UNIT 1

MIS
WHAT IS THE SYSTEM IN MIS?

 “The word ‘System’ is derived from the Greek word ‘systema’ which means
an organized relationship among functioning units or components.”
 A system is an orderly grouping of interdependent components linked
together according to a plan to achieve a specific purpose.
 System is a set of interrelated components, with a clearly defined boundary,
working together to achieve a common set of objectives by accepting
inputs and producing outputs in an organized transformation process.
EXAMPLE 1:

 A business organization is a system with its components as:

• Marketing
• Manufacture
• Sales
• Research
• Shipping
• Accounting
• Personnel
• Administrative
 EXAMPLE 2:
 Human body is a biological system
 complex nervous system : brain, spinal cord, nerves and
special sensitive cells under our skin that work together to
make one experience the physical sensations like hot, cold
and so on.
BASIC SYSTEM CONCEPTS
1. Interrelationshipsand interdependence must exist
among the components.
2. The objectives of the organization as a whole have a
higher priority than the objectives of its subsystems.
3. A system must be designed to achieve a predetermined
objective.
 The study of system concepts has three basic
implications:
 For example, computerizing personnel applications
must conform to the organization’s policy on privacy,
confidentiality and security, as well as making selected
data (e.g. payroll) available to the accounting division
TYPES\CLASSIFICATION OF SYSTEM
 Viewing the behavior of a system, a
system can be classified into the
following types:
1.Physical and Abstract Systems
2.Deterministic and Probabilistic Systems
3.Open and Closed Systems
Physical systems
Physical systems are concerned with tangible entities\components i.e. the components
which we can touch.
They can be seen and felt. These tangible entities may be static or dynamic in
operation.
For example, desks and chairs are the static physical parts. Static parts do not
change. An air-conditioning unit is a dynamic physical system which responds to the
environment and changes with time.
Abstract systems
Abstract systems are those systems which are non-physical or these systems are
conceptual.
For example, an educational system: Our social system.
These systems consist of concepts like
•Theories concepts,
•Laws concepts,
•Principles concepts,
•Formula stating relation-ship among large number of variables,
•Equations having large number of variables.
Abstract models are often used to understand physical systems, their components and
interrelationship etc.
Deterministic Systems
Deterministic systems are those systems which are based on
predetermined set of rules.
The behavior of a deterministic system is completely known. The outputs\
results or events are perfectly predictable. There is no uncertainty
involved in defining the outputs of the system for the known inputs.
For example, a computer program.
Interactions between various subsystems is known with certainty.
Probabilistic Systems
Probabilistic systems are not based on predetermined or predefined rules.
In the probabilistic systems, only probabilistic estimates can be given. The
outputs\results or events cannot be predicted with certainty. Such systems
are controlled by chance events.
For example, sale of desert coolers depends on summer; sale of generator
sets depends on power shortage.
In these systems, interactions between various subsystems cannot be
defined with certainty. The system analyst deals almost with such systems.
Open Systems
Systems that interact with their surrounding or external environment are
called open systems.
An open system receives or accepts inputs and delivers outputs to its
environment. This type of system can adapt to changing environmental
conditions.
For example, an information system, a business organization.
Such systems are successful.
Closed systems
Systems that do not interact with their environment are called closed
systems.
A closed system is self-contained. Closed systems usually exist as a
concept only. Such system cannot continue to operate for a long period of
time. Such systems are rare and are unsuccessful.
 Brief idea about the systems approach
 A system is a set of interrelated but separate parts of working towards a
common purpose. A system is composed of related and dependent elements
which when in interaction, from a unitary whole. The arrangement must be
orderly and there must be proper communication facilitating interaction
between elements and finally this interaction should lead to achieve a common
goal.
 Systems approach views the organization as a unified, purposeful
system composed of interrelated parts. Systems approach is based on
the generalization that everything is inter-related and interdependent.
 Systems approach also gives the manager to see the organization as a whole
and as a whole and as a part of the larger external environment. A systems
oriented manager would make decisions only after they have identified impact
or these decisions on all other departments and the entire organization.
 Following are the features of Systems Approach:
• One of the most important characteristics is that it is composed of a hierarchy of sub-systems
i.e. the parts forming the major system and so on.
• A system consists of interacting elements. It is set of inter-related and inter-dependent parts
arranged in a manner that produces a unified whole.
• The various sub-systems should be studied in their inter-relatio9nships rather, than in
isolation from each other.
• An organizational system has a boundary that determines which parts are internal and which
are external.
• A system does not exist in a vacuum. It receives information, material and energy from other
systems as inputs. These inputs undergo a transformation process within a system and leave
the system as output to other systems.
• In the systems approach, attention is paid towards the overall effectiveness of the system
rather than the effectiveness of the sub-system. The interdependence of the sub-systems is
taken into account.
• In applying system concepts, organizations are taken into account and not only the objectives
and performances of different departments (sub-systems).
• Systems approach is useful because is aims at achieving the objectives and views organization
as an open system.
INFORMATION SYSTEM
