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

information systems to provide efficiency and effectiveness of strategic

decision making. The concept may include systems termed transaction
processing system, decision support system, expert system, or executive
information system. The term is often used in the academic study of
businesses and has connections with other areas, such as information
systems, information technology, informatics, e-commerce and computer
science; as a result, the term is used interchangeably with some of these
areas.
Management Information Systems (plural) as an academic discipline
studies people, technology, organizations, and the relationships among
them.[1] This definition relates specifically to "MIS" as a course of study in
business schools. Many business schools (or colleges of business
administration within universities) have an MIS department, alongside
departments of accounting, finance, management, marketing, and may
award degrees (at undergraduate, master, and doctoral levels) in
Management Information Systems.
MIS professionals help organizations to maximize the benefit from
investments in personnel, equipment, and business processes
Information is a critical resource in the operation and management of organizations.
Timely availability of relevant information is vital for effective performance of
managerial functions such as planning, organizing, leading, and control. An
information system in an organization is like the nervous system in the human body:
it is the link that connects all the organization's components together and provides
for better operation and survival in a competitive environment. Indeed, today's
organizations run on information.
The term information system usually refers to a computer-based system, one that is
designed to support the operations, management, and decision functions of an
organization. Information systems in organizations thus provide information support
for decision makers. Information systems encompass transaction processing
systems, management information systems, decision support systems, and
strategic information systems.
Information consists of data that have been processed and are meaningful to a user.
A system is a set of components that operate together to achieve a common
purpose. Thus a management information system collects, transmits, processes,
and stores data on an organization's resources, programmes, and accomplishments.
The system makes possible the conversion of these data into management
information for use by decision makers within the organization. A management
information system, therefore, produces information that supports the management
functions of an organization (Davis & Olson, 1985; Lucas, 1990; McLeod, 1995).

Chapter 18 - Establishing a management

information system
A. Ramesh Babu, Y. P. Singh, and R.K. Sachdeva
A. Ramesh Babu is Senior Scientist (Agriculture Extension); Y. P. Singh is
Professor, Division of Agricultral Extension, Indian Agricultural Research Institute,
New Delhi; and R. K. Sachdeva is Professor of Management and Head, Computer
Centre, Indian Institute of Public Administration, New Delhi, India.
Basic concepts
Role of MIS in the management of agricultural extension programmes
Design of a MIS in an agricultural extension organization
Need for automation
Organization of a database
Networking and interactive processing
System alternatives and evaluation: Centralization versus decentralization
End-user computing
Illustrative computer-based MIS
Summary
References

Information is a critical resource in the operation and management of organizations.

Timely availability of relevant information is vital for effective performance of
managerial functions such as planning, organizing, leading, and control. An
information system in an organization is like the nervous system in the human body:
it is the link that connects all the organization's components together and provides
for better operation and survival in a competitive environment. Indeed, today's
organizations run on information.
The term information system usually refers to a computer-based system, one that is
designed to support the operations, management, and decision functions of an
organization. Information systems in organizations thus provide information support
for decision makers. Information systems encompass transaction processing
systems, management information systems, decision support systems, and
strategic information systems.
Information consists of data that have been processed and are meaningful to a user.
A system is a set of components that operate together to achieve a common
purpose. Thus a management information system collects, transmits, processes,
and stores data on an organization's resources, programmes, and accomplishments.
The system makes possible the conversion of these data into management

information for use by decision makers within the organization. A management

information system, therefore, produces information that supports the management
functions of an organization (Davis & Olson, 1985; Lucas, 1990; McLeod, 1995).

Basic concepts
Data versus Information
Data refers to raw, unevaluated facts, figures, symbols, objects, events, etc. Data
may be a collection of facts lying in storage, like a telephone directory or census
records.
Information is data that have been put into a meaningful and useful context and
communicated to a recipient who uses it to make decisions. Information involves
the communication and reception of intelligence or knowledge. It appraises and
notifies, surprises and stimulates, reduces uncertainty, reveals additional
alternatives or helps eliminate irrelevant or poor ones, and influences individuals
and stimulates them to action. An element of data may constitute information in a
specific context; for example, when you want to contact your friend, his or her
telephone number is a piece of information; otherwise, it is just one element of data
in the telephone directory.
Computers have made the processing function much easier. Large quantities of data
can be processed quickly through computers aiding in the conversion of data to
information. Raw data enter the system and are transformed into the system's
output, that is, information to support managers in their decision making.
Characteristics of Information
The characteristics of good information are relevance, timeliness, accuracy, costeffectiveness, reliability, usability, exhaustiveness, and aggregation level.
Information is relevant if it leads to improved decision making. It might also be
relevant if it reaffirms a previous decision. If it does not have anything to do with
your problem, it is irrelevant. For example, information about the weather conditions
in Paris in January is relevant if you are considering a visit to Paris in January.
Otherwise, the information is not relevant.
Timeliness refers to the currency of the information presented to the users.
Currency of data or information is the time gap between the occurrence of an event
in the field until its presentation to the user (decision maker). When this amount of
time is very short, we describe the information system as a real-time system.
Accuracy is measured by comparing the data to actual events. The importance of
accurate data varies with the type of decisions that need to be made. Payroll
information must be exact. Approximations simply will not suffice. However, a
general estimate of how much staff time was devoted to a particular activity may
be all that is needed.
Value of Information

