Unit1 Notes questionnaire

8/12/2019 Unit1 Notes questionnaire

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BBA - V

Management Information System (Paper Code:307)

UI! "

"#" Introd$%tion to MIS

Management in all business and organizational activities is the act of getting people together to

accomplish desired goals and objectivesusing available resources efficiently and effectively.

Management comprisesplanning, organizing, staffing, leading or directing, and controlling an

organizationor effort for the purpose of accomplishing a goal

Management: Management covers the planning, control, and administration of the

operations of a concern. The top management handles planning; the middle management

concentrates on controlling; and the lower management is concerned with actualadministration.

Information: information, in MI, means the processed data that helps the management

in planning, controlling and operations. !ata means all the facts arising out of the

operations of the concern. !ata is processed i.e. recorded, summarized, compared and

finally presented to the management in the form of MI report.

System: !ata is processed into information with the help of a system. " system is made

up of inputs, processing, output and feedbac# or control.

"#& MIS-'efinition

MI $Management Information ystems% is a general term for the computer systems in an

enterprise that provide information about its business operations. It&s also used to refer to

the people who manage these systems.

Typically, in a large corporation, 'MI' or the 'MI !epartment' refers to a central or

centrally(coordinated system of computer e)pertise and management.

MI is a formalized computer information system which can integrate data from various

sources to provide the information necessary for decision(ma#ing at the management

level.

"n organized assembly of resources and procedures re*uired to collect, process and

distribute data for use in decision(ma#ing

In order to provide past, present and future information, an MI can include software that

helps in decision(ma#ing, data resources such as databases, the hardware resources of a1
http://en.wikipedia.org/wiki/Objective_(goal)http://en.wikipedia.org/wiki/Planninghttp://en.wikipedia.org/wiki/Organizinghttp://en.wikipedia.org/wiki/Organizinghttp://en.wikipedia.org/wiki/Human_resourceshttp://en.wikipedia.org/wiki/Leadershiphttp://en.wikipedia.org/wiki/Leadershiphttp://en.wikipedia.org/wiki/Control_(management)http://en.wikipedia.org/wiki/Control_(management)http://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Planninghttp://en.wikipedia.org/wiki/Organizinghttp://en.wikipedia.org/wiki/Human_resourceshttp://en.wikipedia.org/wiki/Leadershiphttp://en.wikipedia.org/wiki/Control_(management)http://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Objective_(goal)


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system, decision support systems, people management and project management

applications and any computerized processes that enable the department to run

efficiently.

"#3 $n%tions of management

The most widely accepted are functions of management given by +-T and /!--01

i.e. Panning, *rgani+ing, Staffing, 'ire%ting and Controing. These functions have been

discussed below:

1. Planning

It is the basic function of management. It deals with chal#ing out a future course of action

2 deciding in advance the most appropriate course of actions for achievement of pre(determined goals. "ccording to +-T, 34lanning is deciding in advance ( what to do,

when to do 2 how to do. It bridges the gap from where we are 2 where we want to be5.

" plan is a future course of actions. It is an e)ercise in problem solving 2 decisionma#ing. 4lanning is determination of courses of action to achieve desired goals. Thus,

planning is a systematic thin#ing about ways 2 means for accomplishment of pre(

determined goals. 4lanning is necessary to ensure proper utilization of human 2 non(human resources. It is all pervasive, it is an intellectual activity and it also helps in

avoiding confusion, uncertainties, ris#s, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources anddeveloping productive relationship amongst them for achievement of organizational

goals. "ccording to 6enry 7ayol, 3To organize a business is to provide it with everything

useful or its functioning i.e. raw material, tools, capital and personnel/s5. To organize a

business involves determining 2 providing human and non(human resources to theorganizational structure. rganizing as a process involves:

Identification of activities.

8lassification of grouping of activities.

"ssignment of duties.

!elegation of authority and creation of responsibility.

8oordinating authority and responsibility relationships.

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3. Staffing

It is the function of manning the organization structure and #eeping it manned. taffing

has assumed greater importance in the recent years due to advancement of technology,increase in size of business, comple)ity of human behaviour etc. The main purpose o

staffing is to put right man on right job i.e. s*uare pegs in s*uare holes and round pegs in

round holes. "ccording to +ootz 2 /!onell, 3Managerial function of staffing involvesmanning the organization structure through proper and effective selection; appraisal 2

development of personnel to fill the roles designed un the structure5. taffing involves:

Manpower 4lanning $estimating man power in terms of searching, choose the

person and giving the right place%. 9ecruitment, selection 2 placement.

Training 2 development.

9emuneration.

4erformance appraisal.

4romotions 2 transfer.

4. Directing

It is that part of managerial function which actuates the organizational methods to wor#efficiently for achievement of organizational purposes. It is considered life(spar# of theenterprise which sets it in motion the action of people because planning, organizing and

staffing are the mere preparations for doing the wor#. !irection is that inert(personnel

aspect of management which deals directly with influencing, guiding, supervising,motivating sub(ordinate for the achievement of organizational goals. !irection has

following elements:

upervision

Motivation

1eadership

8ommunication

S$per,ision-implies overseeing the wor# of subordinates by their superiors. It is the actof watching 2 directing wor# 2 wor#ers.

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Moti,ation-means inspiring, stimulating or encouraging the sub(ordinates with zeal to

wor#. 4ositive, negative, monetary, non(monetary incentives may be used for this

purpose.

eaders.ip-may be defined as a process by which manager guides and influences the

wor# of subordinates in desired direction.

Comm$ni%ations-is the process of passing information, e)perience, opinion etc from

one person to another. It is a bridge of understanding.

5. Controlling

It implies measurement of accomplishment against the standards and correction of

deviation if any to ensure achievement of organizational goals. The purpose of

controlling is to ensure that everything occurs in conformities with the standards. "n

efficient system of control helps to predict deviations before they actually occur.

