Management Information System (MIS)

Management
Information System
(MIS)

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 Management Information System (MIS)

Faculty: By:
Mr. Manish Kumar Sharma Sir
Vikas,
Kshitiz &
Himanshu

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 Management Information System (MIS)

Acknowledgement

Presenting this project in the present form, we keenly feel to recognize the
obligations of the personalities behind the screen. We wish to acknowledge
the encouragement and inspiration we received from our Faculty Mr. Manish
Kumar Sharma. We present our heartful gratitude to our project leader, who
immersed him in the subject matter and kept us simulated throughout this
endeavor.

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 Management Information System (MIS)

Management Information System: Definition

MIS (management information

systems) is a general term for the computer systems in an enterprise that
provide information about its business operations. It's also used to refer to the
people who manage these systems. Typically, in a large corporation, "MIS" or
the "MIS department" refers to a central or centrally-coordinated system of
computer expertise and management, often including mainframe systems but
also including by extension the corporation's entire network of computer
resources.
The MIS program is intended to be the first step in a life-long learning
experience in the exciting and dynamic field of information technology. It
provides a strong foundation for advancement and success in IT careers and
ventures.
Basically, Management Information Systems is the study of the use of
computers in business. This course shows students how Information Systems
are used to support critical business operations and achieve strategic
objectives. The elements or corporate technology are studied and its
application to specific business situations is discussed. Students develop a
small information system using Microsoft Access and use Excel as a decision
support tool.
In the beginning, business computers were used for the practical business of
computing the payroll and keeping track of accounts payable and receivable.
As applications were developed that provided managers with information
about sales, inventories, and other data that would help in managing the
enterprise, the term ‘MIS’ arose to describe these kinds of applications.
Today, the term is used broadly in a number of contexts and includes (but is
not limited to): decision support systems, resource and people management
applications, project management, and database retrieval applications.

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What is Management Information System?

Management Information System is a general name for the academic

discipline covering the application of information technology to business
problems.
As an area of study it is also referred to as Information Technology
Management. The study of information systems is usually a commerce and
business administration discipline, and frequently involves software
engineering, but also distinguishes itself by concentrating on the integration of
computer systems with the aims of the organization. The area of study should
not be confused with computer science which is more theoretical in nature
and deals mainly with software creation, and not with computer engineering,
which focuses more on the design of computer hardware. IT service
management is a practitioner-focused discipline centering on the same
general domain.
In business, information systems support business processes and operations,
decision-making, and competitive strategies.

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Purpose & Scope of Management Information System

The Purpose and Scope of MIS can be defined as “The combination of human
and computer based resources that results in the collection, storage, retrieval,
communication and use of data for the purpose of efficient management of
operations and for business planning”.

In order to get a better grip on the activity of information processing, it is

necessary to have a formal system which should take care of the following
points:
● Handling of a voluminous data.
● Confirmation of the validity of data & transaction.
● Complex processing of data and multi-dimensional analysis.
● Quick search & retrieval.
● Mass Storage.
● Communication of the information system to the user on time.
● Fulfilling the changing needs of the information.
The management information system uses computers and communication
technology to deal with these points of supreme importance.

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Role of Management Information System

The role of the MIS in an organisation can be compared to the role of heart in
the body. The information is the blood and MIS is the heart. In the body, the
heart plays the role of supplying pure blood to all the elements of the body
including the brain. The heart works faster and supplies more blood when
needed. It regulates and controls the incoming pure blood, processes it and
sends it to the destination in the quantity needed. It fulfills the needs of blood
supply to human body in normal course and also in crisis.
The MIS plays exactly the same role in the organisation. The system ensures
that an appropriate data is collected from the various sources, processed, and
sent further to all the needy destinations. The system is expected to fulfill the
information needs of an individual, a group of individuals, the management
functionaries: the managers & the top management.
The MIS satisfies the diverse needs through a variety of systems such as
Query Systems, Analysis Systems, Modelling Systems and Decision Support
Systems. The MIS helps in Strategic Planning, Management Control,
Operational Control and Transaction Processing.

