical statements of the goals are as under:

o It should provide online information on the stock, markets and the accounts balances.o The query processing should not exceed more than three seconds.o The focus of the system will be on the end user computing and access facilities.

Such statements of the goals and objectives enable the designer to set the direction and design implementation strategies for the MIS Plan.

Strategy for the Plan AchievementThe designer has to take a number of strategic decisions for the achievement of the MIS goals and objectives. They are:a) Development strategy: An online, a batch, a real time technology platform.b) System development strategy: Any approach to the system development – Operational vs. Functional; Accounting vs. Analysis; Database vs. Conventional approach; Distributed vs. Decentralized processing; One Database vs. multiple databases SSAD vs. OOTc) Resources for system development: In house vs. external, customized development vs. the use of packages.d) Manpower composition: Analyst, programmer skills and knowhow.The Architecture of the MISThe architecture of the MIS plan provides a system structure and their input, output and linkages. It also provides a way to handle the systems or subsystems by way of simplification, coupling and decoupling of subsystems. It spells out in detail the subsystems from the data entry to processing, analysis to modeling, and storage to printing.The System Development ScheduleA schedule is made for the development of the system. While preparing the schedule due consideration is given to the importance of the system in the overall information requirement. Due regard is also given to logical system development. For example, it is necessary to develop the accounting system first and then the analysis. Further, unless the systems are fully developed their integration is not possible. This development schedule is to be weighed against the time scale for achieving certain information requirement linked to a business plan. If these are not fully met, it is necessary to revise the time schedule and also the development schedule, whenever necessary.Hardware and Software PlanGiving due regard to the technical and operational feasibility, the economics of investment is worked out. Then the plan of procurement is made after selecting the hardware and software. One can take the phased approach of investment starting from the lower configuration of hardware going over to higher as development takes place. The process is to match the technical decisions with the financial decisions. The system development schedule is linked with the information requirements which in turn, are linked with the goals and objectives of the business. The selection of the architecture, the approach to the information system development and the choice of hardware and software are the strategic decisions in the design and development of the MIS in the organization. The organizations which do not care to take proper decisions in these areas suffer from overinvestment, underutilization and are not able to meet the critical information requirements. It is important to note the following points:

1. The organization’s strategic plan should be the basis for the MIS strategic plan.2. The information system development schedule should match with the implementation schedule of the

business plan.3. The choice of information technology is a strategic business decision and not a financial decision.

Development of Information Systems

a) Development and Implementation of the MISOnce the plan of MIS is made, the development of the MIS calls for determining the strategy of development is discussed earlier, the plan consists of various systems and subsystems. The development strategy determines where to begin and in what sequence the development can take place with the sole objective of assuring the