"ccording to +oontz 2 /!onell 38ontrolling is the measurement 2 correction ofperformance activities of subordinates in order to ma#e sure that the enterprise objectives

and plans desired to obtain them as being accomplished5. Therefore controlling hasfollowing steps:

a. 0stablishment of standard performance.

. Measurement of actual performance.

. 8omparison of actual performance with the standards and finding out deviation if

any.

. 8orrective action

"#/ MIS $n%tions

MI is set up by an organization with the prime objective to obtain management information to0 used by its managers in decision ma#ing. Thus, MI must perform the following functions in

order to meet its objectives.

'ata Capt$ring: MI captures data from various internal and e)ternal sources of an

organization. !ata capturing may 0 manual or through computer terminals. 0nd userstypically, record data about transactions on some physical medium, such as a paper form,

or enter it directly into a computer system.

Pro%essing of 'ata: The captured data is processed to convert it into the re*uired

management information. 4rocessing of data is done by such activities as calculating,comparing, sorting, classifying and summarizing. These activities organize, analyze, and

manipulate data using various statistical, mathematical, operations research and other

business models.

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Storage of Information: MI stores processed or unprocessed data for future use. If any

information is not immediately re*uired, it is saved as an organizational record. In this

activity, data and information are retained in an organized manner for later use. toreddata is commonly organized into fields, records, files and databases.

etrie,a of Information: MI retrieves information fro its stores as and when re*uiredby various users. "s per the re*uirements of management users, the retrieved informationis either disseminated as such or it is processed again to meet the e)act MI demands.

'issemination of MI: Management Information, which is a finished product of MI, is

disseminated to the users in the organization

"#1 C.ara%teristi%s of MIS

. Management oriented: The system is designed form the top to wor# downwards. It does not

mean that the system is designed to provide information directly to the top management. ther

levels of management are also provided with relevant information.

. Integrated: The word &integration& means that system has to cover of all the functional areas of

an organization so as to produce more meaningful management information, with a view to

achieving the objectives of the organization. It has to consider various sub(ystems, their

objectives, information needs, and recognize the independence, that these sub(systems have

amongst themselves, so that common areas of information are identified and processed without

repetition and overlapping. 7or e)ample, in the development of an effective production

scheduling system, a proper balance amongst the following factors is desired:

i. et up costs

ii. vertime

iii. Manpower

iv. 4roduction capacity

v. Inventory level

vi. Money available

vii. 8ustomer service.

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/# Common data fo2s: The integration concept of MI, common data flow concept avoids

repetition and overlapping in data collection and storage, combining similar functions, and

simplifying operations wherever possible. 7or e)ample, in the mar#eting operations, orders

received for goods become the basis billing of goods ordered, setting up of the accounts

receivable, initiating production activity, sales analysis and forecasting etc.

1# ei4iity and ease of $se: ?hile building an MI system all types of possible means, which

may occur in future, are added to ma#e it fle)ible. " feature that often goes with fle)ibility is the

ease of use. The MI should be able to incorporate all those features that ma#e it readily

accessible to wide range of users with easy usability.

5# S$4 System %on%ept:?hen a problem is seen in sub parts, then the better solution to the

problem is possible. "lthough MI is viewed as a single entity but for its effectiveuse, it should

be bro#en down in small parts or subsystems so that more attention and insight is paid to each

sub system. 4riorities will be set and phase of implementation will be made easy. ?hilema#ing or brea#ing down the whole MI into subsystems, it should be #ept in mind that the

subsystems should be easily manageable.

7# Compre.ensi,e:MI is comprehensive in nature. It includes transaction processing systems

as well as information processing systems decisioned primarily for decision ma#ing and control

at all levels of organization. It also embraces other subsystems of the organization such as formal

and informal subsystems, manual and computer subsystems, office information systems, decision

support systems, etc.

6# Coordinated: It is a coordinated system. It is centrally coordinated to ensure that data

gathering, processing, office automation, intelligence and decision support systems and other

components of MI are developed and operated in a planned and coordinated way; information

is passed bac# and forth among various subsystems as needed and the whole I operates

efficiently so that the system becomes cost effective.

# eed4a%8:MI should provide feedbac# about its own efficiency and effectiveness. In

determining MI efficiency and effectiveness, two aspects are ta#en into account @ costAbenefit

and supply of relevant and timely information.

"0# 9%eption Based:There should be e)ception reporting to decision ma#er at the re*uired

level i.e. e)ception based reporting in abnormal situation, i.e. the ma)imum, minimum ore)pected values vary beyond tolerance limits.

""# $t$re oriented:MI should not merely provide past or historical information rather it

should provide information on the basis of projections based on which actions may be initiated.

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"#5 e,es of Management

Most organizations have three management levels: low(level, middle(level, and top(level

managers. These managers are classified in a hierarchy of authority, and perform different tas#s.In many organizations, the number of managers in every level resembles a pyramid. 0ach level is

e)plained below in specifications of their different responsibilities and li#ely job titles.

!op-e,e managers

8onsists of board of directors, president, vice(president, 80s, etc. They are responsible forcontrolling and overseeing the entire organization. They develop goals, strategic plans, company

policies, and ma#e decisions on the direction of the business. In addition, top(level managers

play a significant role in the mobilization of outside resources and are accountable to theshareholders and general public.

The role of the top management can be summarized as follows (

a. Top management lays down the objectives and broad policies of the enterprise.

b. It issues necessary instructions for preparation of department budgets, procedures,

schedules etc.

c. It prepares strategic plans 2 policies for the enterprise.

d. It appoints the e)ecutive for middle level i.e. departmental managers.

e. It controls 2 coordinates the activities of all the departments.

f. It is also responsible for maintaining a contact with the outside world.

g. It provides guidance and direction.

