Management Information System Unit -I

1. Management Information SystemUnit -I By :- Prof. Gajendra Pawar

2. Management Information System Management Information System MIS Management Information System

3. Management The activity of getting things done with the help of people & resources. Effective utilization of resources to achieve defined objectives with maximum efficiency. The process of setting and achieving goals through the execution of basic management functions: planning, organizing, staffing, directing, coordinating and controlling; that utilize human, financial, and material resources. Management means to get the things done in the right way by the right people at the right time or in other word Management is a process where the human beings gather in an environment to achieve the common goals effectively and efficiently

4. Information Processed data is information The meaning that a human assigns to data by means of the known conventions used in their representation

5. System Definition: A collection of components that work together to realize some objective forms a system. A system is an organized, interacting, interdependent and integrated set of components.

6. Major components in every system • Input • Processor • Output • Feedback • Control

7. CONTROL PROCESSOR INPUT OUTPUT FEED BACK

8. FEEDBACK MECHANISM Feedback Mechanism: The mechanism, which provides a signal to the system, about the quality of performance, favourable or adverse. Feedback Positive Positive Negative

9. FEED BACK MECHANISM Sensor: the device that measures the output. Comparison unit: Compares the output with the standard. If the measured output compares well with the standard, the system provides a feedback to continue the operation. Otherwise a feedback is provided to the system to stop the operation. Corrective unit: An in-built mechanism which will decide, based on the feedback to stop, regulate or continue the system operations. It will act on inputs and processes to bring the system under control. Control: the process of measuring the output, comparing with the standard, sending the signal to the corrective unit and the corrective unit acting upon it.

10. How Feed back control works? Input Process Output COMPARE samples Standards Leave the process alone Does not confirm to standards Confirms to standards

11. Model of a Business System CONTROL Policies Plans Standards INPUT PROCESSOR OUTPUT Organization Men Materials Machines Facilities Information Product Services Profit/ Loss Feed Back

12. SYSTEM Definition System is defined as a set of elements arranged in an orderly manner to accomplish an objective. –Davis and Olson

13. SYSTEM (Example) Computer System Elements Input process & Output process, OS, Compliers, DBMS, etc. Common Objective To process the data and provide information. • Day to day examples of SYSTEM • Traffic System • Education System • Business System etc.

14. System Concept The features which define and delineate a system form its boundary. The system is inside the boundary and the environment is outside the boundary. A system is composed of subsystems The interconnections and interactions between the subsystems are the interfaces.

15. System

16. A System: A Black Box or General View Environment . . . . . . System Inputs Outputs Objectives . . . . . . Constraints

17. A System and its Subsystems System Boundary Environment System Interconnection Inputs Outputs Objectives Subsystems (components) Constraints

18. Characteristics • They have specific objectives The very existence & everything that the system does and everything that happens within the system is for the purpose of fulfilling the objective. When does a system perform satisfactorily? If the system achieves its objective it could be said to be performing satisfactorily. If not, it is termed a system malfunction.

19. Characteristics (contd.) 2. Systems are composed of elements and these elements can be systems within themselves Eg. Transport system: Subsystems: Road Transport System, Rail Transport System, Air Transport System, and Water Transport System. They posses the characteristics of a system

20. Characteristics (contd.) 3. Elements can be common to several systems at the same time A single element may be a part of several systems at the same time. Eg: Human Body Element –Skin is a part of the body’s defense system; it is part of the input system. Business system Element- Sales is a part of marketing system, also it is a part of the accounting system.

21. Characteristics (contd.) 4. Elements in a system are interrelated Eg: In a business system, marketing, finance, manufacturing etc are related to each other. They may work differently from each other and have different short-term goals, but they eventually have the same goal, which is to make the business profitable.

22. Characteristics (contd.) 5. Elements in a system are interdependent They depend on each other for various inputs and are responsible for directing their output to each other. 6. Systems have a defined structure The flow of materials, feedback mechanisms etc is possible because the interactions and interdependency work within a predefined structure.

23. Characteristics (contd.) 7. Systems react with the environment Almost all the systems have some form of reaction to the environment in which they function. This is called as the system behaviour. The behaviour may be in the inputs the system receives from the environment, the output it gives to the environment and the measures it takes to protect itself in threat from the environment. • All systems have a life cycle Life cycle denotes the birth, evolution, decay and death of a system. • All systems have boundaries Boundaries define the limits of the system. Interface • The interconnections and interactions between the subsystems are termed interfaces.

24. TYPES OF SYSTEMS Classification based on the output and degree of information exchange with the environment. Deterministic Vs Probabilistic • When the inputs, the process and the outputs are known with certainty the system is called Deterministic system. • It operates in a predictable manner i.e, you can predict the o/p with certainty. • Here, if one has a description of the state of the system at a certain point plus a description of operation, the next state of the system may be given exactly, without error. • When the output can be predicted in probabilistic terms the system is called a Probabilistic system. • Its behaviour is not predictable. Here, a certain degree of error is always attached to the prediction of what the system is doing.

25. Open Vs Closed • If a system has exchange of information, material or energy with the environment including random and undefined inputs then it is called Open system. • Eg: organizational system (marketing, communication, forecasting) and biological system. • They tend to have form and structure to allow them to adapt changes in their environment in such a way as to continue their existence. They have ‘self organizing’ ability i.e. to change their organization in response to changing conditions. • Generally, open systems are same as of probabilistic systems as they are complex in every aspect. Therefore they do considerable amount of checking and controlling of the system behaviour. • Eg: pricing system. • If a system does not have any change with the environment nor is it influenced by the environmental changes then such a system is called as Closed system. • These systems are based on rules and principles.