information support. The choice of the system or the subsystem depends on its position in the total MIS plan, the size of the system, the user's understanding of the systems and the complexity and its interface with other systems. The designer first develops systems independently and starts integrating them with other systems, enlarging the system scope and meeting the varying information needs. Determining the position of the system in the MIS is easy. The real problem is the degree of structure, and formalization in the system and procedures which determine the timing and duration of development of the system. Higher the degree of structured and formalization, greater is the stabilization of the rules, the procedures, decision-making and the understanding of the overall business activity. Here, it is observed that the user's and the designer's interaction is smooth, and their needs are clearly understood and respected mutually. The development becomes a method of approach with certainty in input process and outputs.b) Prototype ApproachWhen the system is complex, the development strategy is Prototyping of the System. Prototyping is a process of progressively ascertaining the information needs, developing methodology, trying it out on a smaller scale with respect to the data and the complexity, ensuring that it satisfies the needs of the users, and assess the problems of development and implementation. This process, therefore, identifies the problem areas, inadequacies in the prototype visa is fulfillment of the information needs. The designer then takes steps to remove the inadequacies. This may call upon changing the prototype of the system, questioning the information needs, streamlining the operational systems and procedures and move user interaction.In the prototyping approach, the designer's task becomes difficult, when there are multiple users of the same system and the inputs they use are used by some other users as well. For example, a lot of input data comes from the purchase department, which is used in accounts and inventory management.The attitudes of various users and their role as the originators of the data need to be developed with a high degree of positivism. It requires, of all personnel, to appreciate that the information is a corporate resource, and all have to contribute as per the designated role by the designer to fulfill the corporate information needs. When it comes to information the functional, the departmental, the personal boundaries do not exist. This call upon each individual to comply with the design needs and provide without fail the necessary data inputs whenever required as per the specification discussed and finalized by the designer.Bringing the multiple users on the same platform and changing their attitudes toward information, as a corporate resource, is the managerial task of the system designer. The qualification, experience, knowledge, of the state of art, and an understanding of the corporate business, helps considerably, in overcoming the problem of changing the attitudes of the multiple users and the originators of the data.c) Life Cycle ApproachThere are many systems or subsystems in the MIS which have a life cycle, that is, they have birth and death. Their emergence may be sudden or may be a part of the business need, and they are very much structured and rule based. They have 100% clarity of inputs and their sources, a definite set of outputs in terms of the contents and formats. These details more or less remain static from the day the system emerges and remains in that static mode for a long time. Minor modifications or changes do occur but they are not significant in terms of handling either by the designer or the user of the system. Such systems, therefore, have a life and they can be developed in a systematic manner, and can be reviewed after a year or two, for significant modification, if any.

Examples of such systems are pay roll, share accounting, basic financial accounting, finished goods accounting and dispatching, order processing, and so on. These systems have a fairly long duration of survival and they contribute in a big way as sources of data to the Corporate MIS. Therefore, their role is important and needs to be designed from the viewpoint as an interface to the Corporate MIS.

d) Implementation of the Management Information System

The implementation of the system is a management process. It brings about organizational change; It affects people and changes their work style. The process evokes a behavior response which could be either favorable or unfavorable depending upon the strategy of system implementation.In the process of implementation, the system designer acts as a change agent or a catalyst. For a successful implementation he has to handle the human factors carefully. The user of the system has a certain fear complex when a certain cultural work change is occurring. The first and the foremost fear are about the security to the person if the changeover from the old to new is not a smooth one. Care has to be taken to assure the user that such fears are baseless and the responsibility, therefore, rests with the designer. The second fear is about the role played by the person in the organization and how the change affects him. On many occasions, the new role may reduce his importance in the organization, the work design may make the new job impersonal, and a fear complex may get reinforced that the career prospects may be affected. There are certain guidelines for the systems designer for successful implementation of the system. The system designer should not question beyond a limit the information need of the user.1. Not to forget that his role is to offer a service and not to demand terms.2. Remember that the system design is for the use of the user and it is not the designer's prerogative to dictate the design features. In short, the designer should respect the demands of the user.3. Not to mix up technical needs with the information needs. He should try to develop suitable design with appropriate technology to meet the information needs. The designer should not recommend modifications of the needs, unless technically infeasible.4. Impress upon the user the global nature of the system design which is required to meet the current and prospective information need.5. Not to challenge the application of the information in decision-making. It is the sole right of the user to use the information the way he thinks proper.6. Impress upon the user that the quality of information depends on the quality of input.7. Impress upon the user that you are one of the users in the organization and that the information is a corporate resource and he is expected to contribute to the development of the MIS.8. Ensure that the user makes commitment to all the requirements of the system design specifications. Ensure that he appreciates that his commitments contribute largely to the quality of the information and successful implementation of the system.9. Ensure that the overall system effort has the management's acceptance.10. Enlist the user's participation from time to time, so that he is emotionally involved in the process of development.11. Realize that through serving the user, he is his best guide on the complex path of development.12. Not to expect perfect understanding and knowledge from the user as he may be the user of a non-computerized system. Hence, the designer should be prepared to change the system specifications or even the design during the course of development.13. Impress upon the user that the change, which is easily possible in manual system, is not as easy in the computer system as it calls for changes in the programs at cost. 14. Impress upon the user that perfect information is nonexistent; His role therefore still has an importance in the organization.15. Ensure that the other organization problems are resolved first before the MIS is taken for development.16. Conduct periodical user meetings on systems where you get the opportunity to know the ongoing difficulties of the users.17. Train the user in computer appreciation and systems analysis as his perception of the computerized information system will fall short of the designer's expectation. Implementation of the MIS in an organization is a process where organizational transformation takes place. This change can occur in a number of ways. The Lewin's model suggests three steps in this process. The first step is unfreezing the organization to make the people more receptive and interested in the change. The second step is choosing a course of action where the process begins and reaches the desired level of stability, and the third step is Refreezing, where the change is consolidated and equilibrium is reinforced. Many a times, this process is implemented through an external change agent, such as a consultant playing the role of a catalyst.The significant problem in this task is the resistance to change. The resistance can occur due to three reasons, viz., the factors internal to the users of information, the factors inherent in the design of the system and the factors arising out of the interaction between the system and its users. The problem of resistance can be

