MANAGEMENT INFORMATION SYSTEM

INFORMATION AN IMPORTANT RESOURCE DATA Vs INFORMATION Data is a collection of facts, figures and statistics related to an object. Data can be processed to create useful information. The manipulated and processed form of data is called information. It is more meaningful than data. It is used for making decisions. Data is used as input for processing and information I output of this processing. FIVE MAIN RESOURCES IN ANY ORGANIZATION: Personnel Material Machines Money

------------------- PHYSICAL

Information --------------------- CONCEPTUAL

Today, Information is the driving force for any business.It goes without saying that all the managerial functions are performed through decision making for taking rational decisions, timely and reliable information is essential for proper function of any business. Inorder to survive and grow in todays' world of ever increasing complexities of business as well as management in every business organization, one must have a properly planned, analyzed, designed and maintained Information system so that it provides timely, reliable and useful infromation to enable the managment to take speedy and rational decisions.Thus, information and information processing are vital to organizational functioning and the term MIS well understood in this domain. The era of liberalization and globalization, in which the organizations are required to compete not locally but globally, has further enhanced the necessity for such a system. Computers and information technology have added yet another dimension in this direction. It is because of the above cited reasons that MIS nowadays, is considered to be of paramount importance, sometimes regarded as the nerve centre of an organization. Such systems assist decision makers in organizations by providing management information at various stages of decision making and thus greatly help the organizations to achieve the predetermined goals and objectives. On the other hand, MIS which is not adequately planned for, analyzed , designed , implemented or obsolete information, which may prove costly or even fatal for the organization. MIS is not new; only its computerization is new. Before computers, MIS techniques existed to supply managers with the information that would permit them to plan and control operations. The computer has added one or more dimensions such as speed, accuracy and increase volumes of data that permit the considerations of more alternatives in decisions.

CONCEPT OF MIS The concept of MIS has evolved over a period of time comprising many different facets of the organisational functions. The initial concept of MIS was to process data from the organization and present it in the form of reports at regular intervals. This concept was further modified when a distinction was made between data and ifnormation. What is needed is an information and not a mass of data .However, the data can be analysed in a number oif ways, producing different shades and specifications of the information as product . This concept was further modified , that the system should present information in sucha form and form that it creates impact on user, provoking decisions,an action or investigation.Hence the concept of exception reporting was imbibed in MIS. The concept was then evolved that the system should be capable of handling needbased exception reporting. This need maybe either for an individual or a group of people.This called for keeping all data togetherin such a form that it can be accessed byanybody and can be processed to suit his needs..This gave rise to the concept of DATABASE. Over a period of time, when these conceptual developments were taking place, the concept of the end user computing using multiple database emerged. The change was, decenteralization of the system and the user of information becoming independent of computer professionals.When thsi became reality, concept of MIS changed to decision making system. A MIS can be evolved for a specific objective if it is evolved after systematic planning and design.It calls for an analysis of a business, management views and policies , organization culture and the management style.The information should be generated in this setting and must be useful in managing the business. The MIS today hanles databases, provides computing facilities,gives varitiey of decision making tool and gives information through data analysis, therefore it relies heavily on system theory . System theory offers solution to handle the complex situations of input and output. The conceptual view of MIS:

The concept is a blend of principles, theories and practices of management, information and

system giving rise to a single product called MANAGEMENT INFORMATION SYSTEM. The concept of management gives high regard to the individual and his ability to use the information. MIS gives information through data analysis for which it relies on many academic disciplines like management science, OR, organization behavior, psychology, etc. The foundation of MIS is the principles of management and its practices. The MIS,therefore relies heavily on systems theory.

PHYSCIAL VIEW OF MIS

The physical view of MIS can be seen as as assembly of several subsystems based on the databases in the organisation. These subsystems range from data collection, transacion processing and validating, processing, analysing and storing the information in databases. The subsystems could be at a functional level or a corporate level. The information is evolved through them for a functional or a departmental management and it provides the information for the management of business at the corporate level.All the systems shown in the above diagram together are MISs. SYSTEM APPROACH. The idea of system approach in business was born with the notion of synergism, ie. The working together of two things to produces an affetc greater than the sum of their individual affects. Due to the increased complexity of business and management , the effectiveness of business organization has been been less optimum because managers fails to relate the part or fucntions of the systems to each other and the whole. The need for synergy in organization calls for the systems approach in management. It has been accelerated by two major reasons: The increased complexity of business

The increased complexity of management

The increased complexity of business can be attributed to four primary causes (i) Technological revolution (ii) Research and development (iii) Product changes (iv) Information explosion The increased complexity of management can be met by following four breakthroughs or developments: (i) The theory of information feedback systems (ii) A better understanding of the decision making process (iii) Operations research or management science techniques that permit an experimental or simulation approach to complex problems (iv) The electronic computer