26. Human–Machine Systems (User-machine systems) Information systems are generally human- machine systems in that both perform some of the activities in the accomplishment of a goal. The machine elements are relatively closed and deterministic, whereas the human elements of the system are open and probabilistic. Various combinations of human and machine are possible.  

27. Information System An information system is an arrangement of components that interact to support the operations, management and decision making information needs of an organization.

28. Resources of IS • Resources of People • Hardware • Software • Data • Networks

29. IS Activities • Input of data resources • Processing of data into information • Output of information product • Storage of data resources • Control of system performance • Information quality

30. Types of Information System Operation Support System Management Support System • MIS • DSS • ESS/EIS • Transaction Processing System • Process Control System • Enterprise Collaboration System

31. Employee Corporate Database of internal data Database of external data Corporate Intranet ESS Databases of valid transactions Application Databases Business Transactions TPS MIS DSS Operational Databases ES Scheduled reports Input & error list

32. MIS (Management Information System) The system, which makes available the right information to the right person, • at the right place, at the right time, in the right form and at the right cost.

33. Definitions: MIS Davis & Olson: MIS is an integrated user-machine system for providing information to support operations, management and decision making functions in an organization. The system utilizes computer hardware and software, manual procedures/models for analysis, planning, control and decision making and a database. Kelly: Acombination of human and computer based resources which result in collection, storage, retrieval, communication and use of data for the purpose of efficient management of operations and for Business Planning.

34. Definitions (contd.) According to Henry C. Lucas, “MIS is a set of organized procedures which when executed provide information to support decision-making”. Krober and Watson has defined MIS as “ an organized set of processes that provide information to managers to support the operation and decision making within an organization”.

35. All these definitions show that MIS is • A system • It combines human and computer based resources • It is meant to provide information to managers • This information enables managers to make timely and effective decisions • For this, it must be properly communicated In order to fulfill its functions, MIS uses • Computer hardware and software • Manual procedures • Decision models • Database

36. Need of MIS • MIS has become necessary due to the increased Business & Management complexities. • MIS enables processing of data from the organization and present it in a form of reports at regular intervals (data processing) • MIS is capable of presenting information in a form and format that it creates an impact on its user, provoking a decision, an action or an investigation. • MIS is capable of handling a need based exception reporting. • MIS is capable of keeping the data all together in such a form that it can be accessed by anybody and can be processed to suit his needs (concept of database) • MIS is capable of decision- making (quantitative & qualitative ) and helps to minimize risk. • MIS facilitates pro-active decision making.

37. Role of MIS in an Organisation • Support day-to-day business operations • Support managerial decision making • Supports strategic decision making & competitive advantage • Optimizing operational cost • Provide timely & accurate information • Provide expert advice to the mangers on selected domains

38. Role of MIS in an Organization • Provides information to all the levels of management for the following purpose • Define objectives of the organization • Formulate strategies & policies to achieve the objectives • To report organisation’s performance to tax authorities, share holders, regulatory authorities and other stake holders such as suppliers & customers etc • To prepare future plans on short & long term basis • To exercise day-to-day control on various operations in different functional areas • To allow management by exception

39. Features of MIS • Management –Oriented: provides information to all the management levels. • Subsystem • Integration • Common database • Information source & reporting format • More useful for structured decisions • Provide relevant information • Computerized

40. Limitations of MIS • It is not a substitution to managerial activities but a tool for management activities • It is customized • Like any other system, the quality of i/p governs the quality of the o/p. • It takes into account mainly quantitative factors, non quantitative factors like morale, attitude of the members of the organization, which have an important bearing on decision making process, is conveniently ignored. • Is less useful for making non programmed decisions • The effectiveness of MIS will diminish in organization where information sharing is not adopted as culture.

41. MIS : Objectives • Enhance communication among employees • Deliver complex material throughout the organization • Provide an objective system for recording & aggregating information • Reduce expense related to labour-intensive manual activities • Support the organization's strategic goals & direction

42. Computer for MIS • Conceptually MIS can exist with computer, but it is the power of Computer which makes MIS feasible. • Can produce periodic results • Comparing it with set target • Required representation of analysis All done in minimum time with minimum human involvement.

43. Advantages of using computer • Data access from several (remote) locations • Data security • Data confidentiality • Data storage • Fast computation • Integrates working of different Information subsystem • Better decision making • User friendly • More comprehensive information –complete wide ranging information

44. Environment Management Goal Setting P L A N N I N G ORGANI SING S T A F F I N G D I R E C T I N G C O O R D I N A T I N G C O N T R O L L I N G Information Support MIS MIS Support to Management Process

45. Impact of MIS • Management becomes more efficient. Tracking & monitoring of the functional targets becomes easy • Better understanding of the business itself. • Systemisation of business operations. • MIS goals pull the entire organisation in one direction towards the corporate goals and objectives. • Creates an information-based work culture in the organisation.

46. MIS as a federation of Sub-systems Marketing Logistics Finance & Accounting Top Mgmt Information Processing Production Personnel Strategic planning Mgmt Control Operational Control Transaction Processing Data Base Data Base Management System

47. Examples: MIS

48. MIS as a multi – disciplinary subject Monitoring &controlling organizational performance & initiating course-actions whenever/wherever required Data storage, processing, manipulation, retrieval etc. Mgmt Accounting Computer Science Explains the dynamics of decision making process Mgmt Science/Theory Operations Research MIS Use of mathematical & statistical techniques (for Model building, creating scenarios, forecasting): helps in decision-making Organizational Theory Behavioural Science Helps MIS professional to understand org, their types, cultures & behaviour.

49. MIS described as a pyramid structure Strategic planning Management control Operational control Transaction processing

50. Role of MIS in different levels • TP level • Capturing & processing of data about transactions (data processing) • OC level • Control over day-to-day operations going on. • MC level • Control over managerial task • SP level • Concentrates on future planning information