INTRODUCTION

Management Information System plays a very important role in an organization. There is hardly a business magazine that dos not contain article about information system.

MIS can be defined as –

“A system which collects, processes, stores and distributes information to help in decision making for managerial functions.”

(Planning, staffing, directing, controlling, organizing and budgeting)

It may also be defined as Integrated user/ Machine system for providing information to support the decision making process. MIS is a computer based system, which presents both external and internal information of business. This system utilizes computer hardware and software, manual procedure for analysis, planning, control and decision making.These system do not take decisions but they assist in providing a necessary information as an input to the decision making process. MIS should provide information which is consistent, accurate, timely, economically flexible and relevant. MIS can be computerized or manual. MIS provides information in report format on regular basis to assist managers with decision which occur frequently and can be anticipated.

MANAGEMENT

Management has been defined in a variety of ways, but for our purpose it compromises the processes or activities that describes what managers do in the operation of their organization; plan, organize, initiative and control operations.

INFORMATION

Data must be distinguished from information. Data are facts and figures that are not currently being used in decision process.

Information consist of data that have been retrived, processed or otherwise used for informative or inference purposes, arguments, or as a basis for forecasting or decision making.

SYSTEMS

A system can be described simply as a set of elements joined together for a common objective. The system concept of mis is therefore one of the optimizing the output of the organization by connecting the operating sub-system through the medium of information exchange

PYRAMIDICAL STRUCTURE OF MIS

Lower level:-The bottom layer consists of information required for transaction processing and inquiry processing.

Operational level:- This layer has the information which is required for day to day performance of activities and their control.

Middle level:- This layer has the information which is useful for tactical planning and decision making to implement the policy of top management.

Top level:- This layer has information which is useful for strategies and policy planning.

CHARACTERISTICS OF MIS

The MIS plays a vital role in management, administrations and operations of an organization as it helps in information generation, communication, problem identification in the process of decision making.

The main features of MIS are:-

I) Management oriented:- The development of MIS starts after deciding the management needs and keeping in view overall objective of management.

II) Management directed:- A good MIS removes the lack of knowledge, enriches experience and improves analytical abilities leading to better business judgement.

III) Integrated system:- MIS binds together database of business system and through information interchange, integrates the organization. It also provides adequate development resources and removes the human and organizational barriers to progress.

IV) Avoid redundancy:- Since MIS is a integrated system, it avoids unnecessary inconsistency and redundancy in data gathering and storage.

V) Common data flow:-MIS provides common data flows, which try to utilize minimum data processing efforts and minimize the number of output document.

VI) Heavy planning element:- Designing and implementation of MIS require detailed and meticulous planning of activities like acquisition and utilization of resources.

VII) Common database:- MIS acts as a master that holds the functional sub-system together. It achieves this aim by allowing access to different master files of data to several functional sub-systems.

VIII) Flexibility:- MIS design should be flexible so as to provide alternate ways of processing data and system should be easy to operate so that not much of computers skills are required.

IX) Computerization:- MIS can be computerized because of its nature. This provide speed, accuracy and consistency in creating and access of files.

X) Relevance:- MIS should deal only with operation and control of relevant information.XI) Support to top management:- MIS cannot be effective unless they receive the full

support of top management. For this, top management should be educated about cost and benefits of MIS

XII) Periodic evaluation:- The last feature of MIS is that the system should be evaluated at periodic intervals to ensure that MIS is achieving the objective of which this has been installed.

COMPONENTS OF MIS

Management information system refers to the data, equipment and computers program that are used to develop information for managerial use. The MIS consists of following components which are as follows-

I) People:- People is only living component of MIS which operates and controls the other components of MIS. They enter, analyze and diagnose data, so that useful information is produced and provided to top executives for decision making.

II) Data process:- Data process uses different procedures, so that data can be properly analyzed and effective information is generated. Procedures explain people how to operate the computer hardware, what program to run, what data to use and what to do with the results.

III) Data communication:- There are different ways for communication of data. It may be informed orally or in the form of written report. Written forms are more appropriate than oral ones as it is permanent and systematic way of organizing information.

IV) Information:- Data are facts and figures that are not currently being used in decision process. Data is process by applying different procedures to obtain information. It may be recorded into computer, storage media or manual files and is retrived whenever required.

V) System planning:- We have achieved a very high degree of automation and combination sub-system in scientific, mechanical and factory manufacturing operation. The system concept of MIS is therefore of optimizing the output of the organization by connecting the operation sub-system, through the medium of information exchange.

VI) Hardware and Software:- The hardware generally consists of computer equipments, on the other hand software consists of programs or instructions given to the computer such as pay roll processing, invoices etc.

FUNCTIONS OF MIS

A MIS is used to collect data, store and process data and present information to managers.

I) Collect data:- Data can be obtained from source within and outside the organization. Internal sources such as records, reports and external sources such as publications, customers and consultancy.

II) Store and process data:- After creation of data, a database must be stored and processed in a form useful to managers. The data can be loaded into computers for easy access by user.

III) Present information to users:- After collection of data, storing and processing of data, the next step is to present the information to managers for their use.

USES/BENEFITS/ROLE OF MIS

I) MIS ensures that appropriate and relevant data is collected from various sources, processed and is sent further to needy destination.