MANAGEMENT INFORMATION SYSTEM

Before begin with to understand the term MIS, it is important to understand the three subcomponents: Management, Information and System - spereately so that when put together , it can bring out the focus clearly & effectively. Management: Management can be defined as science of using resources rationally (using appropriate skills, approaches and techniques) and economically to achieve desired results. Management comprises the processes or activities that managers do in the operation of their organization: plan by setting strategies and goals and selective the best course of action to achieve the plan ; They organize the tasks necessary for the operational plan , set these tasks up into homogeneous groups and assign authority delegations . They control the performance of the work by setting performance standards and avoiding deviations from standard. Information: The information is product of analysis of data. This concept is similar to a raw material and a finished product, where data is a raw material and the finished product is information. Information consists of data that have been retrieved, processed, or otherwise used for informative or inferences purposes, or a basis for forecasting or decision making. System: A system can be described simply as a set of elements joined together for a common objective. A subsystem is part of a larger system with which we are concerned. All systems are part of larger systems. In MIS, the word system implies that MIS follows a system approach which means a wholistic approach and is based on the concept of synergy where the output is greater than the sum of its parts. Thus , it clearly indicates that MIS is not a single system, rather it is an integrated system where fit into an overall design. Hence, The system concept of MIS is therefore one of optimizing the o/p of the organization by connecting the operating subsystems through he medium of information exchange.

MIS: DEFINITION:
The MIS is defined as an integrated system of man and machine for providing information to support the operations, the management and the decision making functions in the organization. A management information system (MIS) is a subset of the overall internal controls of a business covering the application of people, documents, technologies, and procedures by management accountants to solve business problems such as costing a product, service or a business-wide strategy. MIS are distinct from

regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, ex: Decision Support Systems, Expert systems, and Executive information systems. It has been described as, "MIS 'lives' in the space that intersects technology and business.

Technology

Businesss

MIS combines tech with business to get people the information they need to do their jobs better/faster/smarter. Information is the lifeblood of all organizations - now more than ever. MIS professionals work as systems analysts, project managers, systems administrators, etc., communicating directly with staff and management across the organization." The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making. The area of study called MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science. IT service management is a practitioner-focused discipline. MIS has also some differences with Enterprise Resource Planning (ERP) as ERP incorporates elements that are not necessarily focused on decision support.

VARIOUS OTHER DEFINITIONS FOR MIS "An integrated user-machine system for providing information to support operations, management and decision making functions in an organization. The system utilizes computerized and manual procedures; models for analysis, planning, control and decision making; and a database." A management information system (MIS) is a computer-based system that provides the information necessary to manage an organization effectively. An MIS should be designed to enhance communication among employees, provide an objective system for recording information and support the organization's strategic goals and direction. WHY MANAGEMENT INFORMATION SYSTEM? A majority of workers today are knowledge workers they spend time creating, distributing, or using information. Example: bankers, coordinators, caseworkers, counselors, community organizers, programmers, etc About 80% of an executives time is devoted to information receiving, communicating, and using it. Information is the basis for virtually all activities performed in an organization. Best use of two key ingredients in organizations people and information. Effective utilization of information systems in management.. Productive use of information. Information is a resource to increase efficiency, effectiveness and competitiveness of an enterprise. Some Examples of MIS Airline reservations (seat, booking, payment, schedules, boarding list, special needs, etc.) Train reservation

 Bank operations (deposit, transfer, withdrawal) Payroll management system Library Management System MIS PRINCIPAL CONCERNS Facilitate decision making by supplying the information needed in an up-to-date and accurate form To the people who need it On time In a usable form MIS OBJECTIVES: An effective MIS has the following objectives 1. Facilitate the decision - making process by furnishing information in the proper time frame. This helps the decision - maker to select the best course of action. 2. Provide requisite information at each level of management to carry out their functions. 3. Help in highlighting the critical factors to the closely monitored for successful functioning of the organization. 4. Support decision-making in both structured and unstructured problem environments. 5. Provide a system of people, computers, procedures, interactive query facilities, documents for collecting, sorting, retrieving and transmitting information to the users. MIS FUNCTIONS: Any MIS performs the following functions: Data Capturing: MIS gets / captures data from various sources in the organization or external sources through manually or computers. Processing: Data captured is processed to get the required information. Processing may includes calculating, sorting, organizing, analyzing, manipulating data using different methods. Storage: The processed / semi processed information is stored in an accurate manner to be referred later on. Retrieval: Information can be retrieved as and when required. Distribution: Information is distributed in the form required. CHARACTERISTICS OF MIS :