Midde-e,e managers

8onsist of general managers, branch managers and department managers. They are accountable

to the top management for their department&s function. They devote more time to organizational

and directional functions. Their roles can be emphasized as e)ecuting organizational plans inconformance with the company&s policies and the objectives of the top management, they define

and discuss information and policies from top management to lower management, and most

importantly they inspire and provide guidance to lower level managers towards betterperformance. ome of their functions are as follows:

Their role can be emphasized as (

a. They e)ecute the plans of the organization in accordance with the policies and

directives of the top management.

b. They ma#e plans for the sub(units of the organization.

c. They participate in employment 2 training of lower level management.

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http://en.wikipedia.org/wiki/Board_of_directorshttp://en.wikipedia.org/wiki/CEOhttp://en.wikipedia.org/wiki/Board_of_directorshttp://en.wikipedia.org/wiki/CEO


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d. They interpret and e)plain policies from top level management to lower level.

e. They are responsible for coordinating the activities within the division ordepartment.

f. It also sends important reports and other important data to top level management.

g. They evaluate performance of junior managers.

h. They are also responsible for inspiring lower level managers towards better

performance.

i. !esigning and implementing effective group and intergroup wor# andinformation systems.

j. !efining and monitoring group(level performance indicators.

#. !iagnosing and resolving problems within and among wor# groups.

o2-e,e managers

8onsist of supervisors, section leads, foremen, etc. They focus on controlling and directing. Theyusually have the responsibility of assigning employees tas#s, guiding and supervising employees

on day(to(day activities, ensuring *uality and *uantity production, ma#ing recommendations,

suggestions, and upchanneling employee problems, etc. 7irst(level managers are role models foremployees that provide:

asic supervision. Motivation.

8areer planning.

4erformance feedbac#.

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"#7 oe of MIS

MI plays very vital role in the management, administration and operation of the

organization.

The system ensures that an appropriate data is collected from various sources, processed

and sent further wherever and whenever re*uired.

7ulfill the information needs of an individual and top management

"t every phase of the management process, managers constantly need information in

order to ma#e effective decisions and this information is provided by MI.

MI is re*uired by managers as they ma#e their decisions, such as number of staff

re*uired to be employed by each department, their training re*uirements, career

development plans, budgets, overall forecasts, surveys, and progress reports on socio

economic conditions

Timely and "ccurate Transaction 4rocessing.

treamlining "ccounting and 9ecords Management.

4roviding Managers with ad hoc and interactive support in decision(ma#ing.

4rovision of an easy and systematic way in digging out critical information tailored

according to specific re*uirements, and customized in preferred formats.

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0nables an organization to gain competitive advantage over others

etter communication, inter(organizational computing, and internet(wor#ing. upports

business operations and successful management of business enterprises.

etter use of e)ecutive resources by automating routine functions.

Increased ability to ma#e sound, rational and informed decisions involving comple)

combinations of factors, and doing so with more confidence and speed.

etter use of time by ma#ing facilities available every time they are re*uired.

Improved customer services and improved personnel relations within the organization

"#6 Impa%t of MIS

ince the MI plays a very important role in the organization, it creates an impact on theorganizations functions, performance and productivity. The impact of MI on the functions is in

its management. ?ith a good support, the management of mar#ing, finance, production and

personnel become more efficient. The trac#ing and monitoring of the functional targets becomeseasy. 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 e)ceptional innature, inducing him to ta#e an action or a decision in the matter. " disciplined information

reporting system creates a structured data and a #nowledge 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.

The MI calls for a systemization of the business operation for an affective system design. "

well designed system with a focus on the manger ma#es an impact on the managerial efficiency.It helps him to resort to such e)ercises as e)perimentation and modeling. The use of computers

enables him to use the tools techni*ues which are impossible to use manually. The ready(made

pac#ages ma#e this tas# simpler. The impact is on the managerial ability to perform. It improvesthe decision ma#ing ability considerably. ince the MI wor#s on the basic systems such as

transaction processing and databases, the drudgery of the clerical wor# is transferred to the

computerized system, relieving the human mind for better wor#.

MI creates, animpa%ton the organization/s function, performance and productivity.

?ith MI support management of all departments of an organization can become more

effective

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Targets trac#ing and monitoring becomes easy. Top level managers can be informed

accordingly.

4robable trends in various aspects of business can be traced. This helps in long(term

planning and forecasting.

0)ception conditions can be brought to the noticed, so that manages can ta#e decision in

that matter.

Information reporting system helps entire organization.

MI brings clarity in the communication, due to common understanding of terms and

terminology.

rings high degree of professionalism in the business operations

6elps him to use different tools and techni*ues, which are impossible to use manually.

!ecision(ma#ing ability is improved

"# eed for MIS

8omple)ity of business organization is lin#ed with heterogeneity and range of activities which

are relevant for the organization. Thu, the more is the heterogeneity, the more will be the

comple)ity because of environmental pressure, and this comple)ity can/t be all together avoided

but has to be managed effectively. MI tries to manage this comple)ity by providing theinformation in the following areas:

. 'e%ision ma8ing( It is a process by which an individual or an organization selects a position

or action from several possible alternatives. This process involves identification of problem,

identification of various alternatives, evaluation of these alternatives and choice of the best

alternative which can solve the problem. "t each stage of the decision ma#ing process relevant

information is re*uired. ince decisions made by different managers may differ so do their

information re*uirements. Therefore, MI should provide all the re*uired information that can

help the managers of all levels in decision ma#ing.


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legal issues, competitors capacity etc. esides this, internal information about of organization

own capabilities e)isting strategies, resource availability and constraints are also needed.

>. Management %ontro( It refers to the tas# of ensuring that activities are producing the desired

results. This involves measurement of actual performance with the desired performance,

comparision between two, identification of deviation, analysis of causes of deviation and ta#ingthe corrective actions to overcome those deviations, therefore, every manger in the organization

must have ade*uate information about the performance, standards and how the employees are

contributing towards achievement of organization objectives.

