Management

Information Systems

Module 1
Foundation of information systems ; Evolution of
MIS: Concepts; framework for understanding and
designing MIS in an organization; Concept of
information; definition, features, types, process of
generation and communication; quality and value
of information; information overload; techniques
for managing overload; summarizing; filtering
;inferences and message routing. System concept;
definition, types and characteristics of systemcontrol in systems : feedback: positive and
negative; negative feedback control system, input,
process and output control; law of requisite variety.

Introduction to INFORMATION
SYSTEM
Its

an organized combination of people,

h/w, s/w, communication networks and
data resources that collects, transforms &
disseminate information in an
organization.
Aninformation system and MIS(IS) orapplication landscape- is any
combination ofinformation technologyand
people's activities that support operations,
management and decision making.

 Components
People
H/W
S/W
N/W
Data

of IS

 ISs

can be categorized in four parts:

Management Information System
(MIS)
Decision Support System(DSS)
Executive Information System(EIS)
Transaction Processing System(TPS)

IS FRAMEWORK

Roles of IS

Support
Strategies for
Competitive Advantage
Support
Business Decision
Making
Support
Business Processes and Operations

What is MIS?

MIS

Management

Information

System

Management

It describes What managers do in the operation

of their organization: Plan, organize, initiate and
control operations
They plan by setting strategies and goals and
selecting the best course of action to achieve the
plan.
They organize the tasks necessary for the
operational plan.
They Control the performance of work by setting
performance standards and avoiding deviations
from standard.
The most important task of managers is decision
making.

Information
Information consists of data that have been
retrieved , processed or otherwise used
for informative or inference purposes of
decision making.
Information improves the quality of decision
making.

System

A group of interrelated or interacting elements

forming a unified whole,
A group of interrelated components working
together toward a common goal by accepting
inputs and producing outputs in an organized
transformation process (dynamic system).
A system can be described simply as a set of
elements joined together for a common
objective.
Systems can be viewed as process models in
terms of their inputs, outputs, processing, and
feedback/control mechanisms.
Three basic interacting components:
Input

 System: A set of components that work together

to achieve a common goal

Subsystem: One part of a system where the
products of more than one system are combined
to reach an ultimate goal
Two types of Systems:
Closed system: Stand-alone system that has no
contact with other systems
Open system: System that interfaces with other

systems

MIS
Amanagement

information system(MIS)
provides information that organizations need to
manage themselves efficiently and effectively.
The MIS is defined as a system which provides
information support for decision making in the
organization.
The MIS is defined as a system based on the
database of the organization evolved for the
purpose of providing information to the people in
the organization.
The MIS is defined as a Computer based
Information System.

Management Information
Systems (MIS)(Contd)
An MIS provides managers with
information
and
support
for
effective decision making, and
provides
feedback
on
daily
operations
Output, or reports, are usually
generated through accumulation of
transaction processing data
Each MIS is an integrated collection
of subsystems, which are typically
organized along functional lines

Sources of Management
Information

Schematic

Employees
Corporate
Databases
databases
of
of
external
internal
data
data

Business
transactions

Transaction Databases
processing of
valid
systems

transactions

Operational
databases

Management
information
systems

Corporate
intranet

Application
databases

Drill-down reports
Exception reports
Demand reports
Key-indicator reports

Input and
error list

Scheduled
reports

Decision
support
systems
Executive
support
systems

Expert
systems

MIS A concept:
The

MIS is an idea which is

associated with man, machine,
marketing and methods for
collecting informations from the
internal and external source and
processing this information for the
purpose of facilitating the process of
decision-making of the business.

CHARACTERISTICS OF
MIS

Management oriented.
Management directed.
Integrated
Common data Flows
Strategic Planning
Bias towards centralization
Information and communication
technology enabled.

CHARACTERISTICS OF
MIS

Top down
design.
Focus is to
satisfy the
information
needs of the
management

Management oriented.
Management directed.
Integrated
Common data Flows
Strategic Planning
Bias towards centralization
Information and communication
technology enabled.

CHARACTERISTICSManagement
OF is
involved in the
MIS
design process

,continuous review
and up gradation
of MIS in order to
develop a good
quality system.
The system is
structured.
Minimizes the gap
between
expectation of the
management and
the actual system

Management oriented.
Management directed.
Integrated
Common data Flows
Strategic Planning
Bias towards centralization
Information and communication
technology enabled.

CHARACTERISTICS OF
MIS

Integrated with all the

operations and
functional activities of
the management.
Only an integrated
system can provide
the complete picture
of the scenario.