The Basic characteristics of an effective Management Information System are as follows: (1) Management-oriented: The basic objective of MIS is to provide information support to the management in the organization for decision making. So an effective MIS should start its journey from appraisal of management needs, mission and goal of the business organization. It may be individual or collective goals of an organization. The MIS is such that it serves all the levels of management in an organization i.e. top, middle and lower level. (2) Management directed: When MIS is management-oriented, it should be directed by the management because it is the management who tells their needs and requirements more effectively than anybody else. Manager should guide the MIS professionals not only at the stage of planning but also on development, review and implementation stages so that effective system should be the end product of the whole exercise in making an effective MIS. (3) Integrated: It means a comprehensive or complete view of all the sub systems in the organization of a company. Development of information must be integrated so that all the operational and functional information sub systems should be worked together as a single entity. This integration is necessary because it leads to retrieval of more meaningful and useful information. (4) Common data flows: The integration of different sub systems will lead to a common data
flow which will further help in avoiding duplicacy and redundancy in data collection, storage and processing. For example, the customer orders are the basis for many activities in an organization viz. billing, sales for cashing, etc. Data is collected by a system analyst from its original source only one time. Then he utilizes the data with minimum number of processing procedures and uses the information for production output documents and reports in small numbers and eliminates the undesirable data. This will lead to elimination of duplication that simplify the operations and produce an efficient information system.

(5) Heavy planning-element: The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 years and sometimes a much longer period. So the system expert has to keep 2 things in mind one is that he has to keep future objectives as well as the firms information well in advance and also he has to keep in mind that his MIS will not be obsolete before it gets into action. (6) User friendly/Flexibility: An MIS should be flexible i.e. there should be room for further modification because the MIS takes much time in preparation and our environment is dynamic in nature.MIS should be such that it should be used independently by the end user so that they do not depend on the experts.

PG:220 MANAGEMENT BY EXCEPTION - JAWEDKAR

Read following pages from your text book before pursuing further. Pg:45-48 -ORGANIZATION AS SYSTEM - JAWEDKAR Pg: 104 107 ORGANIZATION AND INFORMATION, MIS AND INFORMATION CONCEPTS, MIS AS PYRAMIDAL STRUCTURE - JAWEDKAR MIS has been described as a pyramidal structure, with four levels of information resources. The levels of information would depend upon the organizational structure. The top level supports strategic planning and policy making at the highest level of management. The second level of information resources aid tactical planning and decision making for management control. The third level supports day-to-day operations and control. The bottom level consists of information for transaction processing. It then follows that since decision making is specific to hierarchical levels in an organization, the information requirements at each level vary accordingly. REFER JAWAEDKAR

Location of MIS in the organisation

For proper discharge of functions in any org, MIS should be appropriately placed in any org. The exact location of MIS in the org depends upon the type of business the organisation is in and how important is the info for the organisation. Eg in banking, transport, airlines etc. data processing and MIS are prevalent an all areas of business. The various alternatives are As part of financial dept: In such type of structures the MIS dept is placed under the authority of the finance manager/Chief finance officer. In many companies, the finance org gained early control over computer centre. As a result, information system were conceived of as control decision aid rather than planning decision aid. Under the direct control of chairman/Director/Chief Executive: This is done to give more importance to the MIS functions and get acceptance from other areas of organisation as well. This is also done so that the accurate information can be supplied to everyone without distortion.

MIS as a distinct entity: MIS is given a separate status or entity in the organisation as other functional areas of the org.

(I) MIS in the Organisation Concept

For designing the MIS for the Organisation, the information needs or requirement of the diff erent processes of the management are seen. (1) Info needs for Planning Planning requires analysis of external and internal info The internal info are: 1. Policies sales disc, stock levels, employee info etc... 2. Financial plans and budgets sales budgets, capital expenditure budgets, purchasing budgets, labour schedule atc. 3. Forecasts sales forecast, site location, machinery, infrastructure needs etc.

4. Resources logistics, finance, labour, employees etc. The external organizing are: Govt regulations, economic trends, social trends, demography, technology, competitiveness etc. (2) Info needs for organising Info regarding wages, salaries, staff restructuring, takeovers, mergers etc (3) Info needs for Controlling Monitoring quality of services and products, steady sales, good cash flows, monitoring feedback and performance. (4) Info needs for Directing Keeping track of skills and performance of staff, employing better infrastructure, revamping of resources, dept etc. (II) MIS in the Organisation DESIGN Various phases of designing and MIS for the org are: Study and analysis: this phase includes duty of the org goals, analyzing resources, analyzing the human and technological capabilities, evaluating the MIS design using cost beneficial analysis. Design: this phase includes the determination and evaluation of subsystems, determining the computerization needed, creation of databases , establishing the inputs and outputs. Taking feedback and documentation. Implementation: Organizing the computer infrastructure. Training the end-users Modifying the modules based on feedback from users Debug and test the modules Evaluating the complete system Documentation Switching from the old system to new system Evaluating periodically Maintenance of system Planning for the expansion of the new system.

ADVANTAGES / IMPACT OF MIS 1. It Facilitates planning : MIS improves the quality of plants by providing relevant information for sound decision making . Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations.

