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Unit1 Understanding MIS
Structure
1.1 Introduction to Management information systems
1.1.1 Brief about MIS origin
1.1.2 Impact of MIS
1.1.3 Transformation stage
1.2 Role and importance
1.2.1 MIS characteristics
1.2.2 Function of MIS
1.2.3 Necessity of MIS
1.2.4 Role of IS in Business
1.3 Types of MIS
1.3.1 Classification
1.3.2 Relationships
1.4 Managers view of information systems
1.4.1 Types of IS
1.4.2 View of structure of MIS
1.5 Types of computers used by organization in setting up MIS
1.5.1 Desktop personal computer
1.5.2 Notebook computers
1.5.3 Personal digital assistant
1.6 Hardware support for MIS
1.6.1 Advantages of a personal computer
1.6.2 Classification of computers
1.7 Summary
TQs
Answer to SAQs and TQs
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1.1 Introduction to Management information systems
It is well known fact that organizations grow in level and also in their complexity of functioning.
Tremendous amount of information is generated ever year, most of it goes into the archives without
any reference to it the future. Also information which is needed by the organization for different
applications is not possible to be made available at the right time at the right level. MIS is considered
as one such method of generating information which is used by management of organization for
decision making , control of activities, operations etc.
Learning Objective
After going through this unit, student will be able to understand
i) the basics of MIS.
ii) the role and significance of MIS in business, types and its classification
iii) the impact of MIS on business
iv) the phases of development in MIS
v) managers view of the information system and
vi) the hardware support needed
1.1.1 Brief about MIS origin
During the period of preindustrial revolution most of the data processing was done manually. It was
after the industrial revolution that the computers slowly started replacing manual labour.
The modern digital computer was basically designed to handle scientific calculations. During the
period 1940 to 1960 computers were commercially used for census and payroll work. This involved
large amount of data and its processing. Since then the commercial application exceeded the
scientific applications for which the computer were mainly intended for.
MIS is an Information system which helps in providing the management of an organization with
information which is used by management for decision making.
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1.1.2 Impact of MIS
MIS has a major impact on the functions of any organization. The organization derives benefits from
the systems in the following form:
a) speedy access to information,
b) interpretation of data,
c) quick decisions,
d) speedy actions,
e) increased productivity and thereby increase in the profit
f) reduced transaction cost
The usage of Electronic media for data storage and processing the data is an integral part of MIS.
The texts and images in electronic forms are effective in communicating ideas from source to
destination. It is technology driven in the sense it revolves around wireless electronic gadgets,
internet, money cards – credits cards , debit cards, id cards, atm cards etc.
MIS is very significant in modern day education system where we come across usage of LCDs,
Smart boards, internet etc in class rooms. In the tourism MIS has led to radical changes in booking
system, tourist information system, hotel facilities, accommodation facilities, transportation modes
available, images of the facilities that could be provided etc.
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Transportation
Teaching
Planning
methodology
Better
Tourists Office
Information automation
Better
Banking
Increased
systems
Production
Impact of MIS in different areas
1.1.3 Transformation stage manual systems to automated systems
The manual system which was prevalent in the organizations before industrial revolution was slowly
transformed into digital form by means of computer and related electronic instruments. A
transformation had to necessarily go through the following stages
a) appraisal of the procedures
b) types of documents
c) storage systems
d) formulations and coding
e) verification and validation
f) review
g) documentation
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Self Assessment Questions1 : True or False
1. MIS has a major impact on the functions of any organization.
2. The usage of Electronic media for data storage and processing the data is an peripheral part
of MIS.
1.2 Role and importance
1.2.1 MIS characteristics
· In any organization managers will have varieties of tasks to manage. MIS is mainly designed
to take care of the needs of the managers in the organization.
· Organizations will have different departments like marketing, production, sales, inventory,
maintenance etc. Each of these departments function individually and also in relationship with
other departments. Information is available in abundance. MIS aids in integrating the
information generated by various departments of the organization.
· MIS helps in identifying a proper mechanism of storage of data. The data is maintained in
such a way that the unnecessary duplication of data is avoided.
· MIS also helps in establishing mechanism to eliminate redundancies in data.
