introduction to management information systems (MIS)

Management Information Systems
1

• Management +Information + System =
Management Information System

MANAGEMENT
• “set of activities directed at an organization's
resources with the aim of achieving organization
goals in an effective and efficient manner.”

INFOTMATION
• Data placed in a meaningful and useful context for
an end user
• A processed data.

SYSTEM
• A group of interrelated or interacting elements
forming a unified whole.
• A set of interrelated components , with a clearly
defined boundary, working together to achieve a
common set of objectives by accepting inputs and
producing output in an organized transformation
process.

Introduction
• Management information system is an information system typically based on
computer that is used within the organization.
• Management information system (MIS) is a computer based information
system which records, summarizes analysis and provides information
required for all levels of management in decision making task.
• MIS includes hardware, software, people, communication system-telephone,
internet, and data as its main components.
• In a broader sense management information system (MIS) is the
combination of man and machine- specially computer, in processing
information required for various managers in organization for decision
making purpose.
• It collects data about routine task of organization and processes them in to
information and latter this information is distributed to managers who need
in decision making purpose.
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Role of MIS in Management:
• The role of the MIS in an organization 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 MIS plays exactly the same role in the organization. The
system ensures that an appropriate data is collected from the
various sources, processed, and disseminated 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 and the top
management.
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Role of MIS in Management cont…
 The MIS helps the clerical personnel in the transaction processing and
answers their queries on the data pertaining to the transaction, the status
of a particular record and references on a variety of documents.
 The MIS helps the middle management in short them planning, target
setting and controlling the business functions. It is supported by the use
of the management tools of planning and control.
 The MIS plays the role of information generation, communication,
problem identification and helps in the process of decision making.
 The MIS, therefore, plays a vital role in the management, administration
and operations of an organization.
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Information system
 Information systems are a foundation for conducting business today.
In many industries and service organization the ability to achieve
strategic business goals are difficult without extensive use of
information technology.
 Information system can any organized combination of people,
hardware, software, communication network, data resources, and
policies and procedures that retrieves, stores, transforms, and
disseminates information in an organization.
 Information system can be technically defined as a set of interrelated
components that collects processes, stores, and distributes information
to support decision making and control in an organization.
 In addition to supporting decision making, coordinating, and control,
information system may also help managers and workers analyze
problems, visualize complex subjects and create new products.
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Information system cont….
 Information system contains information about people, places, things, and
events within the organization or in the environment surrounding it.
 By information, we mean data that have been shaped in to a form that is
meaningful and useful to human beings. Data in contrast, are streams of raw
facts representing events occurring in an organization or physical
environment before they have been arranged and organized into a form
that people can understand and use.
 For example- in college lectures maintain attendance register for students
in each class. They simply record number of attendees in collage. These
registers are totaled and analyzed to provide meaningful information such
as total number of students attending classes regularly, name of students
attending class regularly, name student who has most absenteeism etc.
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Information system cont….
 Analyzing these results or information system product now
collage administration needs to make decision, control, analyze
problems and develop new strategies.
 Transforming or changing of data in to information requires
Input-Processing-Output function.
 Input captures or collects raw data from within the
organization or from its external environment.
 Processing converts this raw input in to a meaningful form.
 Output transforms the processed information to the people
who will use it or to the activities for which it will be used.
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Data and Information
Data
 Data is the plural form of datum. Data can be any statement, numbers, pictures or any
physical evidence about object or happenings. It represents to something that exists in
real world.
 Data are the unmanaged, unarranged, unsystematic raw materials that are to be
processed/converted later in to information.
 Raw facts such as an employee’s name and number of hours worked in a week,
inventory part numbers or sales orders.
Information
 A collection of facts organized in such a way that they have additional value beyond the
value of the facts themselves.
 Information is the processed, arranged and managed data that gives some meaning
about the happenings or object. In word information are the data that are placed in
some meaningful form. These processed data aka. Information are the raw materials
that manger consult or use while making decisions and planning.

Data and Information
Data
Information
Rs.35,000 12 Units
Rs.12,000 Piyush
Western Region
Rs.100,000 100
Units 35 Units
Data
Processing
Salesperson: Piyush
Sales Territory:
Western Region
Current Sales: 147
Units = Rs.147,000
Input
(DATA)
Processing
(Manipulation
of data)
Output
(Information)