handled through education, persuasion, and participation. This can be achieved by improving the human actors, and providing incentives to the users, and eliminating the organizational problems before implementing the system.

Systems Analysis

Introduction to Systems Analysis

System analysis is the survey and planning of the project, the study and analysis of the existing business and information system and the definition of business requirements. System analysis involves two phases: study phase and definition phase.

Survey phase The purpose of the survey phase is to determine the worthiness of the project and to create a plan to complete those projects, deemed worthy. To accomplish the survey phase objectives, the system analyst will work with the system owner, system users, IS manager and IS staff to:

o Survey problems, opportunities and solutionso Negotiate project scopeo Plan the projecto Present the project

SDLC

System development cycle stages are sometimes known as system study. System concepts which are important in developing business information systems expedite problem solving and improve the quality of decision-making.The system analyst has to do a lot in this connection. They are confronted with the challenging task of creating new systems and planning major changes in the organization. The system analyst gives a system development project, meaning and direction. The typical breakdown of an information systems life cycle includes a feasibility study, requirements, collection and analysis, design, prototyping, implementation, validation, testing and operation. It may be represented in the form of a block diagram as shown below:

a)Feasibility study It is concerned with determining the cost effectiveness of various alternatives in the designs of the information system and the priorities among the various system components.

b) Requirements, collection and analysis It is concerned with understanding the mission of the information systems, that is, the application areas of the system within the enterprise and the problems that the system should solve.

c) Design It is concerned with the specification of the information systems structure. There are two types of design: database design and application design. The database design is the design of the database design and the application design is the design of the application programs.d) Prototyping A prototype is a simplified implementation that is produced in order to verify in practice that the previous phases of the design were well conducted.e) Implementation It is concerned with the programming of the final operational version of the information system. Implementation alternatives are carefully verifies and compared.f) Validation and testing it is the process of assuring that each phase of the development process is of acceptable quality and is an accurate transformation from the previous phase.

Roles of Systems AnalystSystem analysts are the facilitators of the study of the problem and needs of a business to determine how the business systems and information technology can best solve the problem and accomplish improvements for the business. The system analyst is responsible for examining the total flow of data throughout the organization.Various aspects of an organization like personnel interactions and procedures for handling problems of the computer are studied by him. The person involved in the system development is known as system analyst. His main role is as consultant, supporting and maintenance expert, he should work with a cross section of people and should have the experience of working with computers. He is a problem solver and takes problem as a challenge and enjoys meeting challenges. He knows how to use the right tools, techniques and experience at the right time.