II) It fulfills the needs of individual, group, management.III) MIS helps in strategic planning, management control, operational control and

transaction processing system.IV) MIS plays an important role in information generation, communication,

problem identification and decision making administration.V) With good MIS support marketing, finance, production and personnel

functions increases efficiency.VI) MIS creates structured database and therefore saves time.VII) MIS brings clarity in communication and understanding, thus helps in

bringing degree of professionalism.

INFORMATION

We breathe information, eat information, drink information, wake up with information, sleep with information etc. So information is as life blood of any organization, without information survival of any organization is not possible.

Information means “processing of data or analyses of data in a specific context to get required information”. It is a basis of decision making. The decision taken on basis of complete and accurate information is less risky.

The value of perfect information is calculated by finding out the difference between the optimal policy with and without perfect information.

Characteristics of an information

i) Accuracy:- accuracy means that information is free from mistakes and error and it accurately and clearly reflects the meaning of data from which it is derived. It conveys the accurate picture to receiver and is free from biasness.

ii) Timeliness :- information must be delivered at the right time and the right place to the right person otherwise information would be of little value to the organization. hence, making information available to the receiver within time is very crucial for every organization.

iii) Relevance :- information should be to the point and meaningful to the decision maker. Relevance of information for different users will be different.

iv) Correct information format :- information should be given to the user in such a form that it could be easily understood by user.

v) Completeness :-information is said to be complete if decision maker can satisfactory solve the problem at hand using that information. Incomplete information has no meaning for user.

vi) Subjectivity :- it is the value and usefulness of the information.vii) Accessibility :- information should be readily accessible in desired format when

needed. Technological advancement has made data accessibility easy.

Types Of Information System

I) TPS(Transaction Processing System) :- Most fundamental computer system which is concerned with processing of business is called TPS. The objective of TPS is to improve routine business activities on which functions of organization depends. The main work of TPS is to record and process the data resulting from business transactions. A transaction is an event or entity which affects the organization. Transaction processing could also be considered as a set of procedures for handling transactions and it includes activities like calculation, classification, storage and retrieval, sorting, validation, verification, summarization etc. These activities occur at operational level in nay organization. TPS produces a variety of information system for internal and external cause.

II) OAS(Office Automation System) :- OAS collects, processes, stores and transmits data and information in the form of electronic office communication. These automatic systems rely on text processing, telecommunication and offer information system technologies. Example- word processing, electronic mail, desktop publishing, telecommunication and document image processing. It enhances the abilities of users to communicate with their colleagues within their work groups and organization and with external contact such as customers and suppliers.

Advantages-

They provide more time to managers to concentrate on their basic jobs. They improve the quality of work in terms of content, throughness, timeliness and

accuracy. They speed up specific functions and thereby increases the quantity of clerical output. They reduce the time spent on input capture and creation. They co-ordinate and integrate office tasks. They enable more cost- effective and time- effective communications. They increase the productivity of office workers at all levels.

Disadvantages –

Cost of automated office hardware is very high. OAS can disrupt traditional office work roles and environment. OAS may lead to security problems.

III) EIS(Executive Information System):- The decision made by executives are mostly unstructured for which informational requirements are generally for processed and summarized data from variety of sources. Initially tip executive information system relies on non computer source. Top level executives get information whenever they require from many sources like letters, memos, periodicals and report produced manually as well as by computer system. Thus, with computer based EIS provides top management with immediate and easy access to selective information, which reduces the information overload on executives and help to achieve firm’s strategic objective.

IV) ES(Expert System):- Expert system aims at formalizing expertise and makes it available for repetitive types of business decisions. They use artificial intelligence tools to generate knowledge out of information. It helps human experts perform their jobs effectively and is important where expertise is scarce and is therefore expensive. The expert system has been developed for the purpose of expertise from those with the knowledge in a convenient and easily accessed manner. Expert systems are designed to replace the function formed by human experts. Expert system provide information to managers as expert advice.An expert system supports the intellectual work of professionals engaged in design, diagnosis or evaluation of complex situation requiring expert knowledge in a well- defined area.Advantages:-

Planning:- ES can make a valuable contribution to planning. It can use information from earlier project which can be used to improve subsequent plans.

Decision making:- ES can support decision making by storing information in its knowledge base from several experts rather than a single expert.

Monitoring:- ES can be used to monitor the process, activities of employees and cash management etc.

Diagnosis:- ES can be used in diagnosing different conditions. Ex- in diagnosing the reasons for manufacturing equipment, human diseases in medicine etc.

Training:- when an ES is being used as a regular nature in the course of work, users learn the way the system reaches destination.

Timely response:- ES are available on call at all the time and, can be used to provide immediate support and to perform task immediately.

Reliability:- they are reliable in the sense that they do not become tired or bored. They pay attention to all details and do not overlook any relevant information.

Disadvantages:-

Expert system are not problem solver. It may take longer time to solve problem than an expertise.

Expert system take long development time and are expensive.

Example of MIS : Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions. The various steps involved in the process are explained with the help of the following diagram.

Fig: Order Fulfillment Process

In this diagram order fulfillment process is explained . firstly the sales department generate an order of the product requirement by the customer then the order is submitted by the sales department for the further processing of order. The accounts department check credit limit of the customer , if ordered quantity of product is within the credit limit of the customer , the accounts department approve it and generates the invoice. After that the manufacturing and production department assembles th product and ships the product to the customer.

Design of MIS for Order Fulfillment ProcessIn the system illustrated by this diagram, three TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provides them with the appropriate reports