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Background of Management Information System

A Management Information System (MIS) is a system or process that
provides the information necessary to manage an organization effectively.
MIS and the information it generates are generally considered essential
components of prudent and reasonable business decisions.
The importance of maintaining a consistent approach to the development,
use, and review of MIS systems within the institution must be an ongoing
concern of both bank management and OCC examiners. MIS should have a
clearly defined framework of guidelines, policies or practices, standards, and
procedures for the organization. These should be followed throughout the
institution in the development, maintenance, and use of all MIS.
MIS is viewed and used at many levels by management. It should be
supportive of the institution's longer term strategic goals and objectives. To
the other extreme it is also those everyday financial accounting systems that
are used to ensure basic control is maintained over financial recordkeeping
activities.
Financial accounting systems and subsystems are just one type of
institutional MIS. Financial accounting systems are an important functional
element or part of the total MIS structure. However, they are more narrowly
focused on the internal balancing of an institution's books to the general
ledger and other financial accounting subsystems. For example, accrual
adjustments, reconciling and correcting entries used to reconcile the financial
systems to the general ledger are not always immediately entered into other
MIS systems. Accordingly, although MIS and accounting reconcilement totals
for related listings and activities should be similar, they may not necessarily
balance.
An institution's MIS should be designed to achieve the following goals:
● Enhance communication among employees.
● Deliver complex material throughout the institution.
● Provide an objective system for recording and aggregating information.
● Reduce expenses related to labor-intensive manual activities.
● Support the organization's strategic goals and direction.
Because MIS supplies decision makers with facts, it supports and enhances
the overall decision making process. MIS also enhances job performance
throughout an institution. At the most senior levels, it provides the data and
information to help the board and management make strategic decisions. At
other levels, MIS provides the means through which the institution's activities
are monitored and information is distributed to management, employees, and
customers.
Effective MIS should ensure the appropriate presentation formats and time
frames required by operations and senior management is met. MIS can be
maintained and developed by either manual or automated systems or a
combination of both. It should always be sufficient to meet an institution's
unique business goals and objectives. The effective deliveries of an
institution's products and services are supported by the MIS. These systems
should be accessible and useable at all appropriate levels of the organization.
MIS is a critical component of the institution's overall risk management
strategy. MIS supports management's ability to perform such reviews. MIS

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should be used to recognize, monitor, measure, limit, and manage risks. Risk
management involves four main elements:
● Policies or practices.
● Operational processes.
● Staff and management.
● Feedback devices.
Frequently, operational processes and feedback devices are intertwined and
cannot easily be viewed separately. The most efficient and useable MIS
should be both operational and informational. As such, management can use
MIS to measure performance, manage resources, and help an institution
comply with regulatory requirements. One example of this would be the
managing and reporting of loans to insiders. MIS can also be used by
management to provide feedback on the effectiveness of risk controls.
Controls are developed to support the proper management of risk through the
institution's policies or practices, operational processes, and the assignment
of duties and responsibilities to staff and managers.
Technology advances have increased both the availability and volume of
information management and the directors have available for both planning
and decision making. Correspondingly, technology also increases the
potential for inaccurate reporting and flawed decision making. Because data
can be extracted from many financial and transaction systems, appropriate
control procedures must be set up to ensure that information is correct and
relevant. In addition, since MIS often originates from multiple equipment
platforms including mainframes, minicomputers, and microcomputers, controls
must ensure that systems on smaller computers have processing controls that
are as well defined and as effective as those commonly found on the
traditionally larger mainframe systems.
All institutions must set up a framework of sound fundamental principles that
identify risk, establish controls, and provide for effective MIS review and
monitoring systems throughout the organization. Commonly, an organization
may choose to establish and express these sound principles in writing. The
OCC fully endorses and supports placing these principles in writing to
enhance effective communications throughout the institution. If however,
management follows sound fundamental principles and governs the risk in the
MIS Review area, a written policy is not required by the OCC. If sound
principles are not effectively practiced, the OCC may require management to
establish written MIS policies to formally communicate risk parameters and
controls in this area.
Sound fundamental principles for MIS review include proper internal controls,
operating procedures and safeguards, and audit coverage.