 “Information system is organized combination of people,
hardware, software, communication networks, data resources,
policies and procedures that stores, retrieves, transforms and
disseminates information in an organization.”
 An information system is a way to work with information using
computers and other technology. It combines different parts like
computer programs, physical devices, and networks. Businesses
use information systems to collect important data. They use this
data to run their operations smoothly. Information systems also
help businesses talk to their customers. Using information
systems makes businesses work better than their competitors.
WHAT ARE THE COMPONENTS OF
INFORMATION SYSTEMS?
• Hardware: Hardware is the physical parts you can touch like computers,
disks, keyboards, and iPads. Hardware costs are lower now but using it can
hurt the environment. Storage is now available in the “cloud” which you
access through networks.
• Software: Software consists of programs that run on hardware. System
software like Windows helps hardware work. Application software like Excel
does specific tasks. Big companies buy special software for their needs. Some
software is free to use.
• Data consists of: Data is just facts and numbers. When put together
properly, data becomes useful information for businesses to make decisions.
• Telecommunications: Telecommunications connects computers and devices
to share information. This can use wires or wireless signals like radio waves.
Wires include fiber optics and cables. Wireless uses radio and microwave
signals.
TYPES OF INFORMATION SYSTEMS
 1. Operations Support Systems
 These systems support specific business operations. For example, all banks use
transaction processing systems to handle customer bank accounts and transactions.
Operations support systems allow a company to manage a core business process.
 2. Management Information Systems
 These systems integrate hardware and software to help an organization’s main
functions. They collect data from different systems. The data is then analyzed to
help managers make decisions for the business.
 3. Decision Support Systems
 These systems help organizations make informed decisions. They analyze rapidly
changing information that cannot be planned in advance. Decision support systems
can work automatically or with human operators. Using both humans and computers
together works best.
 4. Executive Information Systems
 These are management support systems specifically for senior executives. Executive
information systems help top managers make high-level decisions for the entire
organization.
• Input: First the system collects data as input. This data can come from the
typing, voice commands, touch screens, and sensors. The input data can be
structured (organized) and unstructured (disorganized).
• Processing: Since the input data is raw the computers processor (CPU) has
to organize it into the structured format. It does this through steps like the
sorting, grouping, searching, analyzing, and making the reports.
• Storage: Next the organized data is stored temporarily or permanently. It
gets stored in databases, hard drives, or solid-state drives.
• Output: The stored data is then analyzed and presented in a useful way like
reports, dashboards, or data visualizations.
• Feedback: Finally the system gets feedback from users on their experience.
This helps measure how well the system is working.
 HOW TO MANAGE INFORMATION SYSTEMS?
 1. Set Policies and Procedures
 Companies need to make clear rules on how to properly use and share data and information systems.
Managers should assign specific duties to team members to monitor the systems. They should also hire
people to audit (officially review) the processes.
 2. Conduct Regular Audits
 Check who is accessing systems and data trails (paths). Review how efficient the information systems
are performing. Hire internal and external auditors to inspect system documentation and any changes
made.
 3. Operations Management
 Information systems store a lot of private data. Companies must control data operations carefully. This
includes documenting procedures, limiting who can access data servers, and managing data archives
properly.
 4. Physical Protection
 It’s not just software – the physical computer hardware and data centers need protection too. Have
controls for temperature, power supply, and preventing service disruptions in the rooms housing the
systems.
 5. Identity Verification
 Data security is very challenging. Use secure coding practices, firewalls, and identity verification like
fingerprints, voice, or facial recognition to allow only approved people to access systems.
ROLE OF INFORMATION IN DECISION MAKING
 Decision making is an integral part of the functioning of any organization. To facilitate decision
making in this ever-competitive world it is imperative that managers have the right information
at the right time to bridge the gap between need and expectation. To facilitate better flow of
information adequate Management Information Systems (MIS) is the need of the hour. Thus it is
important to have an understanding of the MIS followed in an organization by all levels of
management in order to take effective decisions.
MIS provides accurate and timely information necessary to facilitate the decision-making
process and enable the organizations planning, control and operational functions to be carried
out effectively. MIS is a rapidly evolving IT based system that continuously create information
from raw data collected from various sources and compiles individualized reports of various
kinds which helps different levels of management in informed strategic decision making. MIS is
oriented with rapidly evolving technology along with Information and Communication
Technology (ICT) . ICT plays an important role for storage, retrieval and transmission of message
and become an essential component in the process of decision making in the organization to
assist managers at all levels and operational, tactical, and strategic processes more efficient
and effective.
 EDP :Electronic Data Processing (EDP) refers to the input,
processing and output of information. EDP is often called
Information Services or Systems (IS) or Management
Information Services (MIS) :- The information processed is
used and evaluated during an audit.