Information has a great impact on decision making, and hence its value is closely
tied to the decisions that result from its use. Information does not have an absolute
universal value. Its value is related to those who use it, when it is used, and in what
situation it is used. In this sense, information is similar to other commodities. For
example, the value of a glass of water is different for someone who has lost his way
in Arctic glaciers than it is to a wanderer in the Sahara Desert.
Economists distinguish value from cost or price of a commodity incurred to produce
or procure the commodity. Obviously, the value of a product must be higher than its
cost or price for it to be cost-effective.
The concept of normative value of information has been developed by economists
and statisticians and is derived from decision theory. The basic premise of the
theory is that we always have some preliminary knowledge about the occurrence of
events that are relevant to our decisions. Additional information might modify our
view of the occurrence probabilities and consequently change our decision and the
expected payoff from the decision. The value of additional information is, hence, the
difference in expected payoff obtained by reduced uncertainty about the future
event.
Information supports decisions, decisions trigger actions, and actions affect the
achievements or performance of the organization. If we can measure the differences
in performance, we can trace the impact of information, provided that the
measurements are carefully performed, the relationships among variables are well
defined, and possible effects of irrelevant factors are isolated. The measured
difference in performance due to informational factors is called the realistic value or
revealed value of information.
For most information systems, particularly those supporting middle and top
management, the resulting decisions often relate to events that are not strictly
defined and involve probabilities that cannot be quantified. The decision-making
process often is obscure and the outcomes are scaled by multiple and incomparable
dimensions. In such cases, we may either attempt to perform a multiattribute
analysis or derive an overall subjective value. The subjective value reflects people's
comprehensive impression of information and the amount they are willing to pay for
specific information (Ahituv, Neumann, & Riley, 1994).
Information as an Aid to Decision Making
Simon (1977) describes the process of decision making as comprising four steps:
intelligence, design, choice, and review. The intelligence stage encompasses
collection, classification, processing, and presentation of data relating to the
organization and its environment. This is necessary to identify situations calling for
decision. During the decision stage, the decision maker outlines alternative
solutions, each of which involves a set of actions to be taken. The data gathered
during the intelligence stage are now used by statistical and other models to
forecast possible outcomes for each alternative. Each alternative can also be
examined for technological, behavioural, and economic feasibility. In the choice
stage, the decision maker must select one of the alternatives that will best
contribute to the goals of the organization. Past choices can be subjected to review

during implementation and monitoring to enable the manager to learn from

mistakes. Information plays an important role in all four stages of the decision
process. Figure 1 indicates the information requirement at each stage, along with
the functions performed at each stage and the feedback loops between stages.
Classification of Management Information Systems
There are various types of management information systems. Mason and Swanson
(1981) describe four categories of management information systems: (1) databank
information system, (2) predictive information system, (3) decision-making
information system, and (4) decision-taking information system. The classification is
based on the level of support that the information system provides in the process of
decision making. Sachdeva (1990) comprehensively presents these four types of
systems:
Databank Information System. The responsibility of this information system is to
observe, classify, and store any item of data which might be potentially useful to
the decision maker. Examples of the kind of data that might be recorded in such a
database for a given village, region, or area are as follows:

Number of farms
Number of units of arable land (hectares, fedans, acres)
Average farm size
Amounts of selected farm inputs applied annually
Production per year on a unit of land for selected crops

A second example of data that might be recorded in a database (this time involving
data internal to the organization) is as follows:
Number of extension staff by category and assigned to a particular village,
region, or area
Number of work hours devoted by staff to selected concerns for a particular
village, region, or area
Total extension salary costs and other expenses by village, region, or area
Number of demonstrations conducted for selected farm technologies by village,
region, or area
Number of on-farm trials conducted for selected farm technologies by region or
area
Number of radio, TV, and print media releases regarding selected farm
technologies by time period and region or area
Figure 1. Role of information in the decision process.

Each of these databases can be summarized and converted to single tabular

presentations of information of interest to management. When information from two
or more time periods is compared, trends can be observed.
Predictive Information System. This system moves beyond pure data collection and
the determination of trends over time. Predictive information systems provide for
the drawing of inferences and predictions that are relevant to decision making. If
data from the above examples were to be used in this way, it is possible to obtain
information useful for making predictions or for drawing inferences. For example,
tables containing the following information for a given village, region, or area might
be produced:
The ratio between the number of farms and the various categories of extension
staff members

 The ratio between the amount of farmland and the various categories of
extension staff members
Amount of extension financial operating resources allocated per year to selected
farmer problems or concerns
Amount of extension financial resources, both salary and operating expenses,
allocated per year to selected extension approaches to solving different farmer
problems or concerns
Information obtained from these kinds of analyses is normally summarized in a twoway tabular format. And likewise, the information often is compared over time.
Managers can then use such information to make predictions, for example to
forecast costs of particular undertakings for budgeting purposes or as a basis for
predicting results if a given change is made, such as change in the number of
demonstrations with a given change in staffing.
Decision-Making Information System. This system goes one step further in the
process of decision making and incorporates the value system of the organization or
its criteria for choosing among alternatives. An extension organization's values are
many and varied. They include concerns for resolving farmer problems, increasing
and providing for stability of farmer incomes, and improving the quality of farm life.
But they also including and providing for stability of farmer incomes, and improving
the quality of farm life. But they also include an intent to provide well for staff
members (training, adequate salaries, etc.) and to aid in the process of bringing
about rural economic development.
Table 1. Information Groups in India's Agricultural Extension System.