2. In Minimizes information overload : MIS change the larger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts.

3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures.

4. It brings Co ordination : MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization .

5. It makes control easier : MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance. The used computers has increased the data processing and storage capabilities and reduced the cost .

6. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information

7. MIS helps better understand the business itself as it begins with the basic definition of each and every data entity and its attributes.

8. MIS calls for systemization of operations for an effective system design which to leads to streamlining of operations.

ROLE OF MIS IN AN ORGANIZATION

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 heart works faster and supplies more blood when needed. It regulates and controls the incoming impure 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 organization. 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 and the top management. The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support Systems the MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing. 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 junior management personnel by providing the operational data for planning, scheduling and control, and helps them further in decision making at the operations level to correct an out of control situation. 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 helps the top management in goal setting, strategic planning and evolving the business plans and their implementation. The MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS, therefore, plays a vita role in the management, administration and operations of an organization.

LIMITATIONS OF MIS Quality of outputs is governed by the quality of inputs and processing. MIS mostly emphasizes on the quantitative aspects of details rather than qualitative aspects. MIS do not have the flexibility to update itself with the changing times. MIS can not provide sometimes the requisite information for all decisions. It is affected by the frequent changes in the top management.

CLASSIFICATION OF INFORMATION SYSTEMS: An Information System model consists of the following: Resources such as people, data, hardware, software and networks are used by Information Systems. Information Processing consists of system activities of input, processing, output, storage and control. The major roles of Information Systems are:1. Support Business Processes 2. Support Decision Making 3. Support Competitive Advantage Types of Information Systems 1. Operations support systems produce a variety of information products for internal and external use, which process data used by business operations. These have three further categories:a. Transaction processing systems record and process data resulting from business transactions. Transactions are processed in two basic ways: i. Batch, where transactions are accumulated over a period of time. A group of entries are made at a time; which are accepted by the information system, on a command by the user, for updating the records. ii. Real-time or on-line, where processing is done immediately. Whenever an activity takes place in the organization, an entry is made in the information system in the form of a record and the computer automatically updates its all other records affected by the entry b. Process control system monitors and controls physical process c. Enterprise collaboration systems enhance team and workgroup communication and productivity and are also called office automation systems. 2. Management support Systems provide information and support for effective decision-making. These are of following types a. Management Information Systems provide information in the form of reports and displays to managers and many business professionals b. Decision support systems give direct support to managers during the decision-making process. It provides some indications to a user on the basis of information stored in the system and the parameters provided by the user. c. Executive information systems provide critical information from a wide variety of internal and external sources, in easy-to-use displays, to executives and managers. 3. Expert systems provide expert advice from operational chores like equipment diagnostics or decisions for loan portfolio management. 4. Knowledge management systems support the creation, organization and dissemination of business knowledge to employees and managers throughout the company. 5. Functional business systems focus on operational and managerial applications in support of basic business functions such as accounting or marketing. 6. Strategic information systems apply IT to firms products, services, or business processes to help it gain a strategic advantage over its competitors. 7. Cross functional Information Systems interact with several types of Information Systems that provide a variety of functions.

The success of an Information System is measured not only by its efficiency in terms of minimizing costs, time and the use of information resources, but also by the effectiveness of Information Technology in supporting an organizations business strategies, enabling its business processes, enhancing its organizational structures and culture, and increasing the customer and business value of the enterprise. Information systems can be classified on the following basis as well1. By usage a. Transaction processing b. Management Information c. Decision support d. Expert system 2. By levels of management a. For operational control TPS, OAS b. For management control- MIS c. For strategic control- DSS, EIS 3. By application a. Manufacturing b. Warehousing c. Distribution d. Marketing e. Retailing f. Services g. Banking h. Insurance i. Transportation j. Governmental k. Defense l. GIS
The information needs are different at different organizational levels. Accordingly the information can be categorized as: strategic information, managerial information and operational information.Strategic information is the information needed by top most management for decision making. For example the trends in revenues earned by the organization are required by the top management. The information systems that provide these kinds of information are known as Decision Support Systems.The second category of information required by the middle management is known as managerial information. The information required at this level is used for making short term decisions and plans for the organization. Information like sales analysis for the past quarter or yearly production details etc fall under this category. Management information system (MIS) caters to such information needs of the organization. Due to its capabilities to fulfill the managerial information needs of the organization, Management Information Systems have become a necessity for all big organizations. And due to its vastness, most of the big organizations have separate MIS departments to look into the related issues and proper functioning of the system.The third category of information is relating to the daily or short term information needs of the organization such as attendance records of the employees. This kind of information is required at the operational level for carrying out the day-to-day operational activities. Due to its capabilities to provide information for processing transaction of the organization, the information system is known as Transaction Processing System or Data Processing System. Some examples of information provided by such systems are processing of orders, posting of entries in bank, evaluating overdue purchaser orders etc.