Functions of information system
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I. Achieving operational excellence:
• Every business wants to improve the efficiency of their operations in
order to achieve higher profitability. Information system and information
technologies are some of the tools available to managers for achieving
higher levels of efficiency and productivity in business operations,
especially when business practices and management behavior are
changing.
I. Improve decision making
• The changing context and situation of business environment have made
decision making task difficult for managers. Managers need timely,
accurate information at right time for making right decisions. Information
system as and assisting tool for manager helps them in providing right
and accurate information for making right decisions.
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I. Customer and supplier intimacy
• Information system collects various information about customers and
suppliers. When sufficient information about customers and suppliers are
collected, this helps management to behave in a right way with customers
and suppliers. This helps management maintain a profitable relationship
with customers and suppliers, which helps in increasing revenues and
profits.
I. Competitive advantage:
• Performing organizational activities in ways that give a company the
capability to outmatch rivals is a source of competitive advantage.
Competitive advantage in an organization arises from its performing
capability. In modern scenario an organization increases its competitive
competences when it uses information system and information
technology.
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I. Survival:
• Business organizations also invest huge amount in information
system and information technology because they need to survive
competition. Sometimes necessities of information system arises
from the driven by industry level change. For example most of the
banks in Nepal are using ATMs. It is necessities for new comers to
install ATMs within their banks to survive in competition.
I. New product & service and business model changes:
• Information systems are major tools for the firms to create new
product, services as well as to develop new business models.
• A business model describes how a company produces, developers
and sells product or services to its customers to create enough
revenues and profits.
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Components of information
system
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Components of information system
• An information system accepts data as input and processes them in
to information products as output.
• An information system heavily depends on people, hardware,
software, communication networks and data resources to
perform input, processing, output, storage, and control activities
that convert data resources in to information products: which are
known as the components of information system
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People resources:
• People resources are essential components of information system because people are the major user of
information system as well as they are the creator of information system. Without people no information system
are developed and created. People resources in information system fall under two categories.
 End users.
• End users in information system are the real user of information system who depends upon the
information products of it. They can be customers, salespersons, engineers, managers found in all levels of
organization.
 Information system specialist.
• Information system specialists are the people who develop and operate information system. They
include system analyst, software developers, system operators and other managerial and technical
personnel. Information system analyst design information systems based on the information requirements
of end users. Software developers develop computer programs based on the requirements of organization
as specified by system analyst. System operators and technical personnel help monitor and operate
information system.
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Hardware resources.
• A hardware resource includes all physical devices and materials
used in information processing task. It includes machines like
computers and other components and data media.
Computer system
• A computer system includes central processing units- aka
processor, that processes the data according to the
instructions
 Computer peripheral
• Computer peripherals include various inputs, outputs and
communication devices and media devices, like keyboard,
mouse, stylus, flop disk, storage devices etc., to store the data
and results.
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Software resources.
• Computer software includes all sets of information processing instructions. It
includes all computer programs and procedures the people need to process data.
• Software resources can be classified in to following types.
System software.
• Systems software controls the operations of computer hardware
and supports the problem-solving capabilities of application
programs. Types of system software include operating systems,
utility programs.
Application Software
• The primary function of application software is to apply the
power of the computer to give people, workgroups, and the entire
enterprise the ability to solve problems and perform specific tasks.
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Data resources.
• Data are more than the raw material of information system.
Data constitute valuable organizational resources. Data are the
life blood of today’s organizations, and the effective and efficient
management of data is considered as integral part of
organizational strategy.
• Data in organization are collected from various transactions
that occur in daily basis and stored, processed and analyzed using
sophisticated software applications that can reveal complex
relationships among sales, customers, competitors, and markets.
• Data can take many forms including alphanumeric data, text
data, image data, audio data, video data etc.
• The data resources of information systems are organized,
stored and accessed by a variety of data resources management
techniques like database management system, knowledge
management system.
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Network resources.
• Network resources include telecommunication technologies and
networks like internet, intranet and extranets essential for operation of
computer based information system.
• Network resources include;
Communication media.
• Communications media consist of all hardware required for
inter connecting various computers. Twisted pair wire, optical
fiber cable (OFC), cell phones, telephones etc are examples of
communication media.
Network infrastructure.
• This includes various software, hardware, and data technologies
needed to support operation of communication network.
Communication processors- modems, internetwork processor, and
communication control software- network operating software,
internet browsers etc are examples of network infrastructure.
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Data andinformation
VALUE OF INFORMATION
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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.
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 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 multi attribute 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.
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Characteristics of valuable information
• Subjectivity: The value and usefulness of information are
highly subjective, because what is information for one person
may not be for another. For example even small changes in the
price of a stock can be meaningful to a stockbroker, because
these changes may influence buying and selling decisions.
However, to a layperson, a stock price may be just a number,
with little or no meaning.
• Relevance: Information is good only if it is relevant- that is,
applicable and meaningful to the decision-maker. For example,
suppose a plant manager is trying to determine why a certain
machine breaks down frequently. For that plan manager, the
number of units that the machine has produced in the last 5 years
is probably not relevant to the problem at hand.
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• Accuracy/consistency: Accuracy is measured by comparing the data to actual events.
Information must be free of errors, because erroneous information can result in poor
decisions and erode the confidence of users. Note, however that accuracy is a relative
concept; its meaning varies from context to context. For example, great precision is not
required in predicting the number of customers at a restaurant, but is critical for a space
mission.
• Correct information format: Information must be in the right format to be useful to the
decision-maker. For example, if a manager wants to know the total a sale of product x last
year, the most appropriate format is an annual summary of sales figure for the product. The
format should be such that it can be applied directly to the problem at hand without further
processing.
• Completeness: Information is said to be complete if the decision-maker can satisfactorily
solve the problem at hand using that information. Although completeness of information is
highly describe, often-complete information is not available. Managers are compelled to
make decisions even when their information is incomplete: this is practically true for
problems that require intuition and judgment. How ever, if most, though not all, of the
essential information necessary to make a decision is available, the decision-maker may
view the information as essentially complete. 30

• Accessibility: Information is useless if it is not readily accessible to decision
makers, in the desired format, when it is needed. Advances technology has made
information more accessible today then ever before; however there is also a
downside to this development. Sometimes managers feel overwhelmed by the large
volumes of information that are readily available to them. Also, if information is
easily accessible, it may fall into the wrong hands: this can seriously jeopardize the
company. Hence there should be a balance between accessibility and security; we
discuss some methods for achieving information security in an organization.
• Timeliness: Timeliness refers to the currency of the information presented to the
users. Information must be delivered at the right time and the right place to the right
person. Currency of data or information is the time gap between the occurrences 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. Many organizations produce large volumes of reports without regards to
when the information is needed; this greatly diminishes the value of their reports.
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introduction to management information systems (MIS)

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