Levels

Groups

Types of Information Needed

Central

Extension commissioner, joint

commissioners, directors, joint
directors, etc. of the directorate of
extension, ministry of agriculture

(1) Information on human resources,

plans, and budgets for various extension
services
(2) Statewide monitoring and evaluation
of activities completed

State

Director of agriculture, additional

(1) Districtwide information on extension
director, joint directors, etc. of the state programmes, activities, expenditures,
department of agriculture
etc
(2) Research-extension linkages and
coordination with other allied
departments such as animal husbandry
and horticulture

District

District agricultural officers (DAOs)

(1) Information on extension resources

and constraints at subdivision and block
levels
(2) Training requirements of staff at
subdivision and block levels

Subdivisio Subdivisional agricultural officers

n

(1) Field demonstration programmes,

activities planned and implemented by
subject-matter specialists (SMSs) (zone)
at the block level
(2) Technical programme and
constraints identified at the block level

Block
(county)

(1) Performance of VEWs in terms of

achievements in extension activities
(2) Field-level problem of assessment of
beneficiaries' response to various
extension programmes

Agricultural extension officers

Information regarding these various attributes helps managers to make more

enlightened decisions. Examples of ways that an extension organization uses
information from a decision-making information system are as follows:
Change in specific farm outputs (yields, practices) following selected extension
activities
Change in staff productivity following selected interventions (in-service training,
better transport, etc)
Comparison of relative costs and relative effectiveness of alternative extension
delivery methods
Analysis of economic returns to farmers who adopt recommended practices as
compared to those who do not
Decision-Taking Information System. Examples of decision-taking information
systems are not usually found in an extension organization. This is a decision
system in which the information system and the decision maker are one and the
same. Management is so confident in the assumptions incorporated in the system
that it basically relegates its power to initiate action to the system itself. Airplanes
carry automatic pilot systems, which are an example of a decision-taking system.
Once activated, the system itself keeps the plane on course and at the proper speed
and altitude (according to parameters determined by the pilot). Another example of
decision-taking information systems is found in modem factory production. In

automobile production, continuous inventories of parts are maintained by computer

as cars move down an assembly line. Orders are placed automatically by the
computer when additional parts are needed. This is done without the intervention of
a manager.
The choice of an appropriate management information system (MIS) category
primarily depends on the nature of the decisions it supports. While unstructured
decisions may use MIS-category (I), the highly structured ones, such as production
schedules in an industry, may use MIS-category (iv). Further, Banerjee and
Sachdeva (1995) observe that "as the deep structure of the decision problem
becomes more and more understood, we may move to higher level of MIS i.e., from
MIS-category (I) to MIS-category (ii); and MIS-category (ii) to MIS-category (iii); and
so on."

Role of MIS in the management of agricultural extension

programmes
National agricultural extension systems, especially in developing countries, tend to
be very large. For example, in India, the national agricultural extension system
employs about 125,000 people. Extension managers at various levels need relevant
information in order to make effective decisions. In the absence of such information,
they act only on the basis of their intuition and past experience. Data that have
been processed, stored, and presented properly will aid them in analysing situations
and to make effective decisions.
As suggested above, at every phase of the management process, managers need
information in order to make effective decisions. This we call management
information. It does not include purely functional information or technical
information, such as packages of practices for rice or wheat cultivation.
Management information is the information required by managers as they make
their decisions, such as the number of extension personnel employed by category,
their training requirements, career development plans, job descriptions, budgets,
forecasts, benchmark surveys, reports on socioeconomic conditions of people
served, and existing facilities (Ramesh Babu & Singh, 1987).
The main purpose of management information systems is to provide management
information to decision makers at various levels in the organization. Specifically, in
an agricultural extension organization, MIS is needed:
1. To plan the most effective allocation of resources, for example, the allocation of
extension personnel under a T & V extension system, the need for communications
and training equipment and facilities, mobility, the amounts of required operational
resources
2. To choose between alternative courses of action, whether to conduct a study on
the impact of the T & V system with the resources on hand or hire an expert to
investigate

3. To control day-to-day operations, for example, comparing the actual results

achieved and those planned under the T & V system.

Design of a MIS in an agricultural extension organization

The following are suggested steps to follow when designing a MIS for a national
agricultural extension system.
Step One: Assessing Information Needs for Planning, Monitoring, and
Evaluation
An investigation needs to be conducted into the types of decisions that extension
managers have to make. For example, village extension workers (VEWs) seek
solutions to their problems from their supervisors. In turn, supervisors need to be in
a position to resolve these problems and to document how problems were solved for
future reference.
State-level managers also need information to resolve problems. They are
concerned with implementing extension programmes district by district. They need
information on staffing, transport, research-extension linkages, staff training
activities, and successes (or lack of them) in solving technical problems. Feedback is
needed from field staff and farmers on farmer problems and on which
recommended practices are helpful. State-level managers need to know something
about the amounts, kinds, and combinations of media support (i.e., print, radio,
television) that have been used for various efforts. They need to know if external
factors have limited the success of particular efforts such as supply of credit or farm
inputs and they need some assessment of farmers' responses to extension
programmes (Raheja & Jai Krishna, 1991, p. 84).
Step Two: Deciding the Levels of Information Groups, Information
Frequency, and Content
The number of information groups within an agricultural extension organization has
to be decided because each group potentially will require a different type of
information. As an example, in India, the reorganized national agricultural extension
system can be grouped as shown in Table 1.
Data processing consists of identifying each item of data and systematically placing
it within a scheme that categorizes data items on the basis of some common
characteristic or feature. Data not organized into a meaningful pattern can serve
almost no useful purpose to those who must use them to make decisions. A
computer can help in processing the data effectively. Rao (1985) suggested the use
of computers in agricultural extension in India. He proposed that computer
programmes be focused on district and subdivisional levels. In that way, information
collected can be viewed in terms of the crops that are likely to be grown,
agroclimatic conditions, soil types, irrigation facilities, resources of the farmers, and
availability of various farm inputs.