TRANSACTION PROCESSING SYSTEM: As the name indicates, TPS records and processes data and produces reports . It represents the automation of the fundamental , routine processing used to support business operations. It does not provide any information for decision making purpose. These systems process transactions either in batch processing or real time processing. Eg: Point of sale systems at many retail stores uses electronic cash register terminals to elecetronically capture and transmit sales data over telecommunication links to head office computer center for immediate (real time ) or weekly ( batch) processing. TPS is shown in the following diagram

DATA

PROCESSING

DATA

INPUT

OUTPUT

TPS processes business transaction of the organization. Transaction can be any activity of the organization. Transactions differ from organization to organization. For example, take a railway reservation system. Booking, canceling, etc are all transactions. Any query made to it is a transaction. However, there are some transactions, which are common to almost all organizations. Like employee new employee, maintaining their leave status, maintaining employees accounts, etc.This provides high speed and accurate processing of record keeping of basic operational processes. These include calculation, storage and retrieval. Transaction processing systems provide speed and accuracy, and can be programmed to follow routines functions of the organization. COMPONENTS OF TPS: INPUT: Various inputs of a TPS are in the form of source documents, such as customer orders, purchase orders, invoices, employee time cards etc. These document help TPS capture data, facilitate operarations by communicating data and providing permanent file for future use uf documents are retained. PROCESSING: Processing involves the use of journals and registers to provide a chrological record of inputs. Journals are used to record financial accounting transactions, and registers are used to record other types ofdata not directly related to accounting. STORAGE: The computer stores various records in files. There are several types of file which are classified as transaction file and master file. Transaction files usually contain data that are temporary in nature. Master file contains data that are of a more permanent nature or continuing interest. OUTPUT: Variety of output can eb generated from a TPS which can be used for various puropses. These outputs are in the form of documents.Some of these outputs can eb used as inputs for further processing.

METHODS FOR PROCESSING TRANSACTIONS: Real time processing: In a real time processing, there is a continual input, process and output of data. Data has to be processed in a small stipulated time period (real time).Each transaction in real-time processing is unique. It is not part of a group of transactions, even though those transactions are processed in the same manner. Transactions in real-time processing are stand-alone both in the entry to the system and also in the handling of output.Real-time processing requires the master file to be available more often for updating and reference than batch processing. For example: assembly line robots , ATM transaction and radar system. Batch Processing In a batch processing group of transactions collected over a period of time is collected, entered, processed and then the batch results are produced. Batch processing requires seperate programs for input, process and output. It is an efficient way of processing high volume of data. With batch processing, the data is organised and stored before the master file is updated. Errors can occur during these steps. The database is not accessible all of the time for batch processing. For example: Payroll system,billing system, Examination system and billing system.

MANAGEMENT SUPPORT SYSTEM: These are the information system applications that focus on providing information and decision support for effective decision making by managers. 1) MANAGEMENT INFORMATION SYSTEM: MIS is an information system which processes data and converts it into information. MIS uses TPS for its data inputs The information generated by MIS may be used for control of operations, strategic and long range planning ,short range planning , management control and other managerial problem solving. In contrast to TPS, MIS is more comprehensive; it encompasses processing in support of a wide range of organizational functions and management processes. Secondly, MIS is capable of providing analysis, planning and decision making support. MIS is also defined as an integrated system . In business organizations, information systems are generally developed to cater to the information needs of managers of each of the functional areas of the business. The functional areas may be marketing, production, human resource, finance etc.There may be a common structure useful to each of these business functions. Integration of the information may be: Hierarchical Operational level systems feed data to a higher level system. Horizonatal - Integration of information systems within a functional area or a chain of command . Eg: Production department may several processes in which information will be passed form one process to another process. Cross functional Associated with different functional areas. Eg: Production department sending information sales department.

FEATURES AND COMPONENTS OF MIS HAS BEEN DISCUSSED ABOVE.

DECISION SUPPORT SYSTEM

A DSS is an information system application that assists decision making. DSS tends to be used in planning, analysing alternatives and trial and error search for solutions.Such systems are generally operated through terminal based interactive disalouges with users. They incorporate a variety of decision models and thus are capable of performing what if analysis for managers. Each DSS is different from the other infromation system and is tailor made for every manager. A DSS is tailored to a specific managerial task or special problem , its use is limited to that task or problem. DSS tend to be designed to serve management control level and strategic planning level managers. The elements of a DSS include a database , model base and a software providing interactive dialouge facility for the manager. DSS has three major components: Database / Knowledge base: Combination of internal corporate files and data from external sources. A DSS does not create or update data as this is not its function; rather it uses live organisational data so that individuals and groups are able to make decisions based on actual conditions.While controlling and processing data from the database , the DSS protects the integrity of data. Model Base : A model base is a collection of mathematical and analytical models that can be made accessible to the DSS users. The model base, contains one or more models for the kind of analysis the system will perform. For example, if the purpose of the system is to supply sales projections under different conditions, one model might be a linear regression formula derived from past sales and other factors., Analysing demand by industry. User interface: User can communicate with DSS via terminal hooked up to the mainframe computers either directly or indirectly . The user interface integrates the two into a coherent system and provides the decision maker with controls forand possibly feedback aboutmanaging the data and the models.

