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Management Information SystemLesson 1
SYSTEM
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System• A system is made up of interdependent components that form
a whole• Each component of the system serves a specific purpose but
at the same time interacts and links with other components to pursue a common goal
• A business enterprise is an example of a system• Each department (for example, human resources, finance) has its
own function and objectives but all are aligned toward the overall mission of the organization
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INFORMATION SYSTEMS (IS)
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Information Systems (IS)• Refers to a set of data, computers, software and management
methodologies required to support the day-to-day "internal" operation of a company.
• The Information System is unique to each company because the operational requirements are unique.
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History of Information System• History of IS equals to evolution of computer• ENIAC by Mauchly & Eckert (1946)• UNIVAC I by Rand (1951 & 1954)• System/360 by IBM (60s)• Minicomputer (70s)• Microcomputer by IBM (early 80s)• Now? …
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Computation and Communication• Computation• Speed of processor• Storage
• Communication• Transfer speed• Range
• Manifested into Information Communication Technology
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Information System Users• Management level:• Strategic planning• Management control• Operational control
• Activity:• Problem solving• Decision making
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Management Level on Info Source
Strategic planning level
Management control level
Operational control level Internal
Environmental
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Management Level on Info Form
Strategic planning level
Management control level
Operational control level Detail
Summary
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MANAGEMENT INFORMATION SYSTEM
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Information Management (IM)• The collection and management of information from one or
more sources and the distribution of that information to one or more audiences.• This sometimes involves those who have a stake in, or a right to
that information.• Management means the organization of and control over the
structure, processing and delivery of information.• Information management entails organizing, retrieving,
acquiring, securing and maintaining information.
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Management Information• Management information refers to information that is timely,
accurate and relevant in relation to a particular situation• Management information helps managers decide what to do
in a particular situation• For example, the actual age of the accounts receivable of a
company may be 45 days whereas company policy is to keep the age to a maximum of 30 days• This information calls for action to reduce the age of the
accounts receivable
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Management Information System
• A management information system is any system that collects, stores, analyzes, gathers, manages and manipulates data that is relevant to business and operations.
• An MIS can be defined as a combination of people, computers and procedures for collecting and organizing information to facilitate decision making.• In any organization a reasonable amount of time and effort is
devoted to data collection, documenting, processing and communication.
• Every individual looks for information that is relevant to her duties.
• Thus, information is people oriented and varies with the nature of people's work in the organization.
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Management Information System
• Management Information Systems (MIS) are operational methods utilized to make the management of products, processes and personnel easier and more effective.• MIS can be supported by technology and software solutions that
help streamline and automate management functions to further enhance overall management abilities and functions.
• As new technological advances are made, MIS protocols will adapt as well.
• A management information system (MIS) provides information that is needed to manage organizations efficiently and effectively.• Management information systems are not only computer
systems • These systems encompass three primary components:
technology, people (individuals, groups, or organizations), and data/information for decision making.
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Management Information System
• MIS is often considered a subset of Information System.• This subset is most relevant when securing and delivering
information required to help corporate managers make operational, strategic and proactive decisions.
• In many cases, this information comes from outside of the company or from "external" sources such as data from suppliers or real-time sales data from retail outlets.
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History of MIS• The term Management Information System (MIS) first came
about when computers started to permeate daily business, forcing business managers and operators to rely heavily on computers for general business operations.
• Management information systems first appeared in business environments in the 1960s with the advent of mainframe computers.
• Mainframe computers brought a computing ability to businesses that had yet to have many management processes automated.
• Since then, technology has grown at a rapid pace; now, computers and computing abilities are found at all levels of business.
• This availability helps support the premise behind MIS.
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Types of Management Information Systems• Transaction processing systems• These systems process a large volume of routine, recurring
transactions. Example: a bank's system for recording deposits and payments
• Operations information systems• These systems gather comprehensive data, organize it and
summarize it in a form that is useful for managers. Example: an inventory management system
• Decision support systems• These systems help mangers with the necessary information to make
intelligent decisions. They have three fundamental components: database of relevant information, decision making models and a user friendly interface
• Expert systems• Are meant to mimic humans in making decisions in a specific field.