Documentation (storage and retrieval) involves storing items of information in an

orderly manner. Storing information means recording it on storage media from
which it can be made available when needed.
Storage media are materials such as ordinary office paper, magnetic tapes,
magnetic disks, microfilms, film strips, and a few other devices. Once the
information is recorded on these storage media, the system can generate, on
demand, information required for making decisions, solving problems, or performing
analyses and computations. Information retrieval refers to the ability to take
different types of data in the storage media and to array information in some
desired and meaningful format. A properly designed storage and retrieval system
matches the related variables efficiently and accurately. In some cases, it even
suggests alternative courses of action for management to take.
Presentation of information should be in a form and format suitable to the needs of
extension managers. Generally, information is presented in reports, statistical
summaries, analyses, and so forth in the form of text, figures, charts, tables, and
graphs. The presentation of information should be precise, clear, and appealing.
Step Three: Ensuring System Flexibility and Adaptability
Flexibility means the ability to retrieve information from a system in whatever form
it may be needed by decision makers. Therefore, data need to be collected in some
detail so that they can be rearranged or summarized according to the needs of
managers. But system design should not be too complex because it must first serve
the needs of the lowest levels of management (i.e., subdistrict) that are likely to be
instrumental in collecting important components of the original data. In addition,
the system also must serve the needs of the district, regional, state or provincial,
and national levels. Therefore, considerable care must be taken in assessing what
types of information are required by management at the different levels. At the
same time, effort must be made to ensure that the information collected meets
acceptable standards of accuracy, timeliness, and coverage for each level.

Need for automation

An automated MIS system contains data just as a manual system does. It receives
input, processes input, and delivers the processed input as output. Some input
devices allow direct human-machine communication, while others require data to be
recorded on an input medium such as a magnetizable material (specially coated
plastic flexible or floppy disks and magnetic tapes). The keyboard of a workstation
connected directly to a computer is an example of a direct input device. Use of
automation makes it possible to store immense quantities of information, to avoid
many of the errors that find their way into manual records, and to make calculations
and comparisons that would be practically impossible in a manual system.

Organization of a database
Data are usually generated at the field level through transaction-processing
systems, but once the data are captured, any echelon along the organizational

hierarchy may use them, provided that information requirements have been well
defined, appropriate programmes have been implemented, and a means has been
arranged for the sharing of the data. This would imply that the same data can be
used by different sets of programmes; hence we distinguish between the database
(a set of data) and the applications (a set of programmes). In a decision support
system (DSS), this set of programmes is the model base (Keen & Morton, 1978).
The term database may refer to any collection of data that might serve an
organizational unit. A database on a given subject is a collection of data on that
subject that observes three criteria: comprehensiveness (completeness),
nonredundancy, and appropriate structure. Comprehensiveness means that all the
data about the subject are actually present in the database. Nonredundancy means
that each individual piece of data exists only once in the database. Appropriate
structure means that the data are stored in such a way as to minimize the cost of
expected processing and storage (Awad & Gotterer, 1992).
The idea of a large corporate database that can be flexibly shared by several
applications or model bases has been realized by means of software packages
specially devised to perform such tasks. These packages, called database
management systems (DBMSs), are available in the market under different trade
names such as ORACLE, SYBASE, INGRES, FOXBASE, and dBASE.

Networking and interactive processing

The two principal blocks that facilitate development and use of MIS are DBMS and
telecommunications. The former makes data integration possible, while the latter
brings information closer to the end users, who constitute nodes in a
telecommunication network. The notion of telecommunications implies that some
geographical distance exists between the computer site and the users' locations
and that data are electronically transmitted between them. Remote applications
may be executed between two floors in the same building, two offices in the same
city, two offices on the same continent, or two places on opposite sides of the globe
(Martin, 1990).

System alternatives and evaluation: Centralization versus

decentralization
A completely centralized information system handles all processing at a single
computer site, maintains a single central database, has centralized development of
applications, provides central technical services, sets development priorities
centrally, and allocates computer resources centrally. The system's remote users
are served by transporting input and output data physically or electronically.
A completely decentralized system may have no central control of system
development, no communication links among autonomous computing units, and
stand-alone processors and databases at various sites. Each unit funds its own
information-processing activities and is totally responsible for all development and
operation.

An advantage of centralized information systems is that they provide for

standardization in the collection of data and the release of information. There also
are some economies of scale. A centralized system reduces the need for multiple
hardware, software, space, personnel, and databases. It may be possible to recruit
more qualified personnel in a central facility.
Observations indicate that user motivation and satisfaction are increased under a
decentralized environment. This is attained because users feel more involved and
more responsible, systems are better customized to their specific needs, and they
usually get better response time in routine operations as well as in requests for
changes.
It is likely that for national agricultural extension systems, neither a completely
centralized nor a completely decentralized system is desirable. While it may be
useful to decentralize hardware and software resources at different locations, the
development of applications and provision of technical services may better be
centralized.