Feasibility of SystemsFeasibility is a measure of how beneficial the development of an information system would be to an organization. Feasibility analysis is the activity by which the feasibility is measured. Feasibility study is a preliminary study which investigates the information needs of prospective users and determines the resource requirements, costs, benefits and feasibility of a proposed project. The data is first collected for the feasibility study. Later on, the findings of the study are formalized in a written report that includes preliminary specifications and a development plan for the proposed system. If the management approves these recommendations of the report the development process can continue.Types of feasibilityThe goal of feasibility study is to evaluate alternative systems and to propose the most feasible and desirable system for development. The feasibility of a proposed system can be evaluated in four major categories:a) Technical feasibility: It is a measure of a technology’s suitability to the application being designed or the technology’s ability to work with other technologies. It measures the practicality of a specified technical solution.b) Economic feasibility: It is the measure of the cost effectiveness of a project. It is also known as cost benefit analysis.c) Operational feasibility: It is a measure of how comfortable the management and users are with the technology.d) Schedule feasibility: It is a measure of how reasonable the project schedule is.

DFDData flow diagrams represent the logical flow of data within the system. DFD do not explain how the processes convert the input data into output. They do not explain how the processing takes place.DFD uses few symbols like circles and rectangles connected by arrows to represent data flows. DFD can easily illustrate relationships among data, flows, external entities and stores. DFD can also be drawn in increasing levels of detail, starting with a summary high level view and proceeding o more detailed lower level views.

A number of guidelines should be used in constructing DFD. Choose meaningful names for the symbols on the diagram. Number the processes consistently. The numbers do not imply the sequence. Avoid over complex DFD. Make sure the diagrams are balanced

Data DictionaryThe data dictionary is used to create and store definitions of data, location, format for storage and other characteristics. The data dictionary can be used to retrieve the definition of data that has already been used in an application. The data dictionary also stores some of the description of data structures, such as entities, attributes and relationships. It can also have software to update itself and to produce reports on its contents and to answer some of the queries.

Systems DesignIntroduction to SDThe business application system demands designing of systems suitable to the application in project. The major steps involved in the design are the following:Input Design Input design is defined as the input requirement specification as per a format required. Input design begins long before the data arrives at the device. The analyst will have to design source documents, input screens and methods and procedures for getting the data into the computer.Output Design – The design of the output is based on the requirement of the user –manager, customer etc. The output formats have to very friendly to the user. Therefore the designer has to ensure the appropriateness of the output format.Development – When the design and its methodology are approved, the system is developed using appropriate business models. The development has to be in accordance to a given standard. The norms have to be strictly adhered to.Testing Exhaustive and thorough testing must be conducted to ascertain whether the system produces the right results. Testing is time consuming: Test data must be carefully prepared, results reviewed and corrections made in the system. In some instances, parts of the system may have to be redesigned. Testing an information system can be broken down into three types of activities: unit testing, system testing and acceptance test. Unit testing or program testing consists of testing each program separately in the system. The purpose of such testing is to guarantee that programs are error free, but this goal is realistically impossible. Instead, testing should be viewed as a means of locating errors in programs, focusing on finding all ways to make a program fail. Once pinpointed, problems can be corrected. System testing tests the functioning of the information system as a whole. It tries to determine if discrete modules will function together as planned and whether discrepancies exist between the way the system actually works and the way it was conceived. Among the areas examined are performance time, capacity for file storage and handling peak loads, recovery and restart capabilities and manual procedures. Acceptance testing provides the final certification that the system is ready to be used in a production setting. Systems tests are evaluated by users and reviewed by management. When all parties are satisfied that the new system meets their standards, the system is formally accepted for installation.

