management information system

Abstract This document starts off with the introduction to basics concepts of MIS. We also discuss on the evolution and significance of information systems. We shall try to understand the components and types of information systems.

Balakrishnan Unny Raghavan 3/20/2014

MBA Batch 11

Management Information systems Lecture notes for module I

Management Information systems 2014

CONTENTS

Why should I learn about Management Information System (MIS)? ..................................................................... 3

Introduction ............................................................................................................................................................ 3

Data and information ......................................................................................................................................... 3

System ................................................................................................................................................................ 3

Information system ................................................................................................................................................ 3

Relevence of information system in an orgnaization ............................................................................................. 4

Components of IS ................................................................................................................................................... 5

Types of IS ............................................................................................................................................................... 5

Operational support systems ............................................................................................................................. 6

Management support systems ........................................................................................................................... 6

Specialist systems ............................................................................................................................................... 7

Additional reading .................................................................................................................................................. 7


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WHY SHOULD I LEARN ABOUT

MANAGEMENT INFORMATION SYSTEM

(MIS)?

Before we start to understand MIS, we need to

answer a thorny question.

“I am not planning for a career in IT, so why should

I study MIS?”

The answer to this question resides in the way

information is treated in the modern business

environment. Information is considered as a vital

resource for the existence of any organization.

Firms are going to great depths not only to collect

data, but also are trying to find new ways to utilize

the data / information. The study of MIS provides

the modern manager with a greater understanding

about the way in which the organizations manage

their information resource. Every part of the

organization is covered with Information Systems

that help the employees in their daily tasks. Hence

the study of information systems is vital for any

management student.

INTRODUCTION

Before we start the discussion on management

information systems, we need to understand few

terms.

DATA AND INFORMATION

In crude words data is defined as the collection

raw facts and figures and information is often

referred to as processed data. Extending this

definition information can be considered as data

that is transformed or modified for a specific

purpose. In an organization, data is transformed to

information for a specific objective which can be

simple or complex. Fundamentally information is

created from data to assist the employees perform

certain tasks.

SYSTEM

There is a conception among many that system

means a computer, however this is incorrect.

System can be defined as an organized, purposeful

structure that consists of interrelated and

interdependent components. Every system has

input transformation, output and feedback. The

input is transformed into the output and the

feedback from the output then controls the input.

Figure 1: Representation of a system

INFORMATION SYSTEM

Based on prior descriptions, let us try to

understand the term information system.

Information system can be defined as the

collection of people, processes and technology

that used to retrieve, transform and disseminate

information in an organization. The term

technology covers the hardware, software,

networks and data resources. In other words,

information system is not just a piece of software.

Organizations that are in the process of creating an

information system for retrieving, transforming

and disseminating information must decide on the

following.

For retrieval stage

1. What to collect?

2. Where the data should be collected from?

3. How should it be collected?

For transformation stage

1. What is the desired output?

2. How to modify the data?

3. Who is going to modify the data?

And for dissemination stage

1. Whom to share it with?

2. Do we need to protect information?

3. How do we share the information?

Though the technology may be a required at each

of the above stages, people and process also play a

pivotal role in the information system.


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RELEVENCE OF INFORMATION SYSTEM

IN AN ORGNAIZATION

As discussed information systems (IS) have

become a vital part of any organization regardless

to their size of nature of business. IS has the

following 3 major roles within an organization

1. Support business processes and

operations

2. Support decision making

3. Support strategies for competitive

advantage

Figure 2: Role of IS

The primary role of IS within an organization is to

support business processes and operations. Taking

the example of core banking system used in a

bank, the daily operations will come to a grinding

stop if this system where to fail. With the advent

of technology, many organizations have replaced

their manual systems with IS to achieve speed,

efficiency and accuracy.

Supporting decision making has been the natural

progression of IS, wherein advanced systems are

developed to assist the management in making

decisions that are based on information that is

timely, accurate and usable.

Lately IS has also donned the role of supporting

the competitive strategies of organizations. Firms

and developing IS systems to gain advantage over

its competitors. The finest example that comes to

mind is Dell, using its e-business system to gain

advantage over its rivals.

This evolution of IS can be understood by taking a

look at the following figure

Figure 3: Trends of IS

Based on trends of IS, it is futile to consider

thinking of IS projects as merely technology

projects. IS projects have moved into the realm of

business projects.

Now organizations are investing in IS for various

reasons which include the following

1. To achieve operational excellence

2. To introduce new products, services and

business models

3. To provide a better experience of their

customers and understand their needs

better

4. To improve their decision making

5. To create a competitive advantage

6. Survival; organizations late to adopt

technologies often find themselves in a

situation where in they are chasing their

rivals in order to keep their company

afloat

Thus information systems have become the

cornerstone for any business plan. To achieve any

advantage over their competitions, organizations

are turning to their information systems.