B. *perations panning and %ontro( It is the process of deciding the most effective use of

resources already allocated and available for development of a control mechanism to ensure the

effective implementation of the organization objectives. n the other hand, operation control is

concerned with the action performed or performance achieved and evaluates the performance at

the operational level. This helps in ta#ing corrective actions to control any deviations at the

operational level.

"#"0 Management 4y 9%eption

4areto.s principle of C=:


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" wrong management process refers to a variety of decisions a manager has ta#en in the

planning, organization, staffing, directing and controlling a given management tas#. Thesedecisions relate to the choice and the allocation of resources, the methods of using resources, the

application of the tools and the techni*ues, the use of manpower by way of staffing and the

manner in which the efforts are coordinated in the organization. 7or an efficient and an effectivemanagement, without loss of time, it is, therefore, necessary to report the significant deviations

to the right person in the organization. In this regard a manager himself has to provide the

conditions of e)ceptions in the control system so that they are highlighted and informed. Themanagement by e)ception commands grip on the management process. The managerial effort

gets directed towards the goal with the purpose of achievement.

"#"" MIS Ar%.ite%t$re

MI are federation of different information systems with each system providing information

relevant to a specific "rea which may be identified on the basis of relevant to a specific areawhich may be identified on the basis of management levels(top, middle, and lower,

organizational functions(production, mar#eting, finance, and personnel, or functions of

information systems(data processing, operational planning and control, and strategic planning.

Darious information systems and their integration determine the MI architecture. Thus, MI

architecture, also #nown as structure, represents a broad framewor# within which individual

information systems fit. ?hen these individual information systems are described within the

conte)t of MI, they can be treated as subsystems .In designing MI architecture; two issues are

involved(identifying subsystems and interconnecting these subsystems.

Identifying s$4systems

ubsystems, as described earlier, are components of a system. The use of subsystem as building

bloc#s is basic to the analysis and the development of the system. " comple) system is too

difficult to comprehend when considered as a whole. Therefore, the system is decomposed or

divided into subsystems. ubsystems of MI can be identified on following bases:

. 1evels of management.

. rganizational functions.

B. MI support facilities.

e,es of Management. In an organization, people are arranged in a hierarchy creating different

levels. Managerial personnel may be arranged into top, middle, and lower levels. Though

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managers at all these levels perform all managerial functions, the nature of their functions differs

considerably. Therefore, their information re*uirements differ considerably and only specific

information systems are relevant to managers at each level.

Management f$n%tions# Management functions are those activities and processes that are

performed by different managers. Though the classical model of management functions classifies

these into planning, organizing, staffing, directing, and controlling, to put proper emphasis on

functions performed by different by different level managers, these functions may be classified

as strategic planning, management control, and operational planning and control.

*rgani+ationa $n%tions#ubsystems of an organization as a system can be identified on the

basis of functions that the organization is re*uired to perform in order to achieve its objectives.

!epending on the nature of organizations, there may be different types of functions. 6owever, in

the case of a business organization, these functions can be grouped into four broad categories(

production, mar#eting, finance, and personnel. 7or e)ample, production into manufacturing,

inventory controls, *uality control, plant maintenance, research and development etc. uch a

classification can go on till we arrive at the level of operatives involved in a particular broad

function.

MIS S$pport a%iities# In order to perform various functions, MI need support facilities. 7or

e)ample, in computer(based information systems, we need computer hardware, computer

software, databases, and MI professionals. "ll these subsystems of MI support facilities

perform different functions.

Inter%onne%ting systems

7or a system to be effective, it is not just enough that it has various subsystems but it is essential

that these subsystems are arranged in a proper way and inter connections are provided among

them. Interconnections among various subsystems are re*uired to achieve coordination and

integration among these subsystems so that each subsystem contributes positively to other

subsystems. ecause of this positive contribution of each subsystem, the system generates

synergy, a phenomenon in which the total contribution of the system is more than the total of

contribution made by all subsystems had they not been coordinated.

In interconnecting various subsystems, two aspects must be ta#en into consideration(

differentiation and integration. !ifferentiation refers to differences in specific feature of a

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subsystem that differentiate a subsystem from other subsystem so that after interconnecting it

with others, it can be identified. Integration refers to the *uality of state of e*uilibrium among

various subsystems that is re*uired to achieve unity of effort by the system. There may be

various methods which can be used to interconnect various information subsystems for e)ample,

common database for all information systems in an organisation.

ased on the identification of various subsystems, MI architecture can be designed as shown.

Management Management Information systems

levels functions

Top trategic 0)ecutive support

planning systems

Management

control

Middle perational !ecision support

planning and systems

8ontrol

1ower 0)pert systems

tructured information

ystems

Transaction processing

ystems

MI architecture

15

Overall management

Organisational Functions

Production

Marketing

Finance

Personnel

M! su""ort #acilities

$ard%are !o#t%are &ata'ase

M! Pro#essionals


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Eenerally, the MI architecture is designed from bottom to top in which MI support facilities

provide base for developing various information systems through the creation of transaction

processing systems for various organisational functions. 7or each of these functions, information

systems are designed for planning and control at lower and middle management. ?hile at lower

level, transaction processing and structured information systems are more relevant, at middle

management, structured information systems are supplemented by e)pert systems $in some

areas% and decision support systems. "t the top level, overall management functions are

performed which are mostly in the form of strategic planning and management control for which

e)ecutive support systems and summary of control reports generated by structured information

systems are re*uired.

"#"& MIS and ot.er dis%ipines

8oncept of MI is interdisciplinary in nature i.e it has borrowed its concepts from a largenumber of disciplines li#e accounting, computer sciences, management, operation research,

behavioural sciences etc. ecause of its interdisciplinary in nature, MI is neither termed as a

pure science nor an art, rather it is considered as a combination of both and information system.

Many of the ideas which form the part of MI are found in other academic disciplines. These

disciplines are

Management accounting

Management and organisation theory

peration research

8omputer sciences

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Management A%%o$nting

"ccounting is broadly classified into two parts:

a% Financial accounting: 7inancial accounting is concerned with measurement of income

for specific periods of time and reporting of financial positions at the end of the period.