· MIS as a system can be broken down into sub systems. Each such sub system may be
programmed. This results in easy access of data, accuracy of data and information. It helps in
maintaining the consistency of data.
1.2.2 Function of MIS
The main function of MIS is to help the managers and the executives in the organization in decision
making.
· Large quantities of data like customers information, competitors information, personnel
records, sales data, accounting data etc is collected from internal sources like the company
records and external sources like annual reports and publications.
· The collected data is organized in the form of a database.
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· The data from the database is processed and analysed by using different tools and
techniques.
· The results of the analysis is properly presented to the managers to help them in decision
making.
DECISION MAKING PROCESS
BY
MANAGER
Data Analysis
Process Data & Data Analysis
DATA BASE
MIS Function
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1.2.3 Necessity of MIS
Managers play a key role in any organization. They are responsible for taking decisions appropriate
to the need of the market. Information systems has become the main tool used by managers in
decision making. Managers perceive information as the driving force to achieve success in any
business. Hence there is a need for MIS.
1.2.4 Roles of IS in Business
(Source : Management Information Systems – James A O’Brien , George M Marakas seventh
edition Tata McGrawHill)
There are three fundamental reasons for all business applications of information technology. They
are found in the three vital roles that information systems can perform for a business enterprise.
a) Support of its business processes and operations – As a consumer, you regularly encounter
information systems that support the business process and most retail stores where you shop. For
example, most retail stores now use computer based information systems to help them record
customer purchases, keep tracak of inventory , pay employees, buy new merchandise and evaluate
sales trends. Store operations would grind to a halt without the support of such information systems.
b) Support of decision making by its employees and managers – Information systems also help
store managers and other business professionals make better decisions. For example, decisions on
what lines of merchandise need to be added or discontinued, or on what kind of investment they
require, are typically made after an analysis provided by computerbased information systems. This
not only supports the grain an advantage over other retailers in the competition for customers.
c) Support of its strategies for competitive advantageGaining a strategic advantage over
competitors requires innovative application of information technologies. For example, store
management might make a decision to install touchscreen kiosks in all of their stores, with links to
their ecommerce website for online shopping. This might attract new customers and build customer
loyalty because of strategic information systems can help provide products and services that give a
business a comparative advantage over its competitors.
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The major roles of the business applications of a Management Information System may be
represented in the pyramid form as shown below. The apex of the pyramid represent the Top Level
Management and the base of the pyramid represent the Bottom Level Management. The
intermediate layer is the Middle Level Management.
Support Strategies
for Competitive
Advantage
Support Business
Decision Making
Support Business
Processes and operations
Major Roles Of The Business Applications Of IS
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The business applications of information systems have expanded significantly over the years.
The following figure summarizes these changes.
Electronic Business and Commerce : 1990s2000s
Internet based ebusiness and ecommerce systems
Web enabled enterprise and global ebusiness operations and electronic
commerce on the internet, intranets, extranets, and other networks
The expanding participation of End Users and Managers in Is
The expanding Roles of IS in Business and Management
Strategic and End User Support: 1980s1990s
End user computing systems
Direct computing support for end user productivity and work group
collaboration
Executive information systems
Critical Information for top management
Expert Systems
Knowledge based expert advice for end users
Strategic information systems
Strategic product and services for competitive advantage
Decision Support: 1970s1980s
Decision support systems
Interactive ad hoc support of the managerial decisionmaking process
Management Reporting : 1960s1970s
Management information systems
Management reports of prespecified information to support decision
making
Data Processing: 1950s1960s
Electronic data processing systems
Transaction processing, record keeping and traditional accounting
applications
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Self Assessment Questions – 2 : True or False
1. MIS is mainly designed to take care of the needs of the managers in the organization.
2. MIS helps in identifying a proper mechanism of storage of data.
1.3 Types of MIS
1.3.1 Classification:
MIS is classified into various types. The classification depends on the following aspects –
a) Functionality
b) Utility
c) Area of application
d) Processing type
e) Frequency of usage
Various management activities like the one which deals with scheduling, planning, resource
allocation, product design, processes, competitive strategy are the functional classification of MIS.