There are three kinds of audits:
Internal audit
External audit
IRS audit
 Elements of Electronic Data Processing
 Hardware, Software, procedure, personnel is the basic elements of electronic
data processing. In the hardware section, scanners, barcode scanners, cash
registers, personal computers, medical device, servers, video and audio
equipment are the elements of electronic data processing. In the software
section, accounting software, data entry, scheduling software, analytics, and
software are the elements of electronic data processing. In the procedure
section, sorting, analysis, reporting, conversion, data collection, aggregation
be the elements of EDP.
 SUB-SYSTEMS OF AN INFORMATION SYSTEM:
EDP/MIS/DSS.
 EPD can be described as the processing of data using electronic means such as
computers, calculators, servers and other similar electronic data processing equipment. A
computer is the best example of an EDP system. Use of a data processing system ensures
accurate and rapid data processing. Electronic data processing equipment can have an
inbuilt software or procedure to.
 The most common way of data processing is the machine learning technique called
classification. It can be used for identifying issues in your data, finding patterns, and
predicting outcomes. EDPs are computerized data processing systems that automate the
collection, storage, manipulation, and retrieval of data. Text mining involves the process of
categorizing, representing, and analysing huge amounts of text in order to derive useful
information. The benefits of electronic data processing are numerous. Electronic data
processing helps to reduce the development and maintenance cost of most business
operations.
 Methods of Electronic Data Processing:
• Time-sharing: In this processing method, many nodes connected to a CPU accessed
central computer. A multi-user processing system controls the time allocation to each
user. Each user can allocate the time slice in a sequence of the Central Processing Unit.
The user should complete the task during the assigned time slice. If the user cannot
finish the task, then the user can complete the task during another allocated time slice.
• Real-time processing: It Providing accurate and up-to-date information is the primary
aim of real-time processing. It is possible when the computer processes the incoming
data. It will give the immediate response to what may happen. It would affect the
upcoming events. Making a reservation for train and airline seats are the best example
for real-time processing.
• Online processing: In this processing method, the data is processed instantly. A
communication link helps to connect the computer to the data input unit directly. The
data input may include a network terminal or online input device. Online processing is
mostly used for information research and recording.
• Multiprocessing: Multiprocessing is processing of more than one task that uses the
different processors at the same time of the same computer. It is possible in network
servers and mainframes. In this process, a computer may consist of more than one
independent CPU. This makes data processing much faster.
• .
• Multitasking: It is an essential feature of data processing. Working with different
processors at the same time is called multitasking. In this process, the various tasks
share the same processing resource. The operating systems in the multitasking process
are time-sharing systems.
• Interactive processing: This method includes three types of functions. The following
are the types of function:
• Peak detection
• Integration
• Quantitation
• Batch processing: Batch processing is a method of the process the organized data into
divided groups. In this method, the processing data can be divided as a group over a
required time period. The batch processing method allows the computer to perform
different priorities for an interaction. This method is very unique and useful to process.
• Distributed processing: This method is usually used for remote workstations, since the
remote workstations are connected to a big workstation. The customers get the better
services from this process. In this process, the firms can distribute the use of
geographical computers. The best example for this distributed processing method is
ATMs. ATMs are connected to the banking system
 MANAGEMENT INFORMATION SYSTEMS (MIS):
 Management information systems are designed for providing information to the key
functionaries in an organization. These systems make use of the already processed of the
already processed transaction data which is outputted from TPS and generate
information reports after processing data. The output of an MIS takes the form of
summary reports and exception reports. A summary report accumulates data from
several transactions and presents the results in condensed form. For example a bank
manager may get a summary report listing the total amount of deposits and withdrawals
made the previous day. An exception report outlines any deviations from expected
output. Its main purpose is to draw the attention of middle managers to any significant
differences between actual performance and expected performance.
Decision Support System (DSS):
Decision support systems (DSS) are interactive software-
based systems intended to help managers in decision-making
by accessing large volumes of information generated from
various related information systems involved in
organizational business processes, such as office automation
system, transaction processing system, etc.
DSS uses the summary information, exceptions, patterns, and
trends using the analytical models. A decision support system
helps in decision-making but does not necessarily give a
decision itself. The decision makers compile useful
information from raw data, documents, personal knowledge,
and/or business models to identify and solve problems and
make decisions.
 Components of a DSS

•Database Management System (DBMS)− To solve a problem the

necessary data may come from internal or external database. In an
organization, internal data are generated by a system such as TPS and
MIS. External data come from a variety of sources such as newspapers,
online data services, databases (financial, marketing, human resources).

•Model Management System − It stores and accesses models that

managers use to make decisions. Such models are used for designing
manufacturing facility, analyzing the financial health of an organization,
forecasting demand of a product or service, etc.

•Support Tools − Support tools like online help; pulls down menus,
user interfaces, graphical analysis, error correction mechanism,
facilitates the user interactions with the system.
 Types of DSS:
Following are some typical DSSs −
•Status Inquiry System− It helps in taking operational, management level,
or middle level management decisions, for example daily schedules of jobs
to machines or machines to operators.
•Data Analysis System− It needs comparative analysis and makes use of
formula or an algorithm, for example cash flow analysis, inventory analysis
etc.
•Information Analysis System− In this system data is analyzed and the
information report is generated. For example, sales analysis, accounts
receivable systems, market analysis etc.
•Accounting System− It keeps track of accounting and finance related
information, for example, final account, accounts receivables, accounts
payables, etc. that keep track of the major aspects of the business.
•Model Based System− Simulation models or optimization models used for
decision-making are used infrequently and creates general guidelines for
operation or management.