Implementation and Maintenance

Conversion is the process of changing from the old system to the new system. Four main conversion strategies can be employed. They are the parallel strategy, the direct cutover strategy, the pilot strategy and the phased strategy.In a parallel strategy both the old system and its potential replacement are run together for a time until everyone is assure that the new one functions correctly. This is the safest conversion approach because, in the event of errors or processing disruptions, the old system can still be used as a backup. But, this approach is very expensive, and additional staff or resources may be required to run the extra system. The direct cutover strategy replaces the old system entirely with the new system on an appointed day. At first glance, this strategy seems less costly than the parallel conversion strategy. But, it is a very risky approach that can potentially be more costly than parallel activities if serious problems with the new system are found. There is no other system to fall back on. Dislocations, disruptions and the cost of corrections are enormous.The pilot study strategy introduces the new system to only a limited area of the organization, such as a single department or operating unit. When this version is complete and working smoothly, it is installed throughout the rest of the organization, either simultaneously or in stages.The phased approach strategy introduces the new system in stages, either by functions or by organizational units. If, for example, the system is introduced by functions, a new payroll system might begin with hourly workers who are paid weekly, followed six months later by adding salaried employees( who are paid monthly) to the system. If the system is introduced by organizational units, corporate headquarters might be converted first, followed by outlying operating units four months later.Moving from an old system to a new system requires that end users be trained to use the new system. Detailed documentation showing how the system works from both a technical and end-user standpoint is finalized during conversion time for use in training and everyday operations. Lack of proper training and documentation contributes to system failure, so this portion of the systems development process is very important.

Production and maintenanceAfter the new system is installed and conversion is complete, the system is said to be in production. During this stage the system will be reviewed by both users and technical specialists to determine how well it has met its original objectives and to decide whether any revisions or modifications are in order. In some instances, a formal post implementation audit document will be prepared. After the system has been fine-tuned, it will need to be maintained while it is in production to correct errors, meet requirements or improve processing efficiency.Once a system is fully implemented and is being used in business operations, the maintenance function begins. Systems maintenance is the monitoring, or necessary improvements. For example, the implementation of a new system usually results in the phenomenon known as the learning curve. Personnel who operate and use the system will make mistake simply because they are familiar with it. Though such errors usually diminish as experience is gained with a new system, they do point out areas where a system may be improved.Maintenance is also necessary for other failures and problems that arise during the operation of a system. End-users and information systems personnel then perform a troubleshooting function to determine the causes of and solutions to such problems.Maintenance also includes making modifications to an established system due to changes in the business organizations, and new e-business and ecommerce initiatives may require major changes to current business systems.

DESIGNING AN MIS

A management information systems must be flexible and adaptive and must have the capacity to accommodate deficiencies as the system evolves. Procedures should be developed to detect these deficiencies and to make adjustments in the system so as to eliminate or reduce them. Managers, as well as information specialists and operations researchers, should participate in each phase of the design of an MIS.

The design of an MIS should begin with an identification of the important types of strategic, managerial, and operational decisions required by the organization. Relationships among decisions should be defined and the flow of decisions should be determined. Such a decision-flow analysis often reveals

that important decisions are being made by default. For example, past decisions often may still be binding on the operations of an organization even though they are no longer applicable to current problems and procedures. When asked: "Why do you follow these procedures," all-too-often the answer is: "Well, that's the way we have always done it."

An analysis of decision flows may also uncover situations in which interdependent decisions are being made independently. Frequently changes can be identified that should be made in the flow of decisions to correct information deficiencies which may involve (a) the responsibilities of management, (b) the organizational structure, or (c) measures of performance.

The next step in the design of an MIS involves an analysis of the information requirement of the major classes of decisions. Ackoff has suggested that organizational decisions can be grouped into three types: (1) decisions for which adequate models exist or can be developed and from which optimal solutions can be derived; (2) decisions for which models can be constructed but from which optimal solutions cannot be readily extracted; and (3) decisions for which adequate models cannot be constructed. [1]

In response to the first type of decisions, the model should have the capacity to identify the relevant information required for a solution to the problem. The decision process should be readily incorporated into the MIS (thereby converting it, at least partially, to a management control system). In the second case, while the model may specify what information is required, a further search process may be necessary, including the examination of alternative approaches, to fully explicate these information requirements.