Management oriented.
Management directed.
Integrated
Common data Flows
Strategic Planning
Bias towards centralization
Information and communication
technology enabled.

CHARACTERISTICS OF
MIS
Data being stored

into the system,

retrieved from
the system,
disseminated
within the system
or processed by
the system can be
handled in an
integrated
manner.
Avoids data
duplication, data
redundancy, and
help simplify
operations.

Management oriented.
Management directed.
Integrated
Common data Flows
Strategic Planning
Bias towards centralization
Information and communication
technology enabled.

CHARACTERISTICS OF
MIS

Management oriented.
Management directed.
A high
Integrated
degree of
Common data Flows planning
Strategic Planning goes into
creating
Bias towards centralization
an MIS.
Information and communication
technology enabled.

CHARACTERISTICS OF
MIS

Management oriented.
Centralized
data
Management directed.
manageme
Integrated
nt helps an
MIS to
Common data Flows
exercise
Strategic Planning
version
Bias towards centralization control as
well as
Information and communication
provide an
technology enabled.
integrated
view of
data to the

CHARACTERISTICS OF
Informatio
MIS
n should

be timely
and
accurate
for
effective
decision
making

Management oriented.
Management directed.
Integrated
Common data Flows
Strategic Planning
Bias towards centralization
Information and communication
technology enabled.

MIS Functions:
The broad functions of MIS are
To improve decision making.
To improve efficiency.
To provide connectivity.
The main functions of MIS are
Data Processing
Prediction
Planning
Control
Assistance
27

Role and scope of mis

The

main scope of MIS corresponds to different phases

such as analysis, design, planning and construction.
These also include many other activities such as
implementation, utilization , evaluation and handling of
information systems for coordinating various activities
in the organization.
The MIS helps in strategic planning, management
control, operational control and transaction processing.
The MIS plays the role of information generation,
communication, problem identification and helps in the
process of decision-making.

Outputs of a
Management Information
System
Scheduled reports
Produced periodically, or on a schedule (daily,
weekly, monthly)

Key-indicator report
Summarizes the previous days critical activities
Typically available at the beginning of each day

Demand report
Gives certain information at a managers request

Exception report
Automatically produced when a situation is
unusual or requires management action

Management Information
Systems for Competitive
Advantage

Provides support to managers as

they work to achieve corporate
goals
Enables managers to compare
results to established company
goals and identify problem areas
and opportunities for improvement

nt

Structure of
OrganizationMIS

ectingStaffing
and
Management

TechniqueofManagement

Function of
Management

wsMan

3. Decision Technique
4.ExperienceRule

Planning Organization

Man Power

1. BehavioralScience Technique
2.QuantitativeTechnique

Directing

Resource Flows
Money,Material

Staffing

M/cFacilities

Controlling

/cFacilitiesMIS
MIS

Structureof MIS::

MIS structure be described by following a

variety of different approaches:
Physical

components,
Information system processing functions,
Decision support
Levels ofmanagement activities
Organizational functions

MIS Structure Based on

Physical components:
Structure of MIS may be understood by looking at thephysical
components ofthe information system in an organization.
Hardware:

Hardware refers the physical data processing

equipment and peripheral devices.

Software:

software is broad term given to the instruction or

program that direct the operation of the hardware.

Database:

the data base consist of all data utilized by

application software.

Input

and output: various physical input and output from the

information system, existing in the form like printout, report etc.

Information system processing functions:

Information system structure can alsobe understood in term of its

processing functions. The main processing functions of information
system are described below:
To

Process Transactions: Information systems process transaction

may be defined as an activity taking place in an organization.

To

Maintain Master files: Information systems create and maintain

master files inthe organization.Amaster file stores the historical
data about theorganization.

To

Produce Reports: Reports are significant products of an

information system. Many reports areproduces on a regular basis,
which are called scheduled reports.

To

Process Interactive SupportApplications

Decision Support:

Decision vary with respect to the

structure that can be provided
formaking them. A highly structured
decision can be pre-planned. A
structured decision, because of its
well defined nature can be said to
be programmable.

Level ofmanagement
activities:
The

structure of an information system can be

categorized in terms oflevel of the management
activities.

Strategic

planning dealswith long-range considerations.

The decisions include the choice of business directions,
marketstrategy, product etc.

Management

control level includes acquisition and

organization of resource, structuring of work and training
of personnel.