End-user computing
The widespread use of personal computers and computer-based workstations has
brought with it the age of end-user computing. End-user computing is a generic
term for any information-processing activity performed by direct end users who
actually use terminals or microcomputers to access data and programmes. The
manager as end user may be provided with powerful software (like DBMS) for
accessing data, developing models, and performing information processing directly.
This has brought computing directly under the control of the end users and
eliminates their dependence on the information systems specialist and the rigidities
of predesigned procedures. They may now make ad hoc queries of information and
analyse it in various ways. They may write programmes, or may often use readymade programmes stored in the computer, using the computing power of a local PC
or the mainframe to which it is connected.
Figure 2. A typical MIS for a national extension system.

Illustrative computer-based MIS

A national agricultural extension system is a nationwide system managed by the
national government. In India, agriculture is a state subject under the division of
powers between the national and the state levels. Nevertheless, the national
government supplements the financial resources of the states and provides
coordination at the national level. The state's administrative machinery is divided
into districts, districts into subdivisions, subdivisions into blocks. A block is a group
of villages and the basic unit for the administration of an agricultural extension
programme. Data collected at the block level need to be integrated at higher
administrative levels to provide an integrated view at the district and state levels to
support planning, monitoring, and decision making.

Keeping in view the requirements of the extension system and the budget
constraints of the states, a typical design of the computer-based MIS is shown in
Figure 2.
However, the actual design may vary with the size of the state and other
considerations. An integrated database for the entire state may be supported by a
mainframe/minicomputer at the state headquarters. Suitable programmes for the
analysis of data may be designed to provide an interactive decision support system
at the state level. Each district and subdivision may be provided with a mini/micro
computer, depending on the volume of data to be handled. The computers in the
districts and subdivisions may be networked with the state computer. The local data
may be stored and processed in the district/subdivision, and the shared data with
appropriate level of aggregation may be transmitted to the state headquarters to
update the integrated database. The districts and subdivisions would have direct
access to the integrated database with proper authorizations assigned to them
through their passwords. The blocks may have only the input-output terminals
connected to the subdivision computer to feed data to the subdivision and make online inquiries as and when necessary.

Summary
In this chapter, we have defined and described the basic concepts of a management
information system. The characteristics of good information, namely, relevance,
timeliness, accuracy, cost-effectiveness, reliability, usability, exhaustiveness, and
aggregation level, have been described. The role of information systems in the
process of decision making and the value of information have been explained. Four
types of MIS, namely, databank information system, predictive information system,
decision-making information system, and decisiontaking information system, have
been presented. The role of MIS in management of agricultural extension
programmes and the conceptual design of a MIS in an agricultural extension
organization have been described.
Basic computer concepts have been explained. The advantages and disadvantages
of centralized versus decentralized systems have been examined. The need for
organizing databases and their integration and the need for programmes for
decision analysis to evolve a decision support system have been explained. An
assessment of hardware, software, and networking requirements for a typical
computer-based MIS for a national agricultural extension system have been
illustrated.

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Sanders, D. H. (1988). Computers today (3rd ed.). New York: McGraw-Hill.

Simon, H. A. (1977). The new science of management decision. New Jersey:

Prentice-Hall.
Singh, Y. P., & Ramesh Babu, A. (1985). Basic management issues in extension.
Indian Journal of Extension Education, 27 (1 & 2), 20-31.
Wentling, T. L., & Wentling, R. M. (1993). Introduction to microcomputer
technologies. Rome: FAO.

Management Information Systems

All businesses share one common asset, regardless of the type of business. It
does not matter if they manufacture goods or provide services. It is a vital
part of any business entity, whether a sole proprietorship or a multinational
corporation. That common asset is information.
Information enables one to determine the need to create new products and
services. Information tells companies to move into new markets or to
withdraw from other markets. Without information, the goods do not get
made, the orders are not placed, the materials are not procured, the
shipments are not delivered, the customers are not billed, and the business
cannot survive.
But information has far lesser impact when presented as raw data. In order
to maximize the value of information, it must be captured, analyzed,
quantified, compiled, manipulated, made accessible, and shared. In order to
accomplish those tasks, an information system (IS) must be designed,
developed, administered, and maintained.

INFORMATION SYSTEMS

An information system is a computer system that provides management and

other personnel within an organization with up-to-date information regarding
the organization's performance; for example, current inventory and sales. It
usually is linked to a computer network, which is created by joining different
computers together in order to share data and resources. It is designed to
capture, transmit, store, retrieve, manipulate, and or display information
used in one or more business processes. These systems output information
in a form that is useable at all levels of the organization: strategic, tactical,
and operational.
Systems that are specifically geared toward serving general, predictable
management functions are sometimes called management information
systems (MIS). A good example of an MIS report is the information that goes
into an annual report created for the stockholders of a corporation (a
scheduled report). The administration of an information system is typically
the province of the MIS or information technology (IT) department within an
organization.
Some applications have infringed on the familiar MIS landscape. Enterprise
resource planning (ERP) software and executive information systems (EIS)
both provide packaged modules and programs that perform the same
functions as traditional MIS, but with greater functionality, flexibility, and
integration capabilities.
Mainframes. The original computerized information systems were based on
mainframes. Mainframe is a term originally referring to the cabinet
containing the central processor unit or main frame of a room-filling
computer. Firms such as IBM were instrumental in the mid-twentieth century
in helping businesses integrate and operate information systems and
technology into their business operations. After the emergence of smaller