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COMPONENTS OF IS

Figure 4: Components of IS

The above diagram depicts the various

components of an information system. Starting

with inner core of an IS, we have the input,

processing and output of information. These are

critical components of any IS, as they are

responsible for collecting, transforming and

disseminating the information. The storage of

data resources is also vital, as the data /

information must be stored to ensure that it can

be utilized by the organization.

Another vital component is the control of the

system performance. Here is where the IS team of

an organization comes into picture. IS team is

responsible for controlling, monitoring and

management of the various technology assets

used for input, processing and output of

information resources. Controlling deals with

ensuring that the access to the technology assets

is provided to authorized members of the

organization. Monitoring deals with ensuring the

operational conditions of the technology assets,

which means the IS team must ensure that they

are available for use on a day-to-day basis.

Management deals with activities for governing

the technology assets. Thus the IS team are a vital

component of any information system.

For the IS to be completely operational, resources

are required. Without the resources the other

components will fail to function.

People Resources

IS Specialists- system analysts, s/w developers, system operators

End Users- anyone who use IS

Hardware Resources

Machines- computers, monitor, magnetic disk drivers, printers, scanners

Media- magnetic tape, optical disks, plastic cards, hard copies

Software resources

Programs,

Procedures- data entry procedure, error correction procedure, functionality

Data Resources

Product descriptions, customer records, employee files, inventory DB

Network Resources

Communication media, processors, network access & control s/w

Information Products

Management reports, biz docs, graphical display, printed reports

Table 1: Resources of IS

All the above mentioned components have to

function together in unison for the smooth

functioning of the IS.

TYPES OF IS

IS systems are broadly classified on the basis of

their use into the following 3 major categories.

Figure 5: Type of IS

Operational support systems

Supports the business

operations

Management support systems

Supports that decision

making of management

Specialist systems

Specialized use


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OPERATIONAL SUPPORT SYSTEMS

Operational support systems (OSS) as the name

suggests assist the employees of an organizations

to execute the day to day activities such as;

1. Process business transactions

2. Control business processes

3. Support collaboration and communication

The OSS can be broadly classified into the

following categories.

Figure 6: Types of OSS

The transaction processing systems record and

process the business transactions of an

organization. Business transactions may be

anything from a simple sales transaction to

complex transactions that involve multiple

entities. Examples of transaction processing

systems are sales processing, inventory systems

and accounting systems.

Process control systems control and monitor the

business processes. The business processes may

include people, machines and detailed process.

The current business environment is built on

collaborative working. There are no more

individual projects, employees have to work

together to achieve successes. Enterprise

collaboration systems help team and workgroup

communicate better. Email, video conferencing

can be considered as collaboration system.

MANAGEMENT SUPPORT SYSTEMS

The modern day managers have to make decisions

that may profoundly affect the organizations and

managers are looking at the information systems

that can assist them.

Management Support Systems provide

information and support for effective decision

making by managers. The management support

systems are broadly classified into the following.

Figure 7: Types of MSS

Management information systems provide the

information support to management. The Reports

and Displays assist the managers to gain an

understanding of the current state of the

organization.

Decision support systems provide the Interactive

and ad hoc support to the management to take

effective decisions. Modern day DSS have the

capability to interpret the information based on

predefined business rules.

Executive information systems (EIS) are systems

that are designed to provide the executives with

relevant and timely information. Unlike the

management information systems the EIS are

designed to provide information not only about

the organization about but also provide

information from outside the organization.

OSS

Transaction processing

system

Process control system

Enterprise collaboration

system

MSS

Management information

system

Decision support system

Executive information

system


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SPECIALIST SYSTEMS

Expert Systems provide expert advice to the

management and they are designed to make

complex calculations. Modern day systems are

built to be intelligent and they can reason and

provide the information to the management.

Knowledge Management Systems support

creation, organization, & dissemination of business

knowledge throughout the organization.

Strategic Information Systems help get a strategic

advantage over customer.

Functional Business Systems focus on operational

and managerial applications of basic business

functions.

ADDITIONAL READING

1. Chapter 1 and 2- Management

Information systems, James A O’Brien and

George M Marakas.

2. Chapter 1 and 2 - Efraim Turban, Dorothy Leidner, Ephraim McLean and James Wetherbe, Information Technology for Management - Transforming Organizations in the Digital Economy.

Specialist system

Expert systems

Knowledge Management

Systems

Strategic Information

Systems

Functional Business Systems

management information system

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