Operational

control is related to short-term decision

forcurrentoperations. Pricing, ,inventory level etc

Organizational functions:

The structure ofmanagement information system

can also be described in terms of the
organizationalfunctions.

Concept of Information
Information,

in its most restricted technical

sense, is asequenceofsymbolsthat can be
interpreted as amessage.
Information can be recorded assigns, or
transmitted assignals.
The information has a value in decision
making while data does not have.
Information brings clarity and creates an
intelligent human response in the mind.
information is the message(utterance or
expression) beingconveyed.

Evolution of Information System

The first business application of

computers
(in the mid- 1950s) performed
repetitive,
high-volume, transaction-computing
tasks.
The computers crunched numbers
summarizing and organizing
transactions
and data in the accounting, finance,

Definition
Datathat

is (1)accurateand timely, (2)

specific andorganizedfor a purpose, (3)
presented within acontextthat gives it
meaning and relevance, and (4) canleadto
anincreaseinunderstandinganddecreasein
uncertainty.
Information isvaluablebecause it
canaffectbehavior, adecision, or an
outcome.

Evolution of IS cont
Management Information Systems (MISs): these
systems access, organize, summarize and
display information for supporting routine
decision making in the functional areas.
Office Automation Systems( OASs): such as
word processing systems were developed to
support office and clerical workers.
Decision Support Systems: were developed to
provide computer based support for complex,
nonroutine decision.

End- user computing: The use or development

of information systems by the principal users of
the systems outputs, such as analysts,
managers, and other professionals.

Features or Characteristics of
Information
Improves

representation of an entity
Updates the level of knowledge
Has a surprise value
Reduces uncertainty
Aids in decision making

Types of information:
1.

Primary(Think of this as Firsthand)

Primary information is comprised of original materials that were

created first hand. This type of information isfrom the time period
involvedand hasnot been filtered through interpretation.
Examples are:
Diaries
Interviews (legal proceedings, personal, telephone, email)
Letters
Original Documents (i.e. birth certificate or a trial transcript)
Patents
Photographs
Proceedings of Meetings, Conferences and Symposia.
Survey Research (such as market surveys and public opinion polls)
Works of Literature

Types of information
(Contd.):
2. Secondary(Think of this as Second Hand)
Secondary information is made up of accounts writtenafter the fact
with the benefit of hindsight. It is comprised of interpretations and
evaluations of primary information. Secondary information is not
evidence, but rather commentary on and discussion of evidence.
Examples are:
Biographies
Books
Commentaries
Dissertations
Indexes, Abstracts, Bibliographies (used to locate primary &
secondary sources)
Journal Articles

Types of
information(Contd.):
3. Tertiary(Think of this as Third Hand)
Tertiary information is adistillation and
collection of primary and secondary
information.
Examples are:
Almanacs
Encyclopedias
Fact books

ROLE OF INFORMATION IN
DECISION MAKING
The

decision making process includes the

following stages:
Identification and structuring of
problem: One needs information to identify
a problem and put it in a structured manner.
Putting the problem in a context:
Without information about the context in
which the problem has occurred, one cannot
take any decision on it. In a way , the
context defines the problem.

 Generation

of alternatives:
Information is a key ingredient in the
generation of alternatives for
decision-making.
Choice of the best alternative:
Based on the information about he
suitability of the alternatives, a
choice is made to select the best
alternative.

Subsystems of an
information system
Data

Repository: This is a
subsystem which is at the core of
any information system. These
structures are arranged in a way that
helps in faster storage and retrieval
of data with adequate security.
User Interface: This subsystem
handles the interaction of the system
with the user and hence it has to
manage issues related to the display

Subsystems of an
information system
Network:

This subsystem ensures

communication between the different
entities of an information system.
Computer Hardware: An IT infrastructure
is needed in an effective manner.
System Software : Some basic software is
required for the efficient functioning of
information system.
Input/Output: I/O must be user
independent.

Subsystems of an
information system
Business

rule(process) : This is a set

rules which governs how a system
should function to imitate the real
business process.
Algorithm/program/ application
software: This is the actual invisible
component, which integrates all the
components. The logic is defined in
the program.

PROCESS OF GENERATION AND COMMUNICATION

Data processing can be defined as the

processing of data to make it more
usable and meaningful and thus
converting into information. It covers
all activities required for generating
information from data.

Steps in the process of generation

and communication of information:
Origination:
Input:
Processing:
Storing:
Data retrieval:
Production of documents:
7. Data communication:
1.
2.
3.
4.
5.
6.