Some of the processes like artificial intelligence, generating management related information,
providing aid in decision making, necessary support systems, executive information system are the
utility classification of MIS.
Depending upon the area where MIS could be used MIS is classified as Banking IS, Insurance IS,
Production IS, Data warehouse IS, Public IS etc.
Depending upon the type of management service in processing a data to generate information, MIS
is classified into various processing types like – Online transactions, Batch processing, distributed
processing, multiprocessing etc.
A MIS system is a system in which there is a constant need for review of the system. A mechanism
can be built in the system to look into its performance and the outcome of such performed tasks may
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be assessed. This may be done periodically at fixed interval of time. Such mechanisms are
categorized under MIS classification of frequency.
1.3.2 Relationships
Though different types of IS exists in any organization, they are related to each other directly or
indirectly. The information generated in one department may be used by another department to
generate further information to be used by other departments and so on. Thus there exists a
relationships between various types of IS being used in any organization.
Self Assessment Questions3: Fill in the blanks
1. The classification of MIS depends upon the aspects _____ , _____, area of application,
processing type and frequency of usage.
2. A MIS system is a system in which there is a constant need for _____ of the system.
1.4 Manager's view of information systems
1.4.1 Types of IS
There are six major types of information systems.
· Transaction processing systems (TPS) A transaction processing system (TPS) helps in
conducting the daily routine activities like sales order entry, airline reservations, payroll etc.
· Office systems – Some of the tasks involved in the administration of an office are storage of data,
manipulation of data, documentation, communication etc. To increase the efficiency of these
activities various word processors, image processors, telecommunications systems, networks are
adopted. These constitutes the offices systems.
· Knowledge Based Systems (KBS) – KBS is a system that represents knowledge. Abundant
information is available today. These information are representatives of various facts and figures.
These constitute knowledge base. The system adopted is capable of quick data acquisition and
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interpretation of the data which is necessary in decision making. This system is used as an expert
to give expert advice on various subject matters and at time as a consultant. Such a system is
known as knowledge based system.
· Decisionsupport system (DSS) Managers are usually faced with challenges which are
unstructured. The problems they face are normally under situations involving uncertainties and
risks. Decision making becomes very difficult under such situations. A system which provides
solutions to such problems is known as decision support system (DSS).
· Management Reporting Systems (MRS) Management reporting system (MRS) helps the
management in decisionmaking by providing them with reports and different statistical tools.
· Executive support systems Executive support systems helps the senior executives in the
organization in decision making through advanced graphics and communication.
1.4.2 View of Structure
Different kinds of information systems serve different levels in an organization. Each level of system
and its sub system is viewed differently depending upon the following levels of classification.
Operational–level systems help the managers in keeping track of the daily routine activities.
For example, recording daily sales and placing orders.
Knowledgelevel systems form the workstations and office systems in an organization which help in
including the latest technology in the working of the organization.
For example, preparing displays for advertisements.
Managementlevel systems help in administrative activities and decisionmaking of the managers.
For example, the monthly sales figures by territory.
Strategiclevel systems help the senior executives of the organization in addressing issues like
planning and decisionmaking.
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For example, predicting the profit trend for the next 5 years.
Self Assessment Questions4 : Fill in the blanks
1. ________ is a system that represents knowledge.
2. ________ helps the management in decisionmaking by providing them with reports and
different statistical tools.
1.5 Types of Computers used by organization in setting up MIS
Computers are electronic devices used for processing data. It helps is generating the desired
information output based on certain input data. The outputs are used for various decision making.
There are various types of computers that may be used by an organization for effectively
implementing MIS. Some of the types commonly used in business are desktop computer, notebook
computer, PDA etc.
1.5.1 Desktop Personal Computer – These are systems which are kept on top of desks in
various offices, residences, class rooms, departmental store, showrooms etc. Destop personal
computer are meant to be operated by a person sitting in front of the computer.
1.5.2 Notebook computers – These are smaller in size as compared to desk top computers.
The screen size is approximately 11”x8”. It is possible for a person to carry it in a bag. It is similar to
the size of a note book, hence the name notebook computer. It is operated sometime by placing it on
the lap of a person, hence it is also know as lap top computer. It is very convenient to use it for day to
day applications when mobile.