minicomputer designs in the early 1970s, the traditional large machines

were described as mainframe computers, or simply mainframes. The term
carries the connotation of a machine designed for batch rather than
interactive use, though possibly with an interactive time-sharing operating
system retrofitted onto it. It has been conventional wisdom in most of the
business community since the late 1980s that the mainframe architectural
tradition is essentially dead, having been swamped by huge advances in
integrated circuit design technology and low-cost personal computing.
Despite this, in the twenty-first century there are still uses for mainframe
systems that store vast amounts of data.
The Internet. The Internet has opened up further developments in
information systems and the exchange of information via Web-based e-mail,
intranets, and extra-nets. These technologies allow for much faster data and
information exchange and greater access for more users. Web-casting and
videoconferencing allow for real-time information exchanges. Mobile
computing technologies accessed by handheld devices, such as multifunctional mobile phones, personal digital assistants, and podcasting (via
iPods), are offering further modes of communication.
Information systems are also crucial if a firm decides to practice
telecommuting, or teleworking. Telecommuting is defined as when
employees can conduct full operations without being inside the business's
office, instead working from a location such as an employee's home.
Telecommuting is seen as an asset both in improving employees' quality of
life, and with allowing an organization more flexibility. A 2005 article in
Technovation noted a firm's ability to adapt to telecommuting as a policy is
directly linked to its information technology resources. As some scholars

note, these advances in technology can fundamentally change the nature of

management.
However, some have also argued that security of a company's data has
increased in importance with the increase in information technology. A 2007
Software World article stated that such practices as telecommuting make
information systems vulnerable to attack. Due to the range of threats to
information systems (including viruses and hackers), information security
such as passwords, firewalls, and so forthare crucial to an organization.

INFORMATION SYSTEM DESIGN AND

ADMINISTRATION
The design of an information system is based on various factors. Cost is a
major consideration, but there certainly are others to be taken into account,
such as the number of users; the modularity of the system, or the ease with
which new components can be integrated into the system, and the ease with
which outdated or failed components can be replaced; the amount of
information to be processed; the type of information to be processed; the
computing power required to meet the varied needs of the organization; the
anticipated functional life of the system and/or components; the ease of use
for the people who will be using the system; and the requirements and
compatibility of the applications that are to be run on the system.
There are different ways to construct an information system, based upon
organizational requirements, both in the function aspect and the financial
sense. Of course, the company needs to take into consideration that
hardware that is purchased and assembled into a network will become
outdated rather quickly. It is almost axiomatic that the technologies used in
information systems steadily increase in power and versatility on a rapid
time scale. Perhaps the trickiest part of designing an information system

from a hardware standpoint is straddling the fine line between too much and
not enough, while keeping an eye on the requirements that the future may
impose.
Applying foresight when designing a system can bring substantial rewards in
the future, when system components are easy to repair, replace, remove, or
update without having to bring the whole information system to its knees.
When an information system is rendered inaccessible or inoperative, the
system is considered to be down.
A primary function of maintaining an information system is to minimize
downtime, or hopefully, to eradicate downtime altogether. The costs created
by a department, facility, organization, or workforce being idled by an
inoperative system can become staggering in a short amount of time. The
inconvenience to customers can cost the firm even more if sales are lost as a
result, in addition to any added costs the customers might incur.
Another vital consideration regarding the design and creation of an
information system is to determine which users have access to which
information. The system should be configured to grant access to the different
partitions of data and information by granting user-level permissions for
access. A common method of administering system access rights is to create
unique profiles for each user, with the appropriate user-level permissions
that provide proper clearances.
Individual passwords can be used to delineate each user and their level of
access rights, as well as identify the tasks performed by each user. Data
regarding the performance of any user unit, whether individual,
departmental, or organizational can also be collected, measured, and
assessed through the user identification process.

The open systems interconnection (OSI) seven-layer model attempts to

provide a way of partitioning any computer network into independent
modules from the lowest (physical/hardware) layer to the highest
(application/program) layer. Many different specifications can exist at each of
these layers.
A crucial aspect of administering information systems is maintaining
communication between the IS staff, who have a technical perspective on
situations, and the system users, who usually communicate their concerns or
needs in more prosaic terminology. Getting the two sides to negotiate the
language barriers can be difficult, but the burden of translation should fall
upon the IS staff. A little patience and understanding can go a long way
toward avoiding frustration on the part of both parties.
There is more to maintaining an information system than applying technical
knowledge to hardware or software. IS professionals have to bridge the gap
between technical issues and practicality for the users. The information
system should also have a centralized body that functions to provide
information, assistance, and services to the users of the system. These
services will typically include telephone and electronic mail help desk type
services for users, as well as direct contact between the users and IS
personnel.