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Impact of the Management Information System

Since the MIS plays a very important role in the organisation, it creates an
impact on the organisation’s functions, performance and productivity.
The impact of MIS on the functions is
in its management. With a good MIS support, the management of marketing,
finance, production and personnel becomes more efficient. The tracking and
monitoring of the functional target becomes easy.
The MIS creates another impact in the organisation which relates to the
understanding of the business itself. The MIS begins with the definition of a
data entity and its attributes. It uses a dictionary of data, entity and attributes,
respectively, designed for information generation in the organisation.
The MIS calls for a systemisation of the business operations for an effective
system design. This leads to streamlining of the operations which complicate
the system design. It improves the administration of the business by bringing
a discipline in its operations as everybody is required to follow and use
systems & procedures. This process brings a high degree of professionalism
in the business operations.
Since the goals and objectives of the MIS are the products of business goals
& objectives, it helps indirectly to pull the entire organisation in one direction
towards the corporate goals and objectives by providing the relevant
information to the people in the organisation.

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Learning Objectives of MIS

● Identify the changes taking place in the form and use of decision support
in E-business enterprises.
● Identify the role and reporting alternatives of management information
systems.
● Describe how online analytical processing can meet key information needs
of managers.
● Explain the decision support system concept and how it differs from
traditional management information systems.
● Explain how executive information systems can support the information
needs of executives and managers.
● Identify how neural networks, fuzzy logic, genetic algorithms, virtual reality,
and intelligent agents can be used in business.
Give examples of several ways expert systems can be used in business
decision-making situations.

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The Functional Support Role in MIS

It can also be called Data Base Management System (DBMS) wherein
maximum utilization in an efficient manner based on the organisational needs
is obtained by analyzing, processing and referencing of Data Base. Not only
for the business, but for all kinds of organisations such as Disaster
Management Organisation for using it as Disaster Management Information
System.
Business processes and operations support function are the most basic. They
involve collecting, recording, storing, and basic processing of data.
Information systems support business processes and operations by:
● Recording and storing accounting records including sales data,
purchase data, investment data, and payroll data.
● Processing such records into financial statements such as income
statements, balance sheets, ledgers, and management reports, etc.
● Recording and storing inventory data, work in process data,
equipment repair and maintenance data, supply chain data, and other
production/operations records.
● Processing these operations records into production schedules,
production controllers, inventory systems, and production monitoring
systems.
● Recording and storing such human resource records as personnel
data, salary data, and employment histories.
● Processing these human resources records into employee expense
reports, and performance based reports.
● Recording and storing market data, customer profiles, and customer
purchase histories, marketing research data, advertising data, and
other marketing records.
● Processing these marketing records into advertising elasticity reports,
marketing plans, and sales activity reports.
● Recording and storing business intelligence data, competitor analysis
data, industry data, corporate objectives, and other strategic
management records.
● Processing these strategic management records into industry trends
reports, market share reports, mission statements, and portfolio
models.
The bottom line is that the information systems use all of the above to
implement, control, and monitor plans, strategies, tactics, new products, new
business models or new business ventures.

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The Decision Support Role in MIS

The business decision-making support function goes one step further. It

becomes an integral part -- even a vital part -- of decision-making. It allows
users to ask very powerful "What if…?" questions: What if we increase the
price by 5%? What if we increase price by 10%? What if we decrease price by
5%? What if we increase price by 10% now, then decrease it by 5% in three
months? It also allows users to deal with contingencies: If inflation increases
by 5% (instead of 2% as we are assuming), then what do we do? What do we
do if we are faced with a strike or a new competitive threat? An organization
succeeds or fails based on the quality of its decisions. The enhanced ability to
explore "what if" a question is central to analyzing the likely results of possible
decisions and choosing those most likely to shape the future as desired.
"Business decision-making support function" is a phrase likely to quicken the
pulse of no one but an accountant, but, in fact, it is all about turning wonderful
dreams into solid realities.