1.5.3 PDA – These are small hand held devices known as personal digital assistant. It is possible
to carry a PDA in pockets, hence is very convenient to use. It has simple applications like taking
notes, phone, calendar, camera, etc. One can even have internet access on a PDA thus bringing the
information of the entire world wide web on hand.
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Self Assessment Questions5 : True or False
1. PDA are systems which are kept on top of desks in various offices, residences, class
rooms, departmental store, showrooms etc.
2. It is possible to carry a notebook computer in pockets, hence is very convenient to use.
1.6 Hardware support for MIS
Generally hardware in the form of personal computers and peripherals like printers, fax machines,
copier, scanners etc are used in organization to support various MIS activities of the organization.
a) Speed – A PC can process data at a very high speed. It can process millions of instructions within
fraction of seconds.
b) Storage – A PC can store large quantity of data in a small space. It eliminates the need of storing
the conventional office flat files and box files which requires lots of space. The storage system in a
PC is such that the information can be transferred from place to another place in electronic form.
c) communication – A PC on the network can offer great support as a communicator in
communicating information in the forms of text and images. Today a PC with internet is used as a
powerful tool of communication for every business activity.
d) Accuracy – A PC is highly reliable in the sense that it could be used to perform calculations
continuously for hours with a great degree of accuracy. It is possible to obtain mathematical results
correct up to a great degree of accuracy.
e) Conferencing – A PC with internet offers facility of video conferencing world wide. Business
people across the globe travel a lot to meet their business partner, colleagues, customers etc to
discuss about business activities. By video conferencing inconvenience of traveling can be avoided.
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A block diagram of a computer may be represented as
Processor Output
Input Unit
Unit
Input unit is used to give input to the processor. Examples of input unit –Keyboard, scanner, mouse,
bar code reader etc.
A processor refers to unit which processes the input received the way it has been instructed. In a
computer the processor is the CPU – Central Processing Unit. It does all mathematical calculations,
logical tasks, storing details in the memory etc.
Output unit is used to give output s from the computer. Examples of output unit – Monitor, printer,
speakers etc.
1.6.2 Classification of computers : Computers are classified as follows –
a) Depending upon the processor used – eg: Intel PI, PII, PIII, PIV, AMD, Celerons etc.
b) Depending upon the purpose for which it is used a Computer may be a general purpose
computer or a specific purpose computer. General purpose computers are the ones used for general
tasks like business analysis, letter typing, generating reports for management decisions, scheduling
activities, preparing balance sheets, invoice etc, Specific purpose computers are custom build for
specific tasks like space research, weather forecasting, satellite sensing etc. Specific purpose
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computers are designed to perform tasks for which they are intended for and for no other
applications.
c) Depending upon the size : A computer may be classified based upon its size and voluminous
computing speed as micro computers, mini computers, main frames and super computers. Super
computer is the largest in size and also fastest in computing speed.
Self Assessment Questions6 : Fill in the blanks
1. A PC can ________ data at a very high speed.
2. A PC with ______ offers facility of video conferencing world wide.
3. A processor refers to unit which processes the______ received the way it has been instructed.
1.7 Summary
After going through this unit you would have learnt the fundamentals of MIS. The role and
significance of MIS in business and its classification is explained. Also students would understand
the impact of MIS on business and the various phases of a business. It is possible to understand the
various phases of development in MIS based on the type of system required in any organization. You
would also learn about the various types of computers used in MIS and the different types of input
and output devices.
Terminal Questions
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Answer to Self Assessment Questions (SAQ)
SAQ1 : 1True, 2False
SAQ2 : 1True, 2True
SAQ3 : 1 Functionality , Utility, 2Review
SAQ4 : 1 KBS, 2MRS
SAQ5 : 1False, 2False
SAQ6 : 1Process, 2Internet, 3Input
Answer to Terminal Questions
1. Refer 1.1.1 and 1.1.2
2. Refer 1.1.3
3. Refer 1.2.1
4. Refer 1.2.2
5. Refer 1.3.1
6. Refer 1.6
7. Refer 1.4
8. Refer 1.6
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