INFORMATION SYSTEM FUNCTIONS

Document and record management. Documenting and recording
management may well be the most crucial aspect of any information system.
Some examples of types of information maintained in these systems would
be accounting, financial, manufacturing, marketing, and human resources.
An information system can serve as a library. When properly collected,
organized, and indexed in accordance

with the requirements of the organization, its stored data becomes

accessible to those who need the information.
The location and retrieval of archived information can be a direct and logical
process, if careful planning is employed during the design of the system.
Creating an outline of how the information should be organized and indexed
can be a very valuable tool during the design phase of a system. A critical
feature of any information system should be the ability to not only access
and retrieve data, but also to keep the archived information as current as
possible.
Collaborative tools. Collaborative tools can consist of software or
hardware, and serve as a base for the sharing of data and information, both
internally and externally. These tools allow the exchange of information
between users, as well as the sharing of resources. As previously mentioned,
real-time communication is also a possible function that can be enabled
through the use of collaborative tools.
Data mining. Data mining, or the process of analyzing empirical data,
allows for the extrapolation of information. The extrapolated results are then
used in forecasting and defining trends.
Query tools. Query tools allow the users to find the information needed to
perform any specific function. The inability to easily create and execute
functional queries is a common weak link in many information systems. A
significant cause of that inability, as noted earlier, can be the communication
difficulties between a management information systems department and the
system users.
Another critical issue toward ensuring successful navigation of the varied
information levels and partitions is the compatibility factor between

knowledge bases. For maximum effectiveness, the system administrator

should ascertain that the varied collection, retrieval, and analysis levels of
the system either operate on a common platform, or can export the data to a
common platform. Although much the same as query tools in principle,
intelligent agents allow the customization of the information flow through
sorting and filtering to suit the individual needs of the users. The primary
difference between query tools and intelligent agents is that query tools
allow the sorting and filtering processes to be employed to the specifications
of management and the system administrators, and intelligent agents allow
the information flow to be defined in accord with the needs of the user.

KEY POINTS
Managers should keep in mind the following advice in order to get the most
out of an information system:

Use the available hardware and software technologies to support the

business. If the information system does not support quality and productivity,
then it is misused.

Use the available technologies to create and facilitate the flow of

communication within your organization and, if feasible, outside of it as well.
Collaboration and flexibility are the key advantages offered for all involved
parties. Make the most of those advantages.

Determine if any strategic advantages are to be gained by use of your

information system, such as in the areas of order placement, shipment
tracking, order fulfillment, market forecasting, just-in-time supply, or regular
inventory. If you can gain any sort of advantage by virtue of the use of your
information system, use it.

Use the quantification opportunities presented by your information

system to measure, analyze, and benchmark the performances of an
individual, department, division, plant, or entire organization.

INFORMATION SYSTEMS AND OUTSOURCING

With companies outsourcing significant portions of their business operations
(such as supply chain management), information systems can play an
important role. General Motors (GM) is one company that outsourced many
of its information technology operations in 2003. Doing so required
coordinating operations and information systems among GM's internal IT
operations and numerous other companies. One major task in this process
has been standardizing information technology and other software
processes.
Others note that globalization and, indeed, multinational operations would
simply not be possible without sophisticated information systems.
An information system is more than hardware or software. The most integral
and important components of the system are the people who design it,
maintain it, and use it. While the overall system must meet various needs in
terms of power and performance, it must also be usable for the
organization's personnel. If the operation of day-to-day tasks is too daunting
for the workforce, then even the most humble of aspirations for the system
will go unrealized.
A company should not view information systems as ancillary. As
management school professor Petter Gott-schalk notes, information
technology operations should be central to a company's management. The
emergence of the CIO, or chief information officer, as a top management

position also speaks to the importance of information systems and

information technology.
A company will likely have a staff entrusted with the overall operation and
maintenance of the system and that staff will be able to make the system
perform in the manner expected of it. Pairing the information systems
department with a training department can create a synergistic solution to
the quandary of how to get non-technical staff to perform technical tasks. Oft
times, the individuals staffing an information systems department will be as
technical in their orientation as the operative staff is non-technical in theirs.
This creates a language barrier between the two factions, but the
communication level between them may be the most important exchange of
information within the organization. Nomenclature out of context becomes
little more than insular buzzwords.
If a company does not have a formal training department, the presence of
staff members with a natural inclination to demonstrate and teach could
mitigate a potentially disastrous situation. Management should find those
employees who are most likely to adapt to the system and its operation.
They should be taught how the system works and what it is supposed to do.
Then they can share their knowledge with their fellow workers. There may
not be a better way to bridge the natural chasm between the IS department
and non-technical personnel. When the process of communicating
information flows smoothly and can be used for enhancing and refining
business operations, the organization and its customers will all profit.
SEE ALSO Knowledge Management

BIBLIOGRAPHY

Caddy, Ian N., and Mammy M. Helou. Supply Chains and Their Management:
Applications of General Systems Theory. Journal of Retailing and Consumer
Services 14, no. 5 (2007) 319.
Caldelli, A., and M.L. Parmigiani. Management Information System: A Tool for
Corporate Sustainability. Journal of Business Ethics 55, no.2 (2004): 159
171.
Denton, D.K. Focus on Data Context, Not Content. Communications News
40, no. 12 (2003): 50.
Gellis, Harold C. Protecting Against Threats to Enterprise Network Security.
Software World 37, no. 2 (2006): 14.
Gottschalk, Petter. Business Dynamics in Information Technology. Hershey,
PA: Idea Group Publishers, 2007.
Hoffman, Thomas. GM's Global Positioning. Computerworld 26 November
2007.
King, William R., and Paulo Roberto Flor. The Development of Global IT
Infrastructure. Omega 36, no. 3 (June 2008): 486.
Kotabe, Masaaki, Michael J. Mol, and Janet Y. Murray. Outsourcing,
Performance, and the Role of e-Commerce: A Dynamic Perspective.
Industrial Marketing Management 37, no. 1 (2008): 37.
Lail, P.W. Improving IT's Support of Business Strategy. Pulp &Paper 79, no.1
(January 2005): 23.
Lawrence, F.B., D.F. Jennings, and B.E. Reynolds. ERP in Distribution. Mason,
OH: Thomson/South-Western, 2005.