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Areas of MIS• Database Development And Management• CRM (Customer Relationship Management)• Data Collection and Storage• Accounting Systems
• As needed, a user can gain a macro view of the business' management system by viewing these information management systems as one comprehensive system through an MIS.
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The Difference Between Information System and Management Information System• Information System refers to the information system required to run
the day-to-day internal operations of a company. Management Information System refers to the information system responsible for securing both internal and external data that management can use to make operational decisions.• Such decisions may lead to the design of a new product or service,
which is different from the IS required to run the day-to-day internal operations.
• Management information systems are distinct from other information systems in that they are designed to be used to analyze and facilitate strategic and operational activities in the organization.• Academically, the term is commonly used to refer to the study of
how individuals, groups, and organizations evaluate, design, implement, manage, and utilize systems to generate information to improve efficiency and effectiveness of decision making, including systems termed decision support systems, expert systems, and executive information systems.
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Advantages of MIS• Management information systems have changed the
dynamics of running businesses efficiently.• Decentralization is one of the biggest advantages; it allows
monitoring of operations at low levels and frees up resources for departmental managers to devote time to strategic activities.
• Coordination of specialized projects and activities is much better and decision makers in the organization are aware of issues and problems in all departments.
• Another advantage of MIS is that it minimizes information overload, which can be quite common with conventional businesses in the modern era.
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Advantages of MIS: Better Planning and Control• MIS has to be designed and managed in such way that it
aggregates information, monitors the company's activities and operations and enhances communication and collaboration among employees.
• This ensures better planning for all activities and better ways to measure performance, manage resources and facilitate compliance with industry and government regulations.
• Control helps in forecasting, preparing accurate budgets and providing the tools and vital information to employees, top management and business partners.
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Advantages of MIS: Aid Decision Making• The purpose of MIS is to generate synthesized and processed
information from computerized/automated and certain manual systems.
• Information distribution to all levels of corporate managers, professionals and key executives becomes quite seamless with streamlined MIS.
• Managers are able to make quick, timely and informed decisions.
• Top management and board members can take strategic decisions, plan future growth and business expansion activities based on the data and information generated by MIS.
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Disadvantages of MIS• Depending on organization deployment, usage and
extraneous factors, some disadvantages related to Management Information Systems can come to the fore.
• Allocation of budgets for MIS upgrades, modifications and other revisions can be quite tricky at times.
• If budgets are not allocated uniformly or as per immediate requirements, key functionalities might get effected and benefits might not be realized consistently.
• Integration issues with legacy systems can affect the quality of output and vital business intelligence reports.
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Benefits of MIS• Management information systems benefit business operations as
specific company information may affect multiple departments.• In general, information is provided and utilized by every department
of a business.• Via MIS, these various departments are individually and
collaboratively able to compile and analyze this data throughout the company, making MIS a major tool in company management.
• Additionally, MIS allows for information from various departments to be compared to each other.• For example, the human resource department utilizes and examines
information within the production department, such as hours worked per production line, production-related accidents and pay rates for workers on the production line.
• This information can then be used to determine company policies or influence future business actions.
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Effects• The primary effect of management information systems has
been the organization of the various systems and technologies used in business operations.
• Technology has changed business in every way imaginable; processes and procedures that were once completely manual are now affected by technology in one way or another.
• IT departments and technology are relied upon heavily to run all types and sizes of business; management information systems offer a way to connect technological components and keep them organized and working together.
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Significance of MIS• Management information systems allow managers and business
operators to automate business processes, which allows for tighter control and more efficient operations.• For example, without accounting and human resource software and
applications, a business would need to manually calculate payroll, withheld taxes, quarterly tax payments and insurance premiums on a weekly basis per employee.
• MIS makes weekly payroll into an automated process that networks with other applications.
• For weekly payroll, once time sheets or employee work hours are entered, the applications automatically determine each employee's pay, write a check or make an automatic deposit, allot funds for taxes and perform various other accounting and human resource functions.
• The significance of MIS lies in the automation and interrelation of the multiple processes a business incurs on a daily basis, enabling the business to run more efficiently and effectively.
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