DATABASE

MODEL BASE

USER INTERFACE

USER

DSS goes one step further to MIS and it uses MIS to take some relevant information. a1 Information from MIS a2 a3 DSS can be diffierentiated from MIS in terms of its processing capabilities. Whereas MIS processes data to convert it into information; DSS processes information to support the decision making process of a manager. MIS will provide relevant infromation on the basis of which decisions can be taken but DSS will help user do what-if analysis and decide on which decision is to be taken. DS provides an interactive dialouge which the user can interact with the system to add/alter the data as per his/her requirements whereas in MIS, user can not interact with the system. Decision ( most appropiate alternative)

EXPERT SYSTEM:

Business expert system which are based on artificial intelligence , are advanced infromation systems. AI may be reffered to as the capability that makes computer display intelligent, human like behavior.For example, reasoning , drawing inferences , learning and problem solving are such acts of intelligence. A Expert system is a knowledge based information system that uses its knowledge about a scpecific , complex application area to act as an expert .Thus , expert systems provide deicison support to managers in the form of advice from an expert ina specific problem area. Expert systems find application in diverse areas , ranging from medical, engineering and business. The main advantages of using expert systems may be outlined as follows: 1) The knowledge of many experts can be used to build a single expert system. 2) Decision - making in critical times can be more relaible , as these systems are not affected by emotional factors or fatigue. 3) Multiple hypotheses can be considered simultaneously. The expert system is interactive in nature , which enables it to ask questions f the user. On the basis of these questions , an expert system searches its knowledge base for facts and rules , explains its reasoning process when asked and comes out with expert advice to te end user in the subject area being explored. The main component of expert system includes:

Rules,facts

Logic

User interface

Knowledge base: contains facts about the specific expert area and heuristic that describe the reasoning procedures of an expert on the subject. It contains various rules that are applied in arriving at solutions. A rule specifies -'IF -Then-' PROPOSITION depending upon the nature of the problem. Inference engine : contains the logic of reaching an inference from the stored data and rules.It performs reasoning work by using the contents of knowledge base in a particular sequence. It examines the rules of knowledge base one at a time and if a rule's condition is true , the specified action is taken. User interface: User interface enables the user to enter the instruction/ information in the system and to get solutions/ explanations fromt he system.

Executive information system

An Executive Information System (EIS) is a type of management information system intended to facilitate and support the information and decision-making needs of senior executives by providing easy access to both internal and external information relevant to meeting the strategic goals of the

organization. It is commonly considered as a specialized form of a Decision Support System (DSS) The emphasis of EIS is on graphical displays and easy-to-use user interfaces. They offer strong reporting and drill-down capabilities. In general, EIS are enterprise-wide DSS that help top-level executives analyze, compare, and highlight trends in important variables so that they can monitor performance and identify opportunities and problems. An EIS is an information system at the strategic level of an organisation designed to address unstructured decision making through advanced graphics and communications. Features: 1) EIS are relevant to top management of an organisation, the level at which strategic decisions affecting the organisation are made. 2) EIS cut accross the functional areas. These system may derive daa from different functional areas but the decisions are made for the organisation as a whole. 3) EIS combines both internal and external information. While external information is related to customers, suppliers, competitors, government policies, internal information is related to the working of the entire organization. 4) The information generated by EIS is in the form of summary, reports opr graphics. Component of executive information system Like any other information system, EIS have the same component users, database,software, and output. However, the nature of all these components is different because of different requirements of EIS ..figure shows the components of an Eis. Thus, the major components of an executive information system are executive and his staff,database, and output. Executive Query

EIS Software Data mining DatabaseDatwarehouse Datamart

Executive An executive is the end user of output derived from EIS .through executivesmay retrieve desired information and on there own specially database contain taiolered info..most of the executive preferred to get this job done by there staff either bcoz they are busy in there work or they do not prefer to work on computer . Database Database for EIS is both comprehensive as well as specific it is comprehensive in the sense that EIS require data about functioning of the entire organization besides data about environmental factors custumers,suppliers , competitors, govt policies toward business and technological development. Data for EIS is specific because relevant data for EIS must must be stored in concise from an easy retrival and protecting, them from unauthorized access bcoz a significant portion of data may be sensitive and need confidently. Database for EIS may be categorized as data warehouse and datamart.