Further research is required in the third situation to determine what information is relevant and how this information can be organized to address the decision situation. It may be possible through such research, to make more explicit the implicit models used by decision makers and in so doing, to treat such models as type-2 decision situations.

In each of these categories it is appropriate to provide feedback by comparing actual decision outcomes with those predicted by the models. It is important that the MIS have the capacity not only to answer the questions that might be addressed to it, but also to report any deviations from expectations (that is, actual decision outcomes that differ from those predicted). Each decision made, along with its predicted outcome, should become an input to a management control system. [2]

As Rapoport has noted, the first step in solving a problem is to state it.

The statement usually involves a description of an existing state and desirable state of affairs where the factors involved in the discrepancy are explicitly pointed out. The success with which any problem is solved depends to a great extent on the clarity with which it is stated. In fact, the solution of the problem is, in a sense, a clarification (or concretization) of the objectives. [3]

Vague problem statements lead to vague methods, where success is erratic and questionable. The more a given problem can be extended through the examination of timely information about the situation, the greater the promise of a successful solution.

A distinction should be made among four different types of problem sets. Most problems that confront complex organizations represent generic events, of which the specific occurrence is only a symptom. As a general rule, such generic situations require adaptive decisions, that is, decisions which may require considerable reconstruction of programmed details before they are applicable to a given problem situation. Adaptive decisions alleviate built-up pressures by removing the more immediate sources of demand or by providing satisfactory alternative solutions to that which is sought. Until the generic problem is identified, however, significant amounts of time and energy may be spent in the piecemeal application of adaptive decisions to the symptoms without ever gaining control of the generic situation.

The second type of occurrence is one that, although unique in a given organization, is actually a generic event. For example, a company's decision on the location of new processing plant may be a unique situation as far as the present company officials are concerned. It is, however, a generic situation that has confronted many other companies in the past. Some general rules exist for deciding on the best location for such facilities, and the decision makers can turn to the experience of others for these guidelines.

The third possible problem classification is the truly unique situation. Here, the event itself may be unique or the circumstances in which the event has occurred may be unique. The huge power failure of November, 1965, for example, which plunged northeastern North America into darkness, was a truly exceptional or unique event, at least according to first explanations. On the other hand, the collision of two airplanes miles from any air terminal is a unique situation, not because airplanes do not run the risk of collision, but because of the unique circumstances under which the event occurred.

The fourth type of event confronting the decision process is the early manifestation of a new generic problem. Both the power failure and the collision of two airplanes, for example, turned out to be only the first occurrence of what are likely to become fairly frequent events unless generic solutions are

found to certain problems of modern technology.

As illustrated in Exhibit 1, the relationship among these four categories can be described in terms of (1) the availability of rules and principles (information) for dealing with such problems and (2) the frequency of encounter of these situation. General principles, rules, or procedures usually can be developed or adapted to deal with generic situations. Once an appropriation problem classification has been found, all manifestations of the same generic situation can be handled fairly pragmatically by adapting the rules or principles to the concrete circumstances of the problem situation. In short, such problems can be handled through adaptive decision making. The unique problem and the first manifestation of a generic problem, however, often require greater innovation in the search for successful solutions.

By far the most common mistake in decision making is to treat a generic problem as if it were a series of unique events. Treating a unique event as if it were just another example of the same old problem to which the same old rules can be applied can have equally negative repercussions.

The role of the experienced manager is to avoid incomplete solutions to problems that are only partially understood. The technical expertise of those individuals closest to the situation should be used to classify the problem. Settling on a plausible albeit incomplete definition of the problem is also a danger. A well-developed management information system can provide safeguards against an incomplete definition by providing mechanisms to reject such definitions if an when they fail to encompass the observed facts regarding the problem.