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The Communication Decision Support System Role

Information systems can support a company's competitive positioning.
Here are three levels of analysis:
● The supports for help in piloting the chain of internal value. They are
the most recent and the most pragmatic systems within the reach of
the manager. They are the solutions to reductions of costs and
management of performance. They are typically named "Business
Workflow Analysis" (BWA) or of "Business Management Systems p2p".
Tool networks, they ensure control over piloting the set functions of a
company. The real-time mastery in the costs of dysfunctions cause
distances from accounts, evaluation and accounting that are presented
in the evaluation and qualitative reports.
● All successful companies have one (or two) business functions that
they do better than the competition. These are called core
competencies. If a company's core competency gives it a long term
advantage in the marketplace, it is referred to as a sustainable
competitive advantage. For a core competency to become a
sustainable competitive advantage it must be difficult to mimic, unique,
sustainable, superior to the competition, and applicable to multiple
situations. Other examples of company characteristics that could
constitute a sustainable competitive advantage include: superior
product quality, extensive distribution contracts, accumulated brand
equity and positive company reputation, low cost production
techniques, patents and copyrights, government protected monopoly,
and superior employees and management team. The list of potential
sustainable competitive advantage characteristics is very long.
However, some experts hold that in today's changing and competitive
world, no advantage can be sustained in the long run. They argue that
the only truly sustainable competitive advantage is to build an
organization that is so alert and so agile that it will always be able to
find an advantage, no matter what changes occur.
Information systems often support and occasionally constitute these
competitive advantages. The rapid change has made access to timely and
current information critical in a competitive environment. Information systems,
like business environmental scanning systems, support almost all sustainable
competitive advantages. Occasionally, the information system itself is the
competitive advantage. One example is Wal-Mart. They used an extranet to
integrate their whole supply chain. This use of information systems gave Sam
Walton a competitive advantage for two decades. Another example is Dell
Computer. They used the internet to market custom assembled PC's. Michael
Dell is still benefiting from this low-cost promotion and distribution technique.
Other examples are eBay, Amazon.com, Federal Express, and Business
Workflow Analysis.

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The Performance Monitoring Role in MIS

MIS are not just statistics and data analysis, but also assessment of human
capabilities. They have to be used as an MBO (Management by objectives)
tool. They help:
● To establish relevant and measurable objectives,
● To monitor results and performances (reach ratios).
To send alerts, in some cases daily, to managers at each level of the
organization, on all deviations between results and pre-established objectives
and budgets.
The Management Information System Group develops, maintains and
operates software managing a large scope of general purpose data.
The applications enable:
● On-site users to process orders, manage budgets, assets and stocks.
The world-wide ESRF user community to process scientific proposals,
reports, a forms, and safety aspects related to experiments, statistics and
soon experiment scheduling.

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Potential Benefits of MIS Investments

Investing in information systems can pay off for a company in many ways.
● Such an investment can support a core competency. Great companies
invariably have one or two core competencies, something they can do
better than anyone else. This could be anything from new product
development to customer service. It is the heart of the business and no
matter what it is; information technology can support that core
competency. An IT investment in a company's core competency can
create a significant barrier to entry for other companies, defending the
organization's primary turf and protecting its markets and profits.
● It can build supply chain networks. Firms that are a part of an
integrated supply chain system have established relationships of trust
with suppliers. This means faster delivery times, problem-free delivery
and an assured supply. It can also mean price discounts and other
preferential treatment. The inability of new entrants to get onto a supply
chain/inventory management system can be a major barrier to entry.
● It can enhance distribution channel management. As with supplier
networks, investment in distribution channel management systems can
ensure quicker delivery times, problem free delivery, and preferential
treatments. When the distribution channel management system is
exclusive, it can mean some control over access to retailers, and, once
more, a barrier to entry.
● Such an IT investment can help build brand equity. To build a brand,
firms often invest huge sums in advertising. A huge brand name is a
formidable barrier to enter and sustaining it can be facilitated by
investment in marketing information systems and customer relationship
management system.
● Information systems can mean better production processes. Such
systems have become essential in managing large production runs.
Automated systems are the most cost efficient way to organize large
scale production. These can produce economies of scale in promotion,
purchasing, and production; economies of scope in distribution and
promotion; reduced overhead allocation per unit; and shorter break-
even times more easily. This absolute cost advantage can mean
greater profits and revenue.
● IT investment can boost production processes. Information systems
allow company flexibility in its output level. Michael Porter claims that
economies of scale are a barrier to entry, aside from the absolute cost
advantages they provide. This is because, a company producing at a
point on the long-run average cost curve where economies of scale
exist has the potential to obtain cost savings in the future, and this
potential is a barrier to entry.
● Implementing IT experience can leverage learning curve advantages.
As a company gains experience using IT systems, it becomes familiar
with a set of best practices that are more or less known to other firms in
the industry. Firms outside the industry are generally not familiar with
the industry specific aspects of using these systems. New entrants will