---> Datawarehouse A data warehouse is a collection of current and historical operational data stored for use in EIS .bisides operational data ,stored from various departnentof an org, relevant environmental data are also stored. The data are usally extracted from a number of sources and collected, integrated and storedin a relational database for quick and easy access without affecting the data of the underline traction processing system.the data in the warehouse may be update daily,weekly , biweekly or monthly,depending on the type of data and the need of the user. ---->Datamart A data mart is usallty a customized database as per the requirmentof a specifis type of users. Datamart are created generally from a data warehouse which contain data to be used for a variety of purposes and by variety of users.for creating a datamart, relvant data are extracted fropm data warehouses and are earmarked for specific users . EIS datamart contain those data which are relevant for executives for strategic management that involves strategic planningand strategic control. Datamining is an activity which involves finding relevant data from the data warehouse . it just like normal mining activity in which minerals are extracted from mine.data mining attempts to discover various pattrren which are followed by available data automatically. EIS software EIS software is dedicated from that is used for data manipulation from database. EIS software falls in three catogries ie. Personal productivity ,prewritten EIS software, customised software Personal productivity software It is generally purpose software that any one can use to develop his own application.many of software system relevant for DSS. Such as spead sheet,analysis package ,model generator e.t.c, can be used for EIS to through the orientation is differ .while for DSS such tools are used primarily for modlling and analysis in a fairly narrow range of decision situations. Prewritten EIS software It is specially designed to meet the information needs of executives. Such a software generally provides compression and drill down facility . Some software developers have developed prewritten EIS software which contains external information in the form of industry trends , competition analysis etc. Customised EIS: If an organisation does not want to use prewritten sofwtare, it can develop EIS software on its own according to its specific requirement. Such a software is more useful than other availble alternatives. EIS output: EIS output may be in the forms of reports and graphics. These may be either through hard copy or screen display. EIS report is brief and without much technical jargons.

GROWTH AND DEVELOPMENT OF MIS NOLAN'S GROWTH MODEL FOR MIS:

It is pertinent to realise the importance of growth of MIS in stages in order to encounter increasing complexities of business processes and changing scenario of management. Nolan Stage Model is based on fact that any organisation will move through stages of maturity. The Nolan stage model has identified four stages of information system growth. There are six stages in the growth of MIS according to NOLAN's model. 1) Initiation The first growth stage is known as initiation stage. In this stage, there is Initial introduction of computers to the organisation. A few applications in the organization are computerized. There are only a small number of users.This type of systems have rudimentary technology to handle clerical and supervisory operationsin the organisation. 2) Contagion/Contagious: The advantages of computerisation are gradually realised by most of the people in an organisation . This leads to proliferation of computer , networking technologies and computer based system applications within an organisation.During this stage rapid and uncontrolled growth in the number and variety of IT applications takes place. Many users adopt computers in solving their IT-related problems 3) Planning and control: As demand for computerisation increases, a need is realised for cost benefit analysis. In this stage, organisations gain control over the technology's resources by implementing formal control processes and standards. Thus, organisations are able to apply cost-effectiveness criteria.This is imperative to plan for future MIS in cosr effective manner However, controls sometimes become barriers in attaining potential benefits. 4) Integration of subsytems: In this stage, the use of new technology increases rapidly, providing new benefits. Much emphasis is laid on integrating the applications.This comes with realisation of inter dependence of inflow of data from various sources for valid information. Management leverage existing subsystems to a unified system. Objective is to obliterate data redundancy and facilitate communication of information amongst various department.

5) Data administration: Here impetus is on regulating data for company wide communication .Database capibility is exploited as users understand the value of inofmration and are willing to share it. In this stage, controls are further lowered to encourage development of systems which contribute to strategic advantage of the organization

6) Maturity: In the enhanced growth model, this stage is termed as the maturity stage. This stage indicates that the application portfolio is complete and matches the objectives of the organization. Now organisation is geared up to plan future MIS needs for an organisation. The feedback from users of exissting MIS is also taken into account.

RECENT DEVELOPMENT IN FIELD OF MIS

(1) OBJECT ORIENTED SYSTEM ANALYSIS AND DESIGN The latest development on systems analysis and design is marked with the evolution of the concepts of object oriented systems. The growth of object orientation in system design and development can primarily be attributed to popularity of GUI (Graphical User Interface) and Windows based systems