The outcome of this analysis should be a clear definition of the problem. If the problem cannot be stated specifically--preferable in one interrogative sentence, including one or more objectives--the analysis has been inadequate or of insufficient depth. Emotional bias, habitual or traditional behavior, and the human tendency to seek the path of least resistance may contribute to a superficial analysis, followed by a statement of the apparent rather than the real problem. An excellent solution to an apparent problem will not work in practice, because it is the solution to a problem that does not exist in fact. Short-circuiting this phase in the process may actually result in more time spent later to get at the real problem when it becomes painfully evident that further analysis is required.

Exhibit 1Problem Definition and Classification

Availability of Rules & PrinciplesHigh Nonrecurrent Generic Problem Generic Problem Adaptive Decision Process Unique Problem First Manifestation of a Generic Problem Innovative Decision Process Low High Frequency of Encounter

The basic components of an MIS applicable to the information needs of financial planning and management control are illustrated in Exhibit 2. Three specific data areas provide inputs for the formulations of strategic decisions: (1) environmental intelligence--data about the broader environment of which the organization is a part, including assessments of client needs; (2) auto intelligence--data about the component elements of the particular organization, including an evaluation of organizational resources and its capacity to respond to client needs; and (3) historic data, which bring together and analyze the lessons of past experience. These data are stored in the memory banks of the organization to be retrieved when particular decision situations arise or when a broader assessment of the overall goals and objectives of the organization is appropriate.

Basic research and analysis are essential to effective fiscal planning and management control. Data must be systematically collected and stored for future use and reference. Data can be generated externally (e.g., relevant national data, macro-trend analyses, etc.) or internally (e.g., accounting and other fiscal management data). Basic analysis can be carried out using various modeling programs available in a well-constructed MIS. The results can be stored in the data base for reference and updating. The diagnosis of trends can be aided, in part, by the modeling and simulation programs and statistical analysis packages.

Forecasts of the probable outcomes of events can be developed on these data foundations. Probable happenings are outlined by assuming the continuance of existing trends into hypothetical futures. These forecasts provide an important inputs in determining organizational objectives--an initial impetus for strategic planning.

While computer-based data have not been used extensively in the formulation of goals and objectives, an MIS can aid in the development and evaluation of such statements. Objectives can be written so as to take fuller advantage of available information in the system. Addition-ally, written objectives can be stored, permitting easy access, change, and output. Once objectives have been determined (at least in preliminary fashion), the planning process can begin to suggest possible directions that the organization can take in response to client needs in the broader environment. Two important initiatives are important in this regard: (1) the search for possible new courses of action to improve the overall performance of the organization; and (2) a framework for resource management and control.

The same system components used in the basic research and analysis phase can be applied in the formulation and analysis of alternatives. The analysis of alternative must build on the basic analyses previously carried out, and therefore, significant use must be made of the storage and query capabilities of the DBMS. The results of previous decisions and program actions are combined through policy and resource recommendations. In this capacity, the MIS can be

useful in the storage and retrieval of needed information and in report generation.

Tactical and technical innovations must be sought to improve the overall responsiveness of the organization (in the private sector, these innovations also improve the competitive position of the organization). Various "what if" scenarios may be tested through the analytical subroutines contained within the MIS.

Management plans must translate the overall intent of strategic plans into more specific programs and activities. Management plans are both information demanding and information producing. The budget process provides important managerial feedback in terms of evaluations of prior program decisions and actions. Feedforward information emerges from the various projections and forecasts that are required by financial analysis and budgeting processes.

Management control activities draw on the memory banks of the organization in search for programmed decisions--decisions that have worked successfully in the past. Timely resource evaluations also provide important inputs into the process. These evaluations include information regarding the current fiscal status of the organization (accounting data), as well as the overall response capacity of other organizational resources (systems readiness). The process should provide critical feedback to the further refinement of objectives. In some cases, this feedback will require a recycling before proceeding to the next phase.