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be at a disadvantage unless they can redefine the industries best

practices and leap-frog existing firms.
● IT investment can impact mass customization production processes. IT
controlled production technology can facilitate collaborative, adaptive,
transparent, or cosmetic customization. This flexibility can increase
margins and increase customer satisfaction.
● Leverage IT investment in computer aided design (1). CAD systems
facilitate the speedy development and introduction of new products.
This can create proprietary product differences. Product differentiation
can be a barrier to entry. Proprietary product differences can be used
to create incompatibilities between competing products (as every
computer user knows). These incompatibilities increase consumers’
switching costs. High customer switching costs is a very valuable
barrier to entry (Hey, it worked for Bill Gates.)
● It means expanded E-commerce. Company web sites can be
personalized to each customer’s interests, expectations, and
commercial needs. They can also be used to create a sense of
community. Both of these tend to increase customer loyalty. Customer
loyalty is an important barrier to entry.
● Information systems leverage stability. Technologically sophisticated
firms with multiple electronic points of contact with customers,
suppliers, and others enjoy greater stability. This monumental
appearance of stability can be a barrier to entry, especially in financial
services.
The simple fact that IT investment takes a significant amount of money makes
it a barrier to entry. Anything that increases capital requirements is -- guess
what? -- A barrier to entry.

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Historical Development
The role of business information systems has changed and expanded over
the last four decades.
In the incipient decade (1950s and '60s), “elecsystems” could be afforded by
only the largest organizations. They were used to record and store
bookkeeping data such as journal entries, specialized journals, and ledems”
were used to generate a limited range of predefined reports, including
income statements (they were called P & L’s back then), balance sheets
and sales reports. They were trying to perform a decision making
support role, but they were not up to the task.
By the 1970s “decision support
systems” were introduced. They were interactive in the sense that they
allowed the user to choose between numerous options and configurations.
Not only was the user allowed customizing outputs, they also could configure
the programs to their specific needs. There was a cost though. As part of your
mainframe leasing agreement, you typically had to pay to have an IBM
system developer permanently on site.
The main development in the 1980s was the introduction of decentralized
computing. Instead of having one large mainframe computer for the entire
enterprise, numerous PC’s were spread around the organization. This meant
that instead of submitting a job to the computer department for batch
processing and waiting for the experts to perform the procedure, each user
had their own computer that they could customize for their own purposes.
Many poor souls fought with the vagaries of DOS protocols, BIOS functions,
and DOS batch programming.
As people became comfortable with their new skills, they discovered all the
things their system was capable of. Computers, instead of creating a
paperless society, as was expected, produced mountains of paper, most of it
valueless. Mounds of reports were generated just because it was possible to
do so. This information overload was mitigated somewhat in the 1980s with
the introduction of “executive information systems”. They streamlined the process,
giving the executive exactly what they wanted, and only what they wanted.
The 1980s also saw the first commercial application of artificial intelligence
techniques in the form of “expert systems”. These programs could give
advice within a very limited subject area. The promise of decision making
support, first attempted in management information systems back in the
1960s, had step-by-step, come to fruition.
The 1990s saw the introduction of the Strategic information system. These
systems used information technology to enable the concepts of business
strategy developed by scholars like M. Porter, T Peters, J. Reise, C.
Markides, and J. Barney in the 1980s. The sustainability of these applications
has since been called into question by N. Carr, which Piccoli and Ives, among
others, have countered.
The role of business information systems had now expanded to include
strategic support. The latest step was the commercialization of the Internet,
and the growth of intranets and extranets at the turn of the century.

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Conclusion

Through the MIS, the information can be used as a strategic weapon to

counter the threats to business, make businesses more competitive, and bring
about the organisational transformation through integration. A good MIS also
makes an organisation seamless by removing all the communication barriers.

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Bibliography

● Wikipedia – Online Encyclopedia

● Microsoft Encarta Reference Library

● Google Search Engine

● AltaVista Search Engine

● Ask.com Search Engine

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Remarks

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Tha
nks

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