McKenna, Christopher D. The World's Newest Profession. Cambridge, MA:

Cambridge University Press, 2006.
Mitchell, Robert L. Driving Economies of Scale in IT. Computerworld 26
October 2006.
Pawlowski, S. D., and D. Robey. Bridging User Organizations: Knowledge
Brokering and the Work of Information Technology Professionals. MIS
Quarterly 28, no. 4 (2004): 645672.
Prez, Manuela, et al. The Differences of Firm Resources and the Adoption of
Teleworking. Technovation 25, no. 12 (2005): 1476.
Yourdon, Edward. Modern Structured Analysis. Englewood Cliffs: Yourdon
Press, 1989.
Zehir, C., and H. Keskin. A Field Research on the Effects of MIS on
Organizational Restructuring. Journal of American Academy of Business 3
(September 2003): 270279.

TIME

FORMAT

Plenary participatory lecture

TRAINER

OBJECTIVES
At the end of this session, participants should be able to understand and appreciate:
1.Principles and elements of MIS
2.The relationship between organizational structure and MIS
3.Information requirements for MIS
4.Different types of MIS

5.The process of developing a MIS

6.Criteria for MIS
7.Strategies for determining MIS design
INSTRUCTIONAL MATERIALS

Exhibit 1

Management information systems

Exhibit 2

MIS elements

Exhibit 3

Steps in planning

Exhibit 4

Requirements during the planning process

Exhibit 5

Controlling

Exhibit 6

Requirements for controlling

Exhibit 7

Decision making

Exhibit 8

System

Exhibit 9

Perceiving the system

Exhibit 10

Basic parts of the organization

Exhibit 11

Why a systems approach

Exhibit 12

Information

Exhibit 13

MIS as a pyramid structure

Exhibit 14

Conceptual basis of MIS

Exhibit 15

Implications of the organizational structure for MIS

Exhibit 16

Information requirements for MIS

Exhibit 17

Strategies for determining information requirements

Exhibit 18

Strategy for determining data requirements

Exhibit 19

Types of MIS

Exhibit 20

The MIS process

Exhibit 21

MIS criteria

Exhibit 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 subsystems 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-todate 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 SYSTEMS

Definition

"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 ELEMENTS

Management functions

Planning
Controlling
Decision making

Information system

Management information

EXHIBIT 3

STEPS IN PLANNING

1. Selecting objectives

2. Identifying activities required to achieve the stipulated objectives

3. Describing the resources or skills, or both, necessary to perform the activities

4. Defining the duration of each activity to be undertaken

5. Determining the sequence of the activities

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

Publishing.
EXHIBIT 4

REQUIREMENTS DURING THE PLANNING PROCESS

1. 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 objective
2. Measuring actual performance against the set standards
3. 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 CONTROLLING

1. Defining expectations in terms of information attributes

2. 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 SYSTEM

1. 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 subsystems 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 ORGANIZATION

1.

The individual

2.

The formal and informal organization

3.

Patterns of behaviour arising out of role demands of the organization

4.

The role perception of the individual

5.

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 subsystems 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 MIS

1. 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 MIS

1. Assessing information requirements

2. 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.
2.
3.
4.

Asking
Deriving from an existing information system
Synthesizing from characteristics of the utilizing system
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 REQUIREMENTS

1. 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
uncertainties
4. Evaluate the combined effects of the process uncertainties on overall
requirements uncertainty
5. Select a primary strategy for requirements determination based on the overall
requirements uncertainty

Uncertainty level

Low

Strategy

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 MIS

1.
2.
3.
4.

Databank information system

Predictive information system
Decision making information system
Decision taking information system

EXHIBIT 20

THE MIS PROCESS

1. Understand the organization

2. Analyse the organization's information requirements
3. Plan overall strategy
4. Review
5. Preliminary analysis
6. Feasibility assessment
7. Detailed fact finding
8. Analysis
9. Design
10. Development
11. Cutover
12. Obtain conceptual schema
13. Recruit database administrator
14. Obtain logical schema
15. Create data dictionary
16. Obtain physical schema
17. Create database
18. Modify data dictionary
19. Develop sub-schemas
20. Modify database
21. 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 concept

Management and the MIS process
Systems approach
Organizational structure and MIS
Information requirements for MIS
Types of MIS
Process of MIS
Criteria for MIS
Strategies 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 dayto-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 Systems

Hierarchy 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

Reporting critical change variables, organizational change, or

relationships, and use of multiple channels in a semi-confusing system

change

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
Analysis

2. 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 decisionmaker 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 organization

2. Analyse the information requirements of the organization

3. Plan overall strategy

4. Review

5. Preliminary analysis

6. Feasibility assessment

7. Detailed fact finding

8. Analysis

9. Design

10. Development

11. Cutover

12. Obtain conceptual schema

13. Recruit database administrator

14. Obtain logical schema

15. Create data dictionary

16. Obtain physical schema

17. Create database

18. Modify data dictionary

19. Develop sub-schemas

20. Modify database

21. Amend database

Adapted 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 redesign 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.

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