Steps in the process of generation

and communication of information:
The main source of records used in
data processing is sales orders,
purchase orders or employee time
cards stored in magnetic tapes, disks
and terminals.

Origination:
Input:
Processing:
Storing:
Data retrieval:
Production of documents:
7. Data communication:
1.
2.
3.
4.
5.
6.

Steps in the process of generation

and communication of information:
The input of data stored on
these source documents
into the data processing
system. The data records
stored in secondary
devices is now fed into the
computer for processing.

Origination:
Input:
Processing:
Storing:
Data retrieval:
Production of documents:
7. Data communication:
1.
2.
3.
4.
5.
6.

Steps in the process of generation

and communication of information:
Computer
and
other
electronic devices are used
for processing data. Data
should be sorted and verified
before
processing.
Processing
involves
calculation,
comparison,
filtering and modification of
data according to users
requirements.

Origination:
Input:
Processing:
Storing:
Data retrieval:
Production of documents:
7. Data communication:
1.
2.
3.
4.
5.
6.

Steps in the process of generation

and communication of information:
Origination:
Input:
The
result
of
Processing:
processing of data
be kept for
Storing: must
future reference. This
function
is
called
Data retrieval:
storage.
Production of documents:
7. Data communication:
1.
2.
3.
4.
5.
6.

Steps in the process of generation

and communication of information:
Origination:
Input:
Processing:
With the introduction of
Storing:
information technology
users will be able to
Data retrieval: search
and retrieve files
records on-line with direct
Production of documents:
access devices.
7. Data communication:
1.
2.
3.
4.
5.
6.

Steps in the process of generation

and communication of information:
Origination:
Input:
Processing:
Storing:
Copies of documents
Data retrieval:
and
reports
are
prepared
as
an
Production of documents:
output
of
the
7. Data communication:
information system.
1.
2.
3.
4.
5.
6.

Steps in the process of generation

and communication of information:
Origination:
Input:
Processing:
Storing:
Data retrieval:
Production of documents:
On-line transmission of
is possible in
7. Data communication:information
electronic data
1.
2.
3.
4.
5.
6.

processing system.

Quality and Value of

information
The

quality and value of information

can be described as how it
contributes for effective decision
making.
The quality of information is high, if it
creates managerial impact leading to
attention, decision and action.

Quality and Value of information

(Contd)
Value of Information:
Timeliness
Presentation
Accuracy
Context
Expectation

Quality and Value of information

(Contd)
The quality of information can be
measured on the four dimensions:
utility,
satisfaction,
error,
bias.

Quality and Value of information

(Contd)
1)The utility Dimension: The

utility dimension has four components namely

the form, the time, the access and the procession.
If the information is presented in the form of
manager requires, then its utility increases.
If it is available(time) when needed, the utility is
optimized.
If the information is easily and quickly accessible
through the online access system, its utility gets an
additional boost.
If the information is processed by the manager who
needs it, then its utility is the highest.

Quality and Value of information

(Contd)
2)Satisfaction Dimension: The

degree of satisfaction would

determine the quality of the information.
If the organization has a high degree of
satisfaction, then one can be safe in
saying that information systems are
designed properly to meet the information
needs of the managers at all the levels.

Quality and Value of information

(Contd)
3)Error Dimension:The error creep in on account of various reasons, namely:
An incorrect data measurement
An incorrect collection method.
Failure to follow the prescribed data processing procedure.
Loss of data or incomplete data.
Poor application of data validation and control systems.
A deliberate falsification.
The data should be avoided of errors, care should be
taken that the information is processed after ensuring the
correctness of the data in terms of time and the number
of document, and the transactions in the period.

Quality and Value of information

(Contd)
4. Bias Dimension: The procedure of communicating the
information should be such that the
system is able to detect the degree
and the nature of the bias and
correct the information accordingly.

Information overload

Information
overload(Contd)
It

is a situation where a manager is

given too much information and as a
result his is confused and cannot
make optimal decisions.

Information
overload(Contd.)
Refers

to the difficulty a person can have

understanding an issue and making
decisions that can be caused by the
presence of too much information.
Information overload occurs when the
amount of input to a system exceeds its
processing capacity.
information overload is simply the inability
for a person or entity to digest and apply
all of the information provided to them.

Information
overload(Contd.)
Stressinduced

byreceptionof moreinformationthan
is necessary to make adecision and
byattemptstodealwith it outdatedtime
managementpractices.
information overload is a phenomenon of having so
much information that the very volume creates the
additional work of having to decide what is important,
rather than helping executives to solve problems and
make decisions.
Information overload is a fact of life for company
directors, senior managers, and all professionals.