Its reports are more oriented towards investors. "s a result, it has limited usefulness for

managerial decision ma#ing.

b% Management accounting: Management accounting includes the methods and concepts

necessary for effective planning, choosing among alternative business actions and control

through evaluation and interpretation of performances. Thus, management accounting

provides inputs for decision ma#ing in the areas of planning and control.

The MI concept includes much of management accounting; however, the support systems

which provide users with access to data and models are beyond the scope of traditional

management accounting. 8ontemporary organisational practices are to retain the cost and budget

analysis within the management accounting function and to have the MI function provides data

and model support.

Management and *rganisation !.eory

MI is a support system for effective organisational functioning. Therefore, it draws heavily

from management and organisation theory. The fields of management and organisation theory

provide several concepts which are #ey to understanding of the function of a MI in an

orgainsation.ome of the major concepts are behavioural theory of organisational and individual

decision ma#ing, group processes and group decision ma#ing, individual motivation and

leadership processes, organisational change process and organisation structure design. The

#nowledge of these concepts helps the designer of MI to ascertain the types of decisions made

at different levels of an organisation and to align the MI to provide relevant information for

ma#ing these decisions.

*perations esear%.

perations research is applied decision theory where the managers see# rationality while dealing

with problems through the use of scientific, logical or mathematical means. In operation

research, various elements of a problem on which decision is to be made are e)pressed in

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numerical forms, the relationship among these elements are established and the decision is made

on the basis of analysis of these relationships. peration research is *uite relevant to MI

because it has developed procedures for the analysis and computer based solutions of many types

of decision problems. The systematic approach to problem solving, use of models, and computer

based solutions are generally incorporated in the decision support system concept of MI.

Comp$ter S%ien%e

8omputer science deals with hardware and software of computer systems. The #nowledge of

computer science has enabled speedy information storage, processing and retrieval. 8omputer

science is important for MI because it covers topics such as algorithms, computation, software

and data structures. 6owever, modern MI is not merely an e)tension of computer science but

the emphasis in MI is on the applications of the technical capabilities that computer science has

made available.

If we loo# at various academic disciplines contributing to the development of MI as a separate

field of study, we find that MI is an e)tension of management and organisation theory because

the fundamental processes of MI are more related to organisational processes and effectiveness.

Therefore, MI is also treated as a subsystem of management system. ther academic disciplines

help in designing and operating MI.

"#"3 S$4-systems of MIS

Management Information ystems $MI%, referred to as Information Management and ystems,

is the discipline covering the application of people, technologies, and procedures collectively

called information systems, to solving business problems.

'MIS' is a planned system of collecting, storing and disseminating data in the form of

information needed to carry out the functions of management.

The system approach applies e*ually to management information system as well. The

management information system receives input from various internal and e)ternal sources. These

inputs are processes through the MI to produce the desired output, which may be in turn used

for different managerial tas# within the organization. MI has several subsystems which are

interdependent, interrelated and interacting.

!.e S$4-Systems 2it.in t.e MIS are:

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Comp$ter System:The computer system as a subsystem of MI includes the 6ardware,the operating system and the software.

Management:The management system as a subsystem of MI includes the managerialtas# relating to the effective functioning. It includes planning, control and co(ordination,

human resource development etc.

System 9ngineering:The system engineering subsystem of MI includes system designand development as well as system maintenance. The synergistic combination of

hardware and system engineering is evolved into software engineering. oftware

engineering as defined by 7ritz aucer, as the establishment and use of engineering

principals in order to obtain economically feasible software that is reliable and wor#s

efficiently on real machines.

Appi%ation: The application subsystem of MI includes various application systems,which are developed and implemented to the desire outputs. This process of integration

of business system with management information system involves three #ey elements.

They are:

!e%.noogy: Technology provides the bridge between the business systems, their

information needs on one side, the means of providing these information needs on the

other. Technology provides the tools and techni*ues that help to generate the information

that are re*uired for the business system. election of the appropriate technology has got

bearing on effectiveness of the bridge.

Peope: 4eople generate the re*uired information and apply the same for business

planning, control and decision ma#ing. The attitude and aspiration of the people involved

in generating and utilizing the information has a bearing on effective use of integrated

system.

B$siness: The business function and the environment in which the business organization

have an impact on the entire integration e)ercise.

It is an information system, which collects data from internal and e)ternal resources of an

organization and processes that data to fulfill the needs of all the levels of management.

7rom other point of view there are four types of subsystems:

!ransa%tion Pro%essing System (!PS)

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These systems are used to record day(to(day transaction of an organization. These are very low(

level information system. ales processing system is a transaction system.

Management Information System (MIS)

M9 is the natural e)tinction to the transaction processing system. These systems get data from

T4 and create reports according the names of different levels of management.

'e%ision S$pport System ('SS)

! also get data from T4 and used it to help decision ma#ers in ma#ing their decision. These

systems are just to help decision ma#er and these system cannot ma#e decision ma#er.

*ffi%e S$pport System (*SS)

These are information system, which provide support in office wor# li#e ward processor, spread

sheet etc. These information systems also provide facilities of communication of information.

"#"/ Mis%on%eptions or Myt.s a4o$t Management Information System

The concept of management information systems is not clearly understood by many developers

$viz. programmers and systems analysts% as well as end users, namely, managers, of these very

systems. There are many misconceptions about a management information system. These are the

following:

"ny computer(based information system is an MI.

"ny reposting system is an MI.

MI is a philosophy and not any specific entity.

MI is a management techni*ue

MI is a bunch of technologies.

MI is an implementation of organizational systems and procedures. MI is a course on

file structures.

tudy of MI is about the use of computers.

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More data in reports means more information for management.

"ccuracy in reports is of vital importance.

"ny computer based information system is an MI, to many who are not very familiar with

computers and management. Many people who are new to computers, thought of computed

generated reports as accurate and mare credible than handwritten or typed reports. This is

possibly because to the assumption that computer being fast and accurate machine, the report

generated by it also must provide reliable information. Fet, there are still some instances

wherein, inaccurate information and wrong reports are produced, we can clearly state that

computer generated information are not always reliable and accurate.

Management information system is a philosophy as well. 4hilosophy as defined by ?i#ipedia,

3is the study of general and fundamental problems concerning matters such as e)istence,#nowledge, values, reason, mind, and language. It is distinguished from other ways of addressing

fundamental *uestions by its critical, generally systematic approach and its reliance on rational

argument5. ince, MI involves decision ma#ing, and thus critical thin#ing is needed in ma#ing

decisions and these must be supported by accurate data, information system should, help

management in decision ma#ing. -ot all the computer generated information is useful to

management. Thus, MI is a philosophy which is far deeper and comple) than the mundane

processing of large amounts of corporate data by computers.

The e)ceptional decline prices of modern computers and communication devices have made

information systems *uite feasible, thus enabling them to play a significant role in the world

today. 7urther development in new generation technologies, has to evolve to e)ploit the

emerging technologies. The very fact that technology innovations are fast increasing, and new

devices and software #eeps on developing, managers are having a hard time coping with these

fast changes. Fet, the benefits by this continuous development cannot be ignored.

The traditional e)perts on rganization and Methods find information systems highly useful in

formalizing and implementing the organization(wide systems and procedures. In the past,

activities such as collecting, organizing, codifying and continuous monitoring of systems and

procedures, which are consistent across an organization, remained un attainable goals due to the

enormous amount of manual effort needed for such implementation. Management information

systems, than#s to the speed of computers and their ability to process large volumes of data

distributed across the organization, provide a way to implement organization(wide systems and

procedures.

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http://en.wikipedia.org/wiki/Reasonhttp://en.wikipedia.org/wiki/Reasonhttp://en.wikipedia.org/wiki/Reasonhttp://en.wikipedia.org/wiki/Reasonhttp://en.wikipedia.org/wiki/Reason


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The very size of data spread across the organization necessitates the use of file structures to

capture, store, and process the data to provide useful information. !esign and development of

such file processing systems and database management ystem re*uires a formal study of such

techni*ues as an academic discipline. To many students of 8omputer cience and Management,

MI is merely a course on file structures and a discipline that is far less demanding intellectually,

since such a course involves very little of abstract mathematics as compared to a course on

algorithms or discrete Mathematics.

?hile it is necessary to understand what MI is, it is e*ually important to understand what MI

is not.

"#"1 S$%%ess and ai$re of MIS:

Most organizations use MI more successfully than other organizations. Throughhardware,

software and technology available are the latest and the best; its use is morefor the collection and

storage of data and its elementary processing. There are some factors, which ma#e MI, a

success while there are some factors, which ma#e it a failure.

a%tors %ontri4$ting to s$%%ess of MIS

If MI is to be a success, then it should have all the features listed below :

. MI is integrated into the management function. It sets clear objectives to ensure that

MI focuses on the major issues of the business. "lso ade*uate development resourcesare provided and human 2 organizational barriers to progress are removed.


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. MI recognizes that a manager is a human being and therefore, the systems must

consider all the human behavioral aspects in the process of management.

C. MI recognizes that the different information needs for different objectives must be met

with. The globalization of information in isolation from the different objectives leads totoo much information and its non use.

J. MI is easy to operate and therefore, the design of MI has such good features whichma#e up a user friendly design.

=. MI recognizes that the information needs become obsolete and new needs emerge. The

MI design, therefore, has a potential capability to *uic#ly meet newer and newer needsof information.

. MI concentrates on developing the information support to manage critical success

factors. It concentrates on the mission critical applications serving the needs of the topmanagement.

a%tors %ontri4$ting to fai$res

Many times, MI is a failure. The common factors which are responsible for this are as follows:

. MI is conceived as a data processing and not as an information system.

. Knderestimating the comple)ity in the business systems and not recognizing it in the MI

design leads to problems in the successful implementation.

B. "de*uate attention is not given to the *uality control aspects of the inputs, the process

and the outputs leading to insufficient chec#s and controls in MI.

G. MI is developed without streamlining the transaction processing systems in the

organizations.

H. 1ac# of training and appreciation that the users of the information and the generators of

the data are different, and they have to play an important role in the MI.

. MI does not meet certain critical and #ey factors of its users, such as a response to the

*uery on the database, an inability to get the processing done in a particular manner, lac#

of user friendly system and the dependence on the system personnel.

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C. " belief that the computerized MI can solve all the management problems of planning

and control of the business.

J. 1ac# of administrative discipline in following the standardized systems and procedures,

wrong coding and deviating from the system specifications result in incomplete and

incorrect information.

=. MI does not give perfect information to all the users in the organization. "ny attempt

towards such a goal will be unsuccessful because every user has a human ingenuity, biasand certain assumptions not #nown to the designer. MI cannot ma#eup these by

providing perfect information.

"#"5 !ransa%tion Pro%essing System

" transa%tion pro%essing systemis a type of information system. T4s collect, store, modify,

and retrieve the transactions of an organization. " transaction is an event that generates or

modifies data that is eventually stored in an information system. Transaction processing system

#eeps on organization running smoothly by automating the processing of the large amount of

paper wor# that must be handled daily. These systems include the accurate recording of

transactions as well as the control procedures used in issuing such documents as pay chec#s,

invoices, customer statements, etc. 7or e)ample, the transaction processing system of a

departmental store can record customer purchases, prepare billing and boo#ing of order from

suppliers and inter(relate these tas#s into an overall accounting system. The transactionprocessing system of a college helps performing such tas#s as enrolling students in courses,

billing students for tuition, and issuing pay che*ue .

The main purpose of this system is to allow the businesses that are using it be able to #eep trac#

of all of the business transactions that they have made in a manner that is both reliable and

effective, despite whether their business is online or offline. Typical e)amples of such systems

would be "irline 9eservation ystems, an#ing ystems, or the "ccounting ystem of almost

any large company.

Transaction processing systems were among the earliest computerized systems. Their primary

purpose is to record, process, validate, and store transactions that ta#e place in the various

functional areasAof a business for future retrieval and use. " transaction processing system $T4%

is an information system that records company transactions $a transaction is defined as an

e)change between two or more business entities%.

LTransaction processing systems $T4% are cross(functional information systems that process

data resulting from the occurrence of business transactions.

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LTransactions are events that occur as part of doing business, such as sales, purchases, deposits,

withdrawals, refunds, and payments. Transaction processing activities are needed to capture and

process data, or the operations of a business would grind to a halt.

!ypes of !ransa%tions

?hen a department orders office supplies from the purchasing department, an internal

transaction occurs, when a customer places an order for a product, an e)ternal transaction occurs.

Interna !ransa%tions:Those transactions, which are internal to the company and are relatedwith the internal wor#ing of any organization. 7or e)ample 9ecruitment 4olicy, 4romotion

4olicy, 4roduction policy etc

9terna !ransa%tions: Those transactions, which are e)ternal to the organization and are

related with the e)ternal sources, are regarded as 0)ternal Transaction. 7or e)ample sales,

purchase etc.

C.ara%teristi%s of !ransa%tion Pro%essing Systems

. " T4 records internal and e)ternal transactions for a company. It is a repository of data that

is fre*uently accessed by other systems

. " T4 is also the main lin# between the organization and e)ternal entities, such as customerssuppliers, distributors, and regulatory agencies

B. T4 e)ist for the various functional areas in an organization, such as finance, accounting,

manufacturing, production, human resources, mar#eting *uality control, engineering, andresearch and development. Kntil a few years ago, many companies viewed the T4 for each

business function as separate entity with little or no connection to other systems in the company.

Today, however, many companies are trying to build cross(functional T4 to promote the free

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e)change of information among different business units. This is a desirable goal, but is still very

difficult to achieve

"#"7 9e%$ti,e S$pport System

"n ee%$ti,e information system$0I% is a type of management information system intended

to facilitate and support the information and decision(ma#ing needs of senior e)ecutives by

providing easy access to both internal and e)ternal information relevant to meeting the strategicgoals of the organization. It is commonly considered as a specialized form of decision support

system $!%. n 9e%$ti,e S$pport System (9SS)is designed to help senior management

ma#e strategic decisions. It gathers analyses and summarizes the #ey internal and e)ternalinformation used in the business.

0)ecutive upport ystem $0% is a reporting tool $software% that allows you to turn your

organization&s data into useful summarized reports. These reports are generally used by e)ecutivelevel managers for *uic# access to reports coming from all company levels and departments such

as billing, cost accounting, staffing, scheduling, and more.

In addition to providing *uic# access to organized data from departments, some 0)ecutive

upport ystem tools also provide analysis tools that predict a series of performance outcomesover time using the input data. This type of 0 is useful to e)ecutives as it provides possible

outcomes and *uic# reference to statistics and numbers needed for decision(ma#ing.

Ad,antages of 9IS

0asy for upper(level e)ecutives to use, e)tensive computer e)perience is not re*uired in

operations 4rovides timely delivery of company summary information

Information that is provided is better understood

7ilters data for management

Improves trac#ing information

ffers efficiency to decision ma#ers

'isad,antages of 9IS

ystem dependent

1imited functionality, by design

Information overload for some managers

enefits hard to *uantify

6igh implementation costs

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ystem may become slow, large, and hard to manage

-eed good internal processes for data management

May lead to less reliable and less secure data

"#"6 'e%ision S$pport System

!ecision upport ystems $!% are a specific class of computerized information system thatsupports business and organizational decision ma#ing activities. " properly designed ! is an

interactive software based system intended to help decision ma#ers compile useful information

from raw data, documents, personal #nowledge, andAor business models to identify and solve

problems and ma#e decisions

! is an application of 6ebert imon model, as discussed, the model has three phases :

i% Intelligence

ii% !esign

iii% 8hoice

The ! basically helps in the information system in the intelligence phase where the objective

is to identify the problem and then go to the design phase for solution. The choice of selectioncriteria varies from problem to problem.

It is therefore, re*uired to go through these phases again and again till satisfactory solution isfound. In the following three phase cycle, you may use in*uiry, analysis, and models and

accounting system to come to rational solution.

These systems are helpful where the decision ma#er calls for comple) manipulation of data and

use of several methods to reach an acceptable solution using different analysis approach. The

decision support system helps in ma#ing a decision and also in performance analysis. ! canbe built around the rule in case of programmable decision situation. The rules are not fi)ed or

predetermined and re*uires every time the user to go through the decision ma#ing cycle as

indicated in 6erbert imon model.

Attri4$tes:

i% ! should be adaptable and fle)ible.

ii% ! should be interactive and provide ease of use.

iii% 0ffectiveness balanced with efficiency $benefit must e)ceed cost%.

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iv% 8omplete control by decision(ma#ers.

v% 0ase of development by $modification to suit needs and changing environment% end users.

vi% upport modeling and analysis.

vii% !ata access.

'SS C.ara%teristi%s :

i% upport for decision ma#ers in semi structured and unstructured problems.

ii% upport managers at all levels.

iii% upport individuals and groups.

iv% upport for interdependent or se*uential decisions.

v% upport intelligence, design, choice, and implementation.

vi% upport variety of decision processes and styles

Benefits of 'SS

. Improves personal efficiency. Increases organizational control

B. 0ncourages e)ploration and discovery on the part of the decision ma#er

G. peeds up problem solving in an organization

H. 7acilitates interpersonal communication

. 4romotes learning or training

C. Eenerates new evidence in support of a decision

J. 8reates a competitive advantage over competition

=. 9eveals new approaches to thin#ing about the problem space

. 6elps automate managerial processes

"#" *ffi%e A$tomation System (*AS)

" could also be considered as computer(based information system that collects, process,

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store and transmit electronic message, document and other form of communication among

individual, wor# group and organizations.

" can be accessed anywhere at any time, employees can trac# their e)penses right in the

system. There is no need for employees to bac# trac# e)penses, fill out separate spreadsheets,

etc. nce submitted, the manager receives instant notification, further reducing the time it ta#es

to create and approve e)pense reports.

ffice automation is the action of using varied e*uipment, machinery and software to store,

manipulate and electronically capture or transfer data necessary for business.

!ifferent office activities can be broadly grouped into following types of operations:

'o%$ment Capt$re: !ocuments originating from outside sources li#e incoming mails, notes,

handouts, charts, graphs etc. need to be preserved.

e%ording Utii+ation of eso$r%es: Includes record #eeping in respect to specific resourcesutilized by office personnel.

8alculations: Include the usual calculator functions li#e routine arithmetic operations for bill

passing, interest calculations etc

'o%$ment Creation: 8onsists of preparation of documents, dictation, editing of te)ts etc. and

ta#es up major part of the secretary&s time.

e%eipts and 'istri4$tion: Includes distribution of correspondence to designated recipients.

7iling, earch, 9etrieval and 7ollow up: 9elated to filling, inde)ing, searching of documents,which ta#es up significant time.

The application of computers to handle the office activities is also termed as offi%e a$tomation#

B99I!S of *ffi%e A$tomation Systems :

8ommunication 2 accuracy of communication flows.

8ycle time between preparation of messages and receipt of messages at the recipients&

end.

8osts of office communication in terms of time spent by e)ecutives, cost of

communication lin#s is reduced

Categories of Comp$ter 4ased *ffi%e A$tomation System:

!et Pro%essing Systems

Most commonly used components of the " ( office communication ta#es place in

writing

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"utomate development of documents such as letters, reports, memos etc. They permit use

of standard stored information to produce personalized documents ( 1 #eying effort ft

errors

May be simple word processing systems 9 des#top publishing systems. The des#top

publishing systems help in quick production of multiple copies of the document with

quality printing. !es#top publishing systems are supported with printers, scanners etc.

9- 'o%$ment Management Systems

Kseful in capturing information contained in documents, stored for future reference and

communicate the relevant parts to the users as and when re*uired. ystems linked to

".

Kseful in internal communication. 7or e)ample, the loan application form filed in a

branch of a ban# can be accessed by the sanctioning officer for scrutiny at the head office

or any office for scrutiny of loan proposals.

Kseful in remote access of documents that is almost impossible with manual systems

1ocation of e)ecutive becomes irrelevant for access to documents. Thus, these systems

can be very useful in an office environment where traveling eecutives share wor# spacein the office.

9- Message Comm$ni%ation Systems

usiness enterprises use various communication systems for sending 2 receiving

messages. These include telephone, mail and facsimile $7a)%, etc. ffer economy via(

reduced time in sending or receiving the message, reliability of message and cost.

>(asic components of Message 8ommunication ystems$0(mail, 7a), Doice(mail% :$i% 9-MAI: Darious features of electronic mail are stated below:. Integration with other Information systems: 0nsures accuracy and *uic# access. roadcasting and 9erouting: ending message to many recipients simultaneously.

0.g. branch circular ( could be re(routedAforwarded withAwithout any change orattachment

B. 0lectronic transmission: Transmission of messages ft confirmation of transmission

with e(mail is electronic, *uic# and the reliableG. 0conomical: for both formal communication 2 informal communication within

enterprise.H. 4ortability: 4hysical location of the recipient and sender irrelevant. "ccessed fromanywhere

(ii) ACSIMI9 (A;)

% 0(communication of images of documents over telephone lines.


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and receive fa) messages using common communication resources. These servers

have the ability to receive fa) messages and automatically reroute them to the

intended recipient after viewing it at the central computer. imilarly, themanagers in an enterprise can leave the fa) messages to the server which will

send it to the intended recipient automatically.

(iii) V*IC9 MAI

" variation of email in which messages are transmitted as digitized voice.

9ecipient of voice mail has to dial a voice mail service or access the e(mail

bo) using the specified e*uipment and he can hear the spo#en message inthe voice of the sender. The secured type of voice mail service may re*uire

the recipient to enter identification codebefore the access is granted to the

stored information.

!ee%onferen%ing and Video-%onferen%ing Systems

8onducing a business meeting involving more than two persons located at two or more different

places. time 2 cost of meeting as the participants do not have to travel

"udio or video conferencing with or without use of computer systems.

6owever, computer based teleconferencing has the advantage of fle)ibility in terms of

pre(recorded presentations and integration with other information systems. ased on 48,digital camera and visual communication software. The communication lin#s are still

*uite e)pensive

"#&0 'ifferen%e 4et2een MIS < Comp$ter system

MIS C*MPU!9 S=S!9M

Management information system refers to the

formal system installed in an organization forpurposes of collecting, organizing, storing and

processing data and presenting useful information

to management at various levels.

8omputer system is designed to

process the data and giveinformation to the user.

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usinesses use management information systems

to inform them on how to resource their

companies and initiatives in the areas of people,

technology and information li#e statistics.

8omputer system is an operating

system that is programmed in

various ways to allow for many

different tas#s.

The main thrust is streamlining information useful

to the Management

The main focus of computer system

is to facilitate processing of data

with speed and accuracy.

&Management Information ystem& does more than

just an ordinary computer system does, it has a

different purpose which helps in decision ma#ing

8omputer system do not have such

a specific tas# and do not supply

specific information for decision

ma#ing

MI wor#s with help of computer system. 8omputer system does not re*uire

MI to operate its functions.

NManagement Information ystem/ is mainly

needed by management.

N8omputer ystem/ need is not

restricted to management alone.

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Unit1 Notes questionnaire

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