which have become norms of all type of computer application in recent times. The sophistication of the features in applications such as GUI has lead to object oriented approach whose distinction lies in creating reusable codes In simple terms, objects are the elements through which we perceive the real world. Object has characteristics of identity, behavior and state with reference to the stage of its functions. Class of objects identifies the typical objects of the same types. Typical objects are part of applications such as banks, customers, shops, automobiles etc. or abstract coding tools such as data structures, stacks, queues etc. which are used to develop and implement the applications. The key features of object oriented approach are abstraction, encapsulation, inheritance and polymorphism. Inheritance is a process in which a class inherits all the state and behavior of another class. this type of relationship is called child-Parent or is-a relationship. "Subclasses" are more specialized versions of a class, which inherit attributes and behaviors from their parent classes, and can introduce their own. Abstraction is simplifying complex reality by modeling classes appropriate to the problem, and working at the most appropriate level of inheritance for a given aspect of the problem. For example, Lassie the Dog may be treated as a Dog much of the time, a Collie when necessary to access Collie-specific attributes or behaviors, and as an Animal (perhaps the parent class of Dog) when counting Timmy's pets. Encapsulation conceals the functional details of a class from objects that send messages to it. For example, the Dog class has a bark() method variable,data. The code for the bark() method defines exactly how a bark happens (e.g., by inhale() and then exhale(), at a particular pitch and volume) Polymorphism allows the programmer to treat derived class members just like their parent class's members. More precisely, Polymorphism in object-oriented programming is the ability of objects belonging to different data types to respond to calls of methods of the same name, each one according to an appropriate type-specific behavior. Object oriented approach perceives the analysis and design as a unified single process where the development stages progressively expand upon singular model of a system, whereas in contrast traditional approach of analysis and design use different models at different stages of development. In object oriented analysis a singular model of problem is created by identifying objects and classes (by extension) existing in problem domain. (2) TQM: Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company. TQM looks at the overall quality measures used by a company including managing quality design and development, quality control and maintenance, quality improvement, and quality assurance .A number of key principles can be identified in defining TQM, including: Executive Management Top management should act as the main driver for TQM and create an environment that ensures its success. Training Employees should receive regular training on the methods and concepts of quality. Customer Focus Improvements in quality should improve customer satisfaction. Decision Making Quality decisions should be made based on measurements.

 Methodology and Tools Use of appropriate methodology and tools ensures that nonconformances are identified, measured and responded to consistently. Continuous Improvement Companies should continuously work towards improving manufacturing and quality procedures. Company Culture The culture of the company should aim at developing employees ability to work together to improve quality. Employee Involvement Employees should be encouraged to be pro-active in identifying and addressing quality related problems. (3) Manufacturing Execution Systems (MES) are information technology systems that manage production in factories. The scope of such systems is somewhat imprecise, but typically includes: presentation of schedules (often derived from ERP or Advanced Planning & Scheduling systems) to workcentres collection of production information (time, quantity, quality,...) analysis of production information (e.g. "How many units of this product did this workcentre produce last month?") control of planned and unplanned maintenance (although the planning of this is often relegated to other, special-purpose, systems) quality control shipping / dispatch product labelling product traceability (particularly important in safety-critical applications, e.g. pharmaceuticals) Manufacturing execution systems typically do not encompass process control, i.e. the real-time control of machinery, but there may be an overlap. (4) Statistical process control (SPC) is the application of statistical methods to the monitoring and control of a process to ensure that it operates at its full potential to produce conforming product. Under SPC, a process behaves predictably to produce as much conforming product as possible with the least possible waste. While SPC has been applied most frequently to controlling manufacturing lines, it applies equally well to any process with a measurable output. Key tools in SPC are control charts, a focus on continuous improvement and designed experiments. Much of the power of SPC lies in the ability to examine a process and the sources of variation in that process using tools that give weight to objective analysis over subjective opinions and that allow the strength of each source to be determined numerically. Variations in the process that may affect the quality of the end product or service can be detected and corrected, thus reducing waste as well as the likelihood that problems will be passed on to the customer. With its emphasis on early detection and prevention of problems, SPC has a distinct advantage over other quality methods, such as inspection, that apply resources to detecting and correcting problems after they have occurred. (5) BPR: BPR is a strategic decision to redesign the way the business is managed . The importance of a buzzword BPR has emerged because the competitve pressure to meet customer's expectations is radically evolving at such a fast pace that even a continuous improvement of products and services through quality control technqiues is not sufficent to

survive in the golbal market place and need for transformation of management process is ordained. BPR covers 3 fundamental approaches namely process improvement, process redesign and process reengineering. Key principles in BPR: 1) customer driven 2) conceptually strategic 3) concentrating on key business processes 4) senior executive involvement 5) eliminating non value added processes 6) communication of clear vision.

MIS BASICS
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. 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 are 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.

IMPORTANT QUESTIONS 1. Define MIS and explain its main characteristics. 2. What do you understand by DSS, explain with a diagram and example? 3. What is the role of MIS in the organisation? Give 3 reasons for using computers for MIS. 4."Lack of integration between organisation systems and MIS leads to disastrous results". Explain. 5. Explain Nolan's stage growth model for MIS.

6. Describe the following:a) Components of EIS b) Expert system c) DSS vs TPS d) Transaction processing system e) Data vs Information with an example 7.'One persons data is another person's information'. Explain his statement with example. 8. Discuss the relationship between TPS, MIS and DSS. 9. How does MIS system support management by exception? 10. Explain how different information systems support different management levels in an organization.