Program development involves the activities of task identification and budgeting. Specific operations are detailed within the framework provided by the strategic plan and fiscal planning decisions. Responsibilities for carrying out these operations are assigned, as are the resources required by these operations. Specific operations may be further detailed through the procedures of operations planning and control (which may include such techniques as Program Evaluation Review Technique (PERT) and Critical Path Method (CPM)). Programming and scheduling procedures usually require further information regarding resource capabilities. They also may precipitate a recycling of the fiscal planning process.

The final component of the MIS involves the information derived from performance evaluations. Performance evaluation draws data from the broader environment regarding the efficiency and effectiveness with which client needs are met, problems are solved, opportunities are realized, and so forth. Some writers view performance evaluation as a separate process outside the management information system. Others recognize the importance of incorporating the data and information developed through such evaluations by referring to a management information and program evaluation system [4]

A basic problem of organizations today--whether in the public or private sectors--is to achieve an appropriate balance in

programs and decisions to ensure systems readiness. Systems readiness defines the response capacity of the organization in the short-, mid-, and long-range futures. Sufficient flexibility is required to meet a wide range of possible competitive actions. The development and maintenance of an MIS that includes the basic components outlined herein can contribute significantly to meeting this challenge.

Feedback is a basic requirement of any MIS. Feedback must be obtained in terms of quality (effectiveness), quantity (efficiency of service levels), cost, and so on. Programs must be monitored to maintain process control. Evaluations of resources (inputs) provide feedback at the earliest stages of program implementation.

Feedback data must be collected and analyzed at various stages in the implementation of programs and the maintenance of ongoing operations. These analyses involve processing data, developing information, and comparing actual results with plans and expectations. Routine adjustments may be programmed into the set of ongoing procedures, and instructions can be provided to those individuals who must carry out specific tasks. Feedback from the operating systems provides an information flow within the management control procedures to initiate and implement program changes in a more timely basis. Thus, procedures are modified and files updated simultaneously with routine decision making and program adjustments.

Summary and exception reports may be generated by the MIS and become part of higher-level reviews and evaluations. These evaluations, in turn, may lead to adaptations or innovations of goals and objectives. Subsequent management activities should reflect such feedback, and the entire process is recycled.

Managers must seek data and information that will permit actions to be taken before problems reach crisis proportions. Historic data provided by conventional accounting systems may be insufficient to meet these decision needs (even when the time lag is only a few weeks). Resource evaluations on the input side and resource monitoring as programs or projects progress can provide the more timely information required to anticipate rather than merely to react to problems.

An information system appropriate for fiscal planning and management control must use feedforward as well as control based on feedback. Feedforward anticipates lags in feedback systems by monitoring inputs and predicting their effects on output variables. In so doing, action can be taken to change inputs and, thereby, to bring the outputs into equilibrium with desired results before the measurement of outputs discloses a deviation from accepted standards.

In time, an organization "learns" through the processes of planning, implementation, and feedback. [5] Approaches to decision making and the propensity to select certain means

and ends change as the value system of the organization evolves.

Endnotes [1] Russell L. Ackoff, "Management Misinformation Systems," Management Science (Application Series) 14 (December 1967), reprinted in Donald H. Sanders and Stanley J. Birkin, Computers and Management in a Changing Society (New York: McGraw-Hill, 1980), p. 44. [2] Ibid., p. 45. [3] Anatol Rapoport, "What Is Information?" ETC: A Review of General Semantics Vol. 10 (Summer, 1953), p. 252. [4] For a further discussion of the concepts of MIPES, see: Alan Walter Steiss, Public Budgeting and Management (Lexington, Mass.: Lexington Books, D.C. Heath, 1972), chap. 10 [5] Richard M. Cyert and James G. March, A Behavioral Theory of the Firm (Englewood Cliffs, N.J.: Prentice-Hall, 1963), p. 123.