Main reasons for information

overload.
Increasing

globalization
Diversification of business forces

General causes of information overload include:

rapidly increasing rate ofnew information.

Theease of duplication and transmissionof data
across the Internet
Anincrease in the available channelsof incoming
information (e.g. telephone,e-mail,instant messaging)
Large amounts ofhistorical informationto dig through
Contradictions and inaccuraciesin available
information
A lowsignal-to-noise ratio
Alack of a method for comparing and
processingdifferent kinds of information
The pieces of information are unrelated or do not have
any overall structure to reveal their relationships

Tips to solve information

overload problem:
Focus and specialize in one thing
Take Control
Follow only valuable sources
Unsubscribe from most of the
unwanted subscription
5. Organize the time
1.
2.
3.
4.

Techniques for managing

information overload.
The main important techniques are:1. Data summarizing
2. Message modification or filtering
3. Inferences
4. Message routing

SYSTEM
CONCEPTS..

SYSTEM CONCEPTS:
A

system is a group of interrelated

components, with a clearly defined
boundary, working toward the
attainment of a common goal by
accepting inputs and producing
outputs in an organized
transformation process.
Derived from Greek word 'Systema'.
Means an organised relationship
among functional units or

Definition:
A

system is an orderly grouping of

interdependent components linked
together according to a plan to
achieve a specific objective.
It can be defined as a set of
interacting entities with
interrelationships/interconnections
amongst each other forming an
integrated whole.

 A set of components that interact to accomplish

goals.
Systems can be viewed as process models in
terms of their inputs, outputs, processing, and
feedback/control mechanisms.

System Examples:
University an example
Inputs: students, faculty, textbooks
Processing mechanisms: teaching, research,
service
Output: graduates

SYSTEM

Input

Processing

Output

Basic Functions:
Input
Processing
Output

Characteristics of a
system
Have

a specific structure
Are a model of reality
Has a purpose
Have inputs and outputs.
Will have measures of performance
Has an environment

Types of Systems
1.
2.
3.
4.
5.
6.

Closed and Open system

Deterministic, Probabilistic and
Random systems
Human, Machine and Humanmachine system
Abstract and Concrete Systems
Adaptive and Non-adaptive systems
Simple and Complex Systems

FEED BACK
The

mechanism offeedbackhas a very

simple definition: "the return to the input of a
part of the output"
It is data about the performance of a system.
The information measuring the goals and
providing control to the system.
feedback generally as"information about the
gap between the actual level and the
reference level of a system parameter which
is used to alter the gap in some way",.
It provides a perfect regulatory mechanism.

mechanism offeedback

Types of feedback
Positive

feedback
Negative feedback

Positive feedback
positive

feedback is defined as a
positiveloop gainaround afeedback
loop.
positive feedback isin phase withthe
input, in the sense that it adds to make
the input larger.
Positive feedback tends to causesystem
instability.
positive feedback is also known as
regenerative feedback.

Negative Feedback
Negative

feedback is also known as

degenerative feedback.
Feedback that reduces the output of a
system.
Negative feedback tends to make a
systemself-regulating; it can
producestabilityand reduce the effect
of fluctuations.

Negative Feedback
Control
Negative

feedback control is system

means keeping the system operating
within certain limit of performance.

Input, Process and Output

Control
Input

Process

Storage

Feedback

Output

Law of requisite variety

Law

of requisite variety is one of the

basic notation of system control
theory, to obtain control.
This has various rigorous
formulations, but a commonsense,
understanding is that to control each
possible state of system elements.

 This

means also that the control for

the system must be able to
determine of variables and send
system change instructions for each
change. The Law of requisite variety
needs that for a system to be
control, every controller
(human/machine) must be provided
with enough control responses (what
to do in each case) to cover all

 The

law of requisite variety means that for a system to

be controlled, every controller(human and machine)
must be provided with:-
1. Enough control responses (what to do in each case)
to cover all possible conditions the system may face.
2. The decision rules for generating all possible control
responses OR
3. The authority to become a self organizing
system in order to generate control responses.

Enumerating all responses is possible in simple cases.

In complex systems providing control responses is very
difficult.

End of 1st module

References:
1. Introduction to information systemsOBrien
2. MIS- OBrien, Marakas, Behl (ninth
edition)
3. Mis- Mcgraw hill Publication
4. MIS- Nirmalya Bagchi
5. Websites

1 Internal of first
module
st

Date: