CONCEPT AND

OVERVIEW OF MIS

FRAMEWORK OF MIS

Information and information processing – vital part of human beings, contribute heavily to the success or failure of their different activities.

It becomes more relevant in case of formal organizations where different individuals, different functions but interrelated.

The working of these interrelationship is possible only through exchange of information.

“MANAGEMENT” IN MIS

Different writers, different definitions

Basically of two types: Decision oriented

definitions and Function-oriented definition

Management process in terms of decision making

Peter Drucker: Life of manager is a perpetual decision

making activity

Stanley: Management is simply the process of

decision making and control

“……..Management means decision making”

“MANAGEMENT” IN MIS …continued

Function-oriented definitions emphasis on

various functions performed by managers

Henry Fayol: To manage is to forecast and to

plan, to organize, to coordinate and to control.

Process involving planning, organising, staffing,

directing, and controlling

Basic features of Management

Organized Activities: Any organization want to progress towards the achievement of their objectives through coordinated efforts of people.

Existence of objectives: Basic criteria for existence for every human organization.

Relationship among Resources: Resources-Money, machine, Material and Manpower (people/employee), integration and efficient utilization of these resources to achieve the goal.

Basic features of Management …continued

Working with and through people: Proper integration of human resources which in turn utilise other resources. Sizeable proportion of management principles relates to how human being put for better efforts in the organisation.

Decision Making: Management involves decision making at various levels. Selecting the most appropriate alternatives. The success or failure of managers can be judged by the quality of decisions that they make. Ex. Indra Nooyi: Decision to merge Pepsi Cola Co. with

Frito Lay Inc. leading to formation of Pepsico.

“INFORMATION” IN MIS

Information is data that has been processed

into a form that is meaningful to the recipient

and is of real or perceived value in current or

prospective actions or decisions.

Relation of data to information:

Management

level Operation Level

Summarised

data Transaction

data

Information + decision

rules = managerial

decisions

Information + decision

rules = Operational

decisions

Characteristics of Useful

Information

An information may be termed as useful only when it

is able to stimulate desired actions from its recipient.

The desired action is one that lead to achievement

of organizational objectives.

Three major characteristics of useful information

are;

Timeliness: must be available on appropriate time

Adequacy: must be adequate to initiate desired action

Form: it should be made available in the form which suits

the recipients most.

“SYSTEM” IN MIS

A system is an interrelated set of elements

that function as a whole.

A system is composed of parts and subparts

in orderly arrangement according to some

scheme or plan.

CONCEPT OF MIS

Two types of problems emerge in defining MIS

1. MIS as a computer based information system (CBIS), while many include manual and CBIS in MIS. MIS is not new only computerisation is new.

2. MIS Scope: MIS is comprehensive, includes all the systems that provide information to managers irrespective of their levels.

While others say that MIS for lower and middle level and for higher level management it is DSS (Decision Support System)

Characteristics of MIS

Comprehensive

Integrated

Coordinated

Transformation of data into information

Relevant Information

Conformation with Managers’ Styles and

Characteristics

Selective sharing of Data

Feedback

Misconceptions about MIS

MIS is a computerized information system.

More data lead to effective decision making.

Managers know their information needs.

Managers do not have to understand how

MIS works.

Limitations of MIS

Quality of output of MIS governed by quality of inputs and processes.

Emphasis quantitative aspects, ignores qualitative aspects such as attitudes, morale, feelings of employees etc.

May not have flexibility to quickly updates with changing requirements.

Limitation in tailor made information, hampering the effectiveness of managers

Limitations of MIS …continued

Culture of not sharing the information of an organization may hamper the MIS effectiveness

Frequent change in top management which brings its own style may also hamper MIS effectiveness.

MIS is just a tool in the hand of managers, it cannot altogether avoid judgemental decision making.

Also, a costly affair.

INFORMATION SYSTEM (IS)

CONTAINS INFORMATION ABOUT AN

ORGANISATION AND ITS SUROUNDING

ENVIRONMENT.

THREE BASIC ACTIVITIES – INPUT,

PROCESS, OUTPUT

ENVIRONMENTAL FACTORS, SUCH AS

CUSTOMERS, SUPPLIERS, COMPETITORS,

STAKEHOLDERS AND REGULATORY

AGENCIES, INTERACT WITH THE

ORGANISATION AND ITS IS.

Three Activities in an IS

Input

Captures or collects raw data from within the organization or

from its external environment.

Process

Convert raw input into a more meaningful form

Output

Transfer processed info to the people who will use it or to

the activities for which it will be used.

Feedback

Returned to appropriate members of the organization to

help them evaluate or correct input stage.

Input Processing

Classify, arrange & calculate

Output

FEEDBACK

SUPPLIER CUSTOMER

ORGANISATION

REGULATORY

AGENCIES

STAKEHOLDERS COMPETITORS

ENVIRONMENT

INFORMATION SYSTEM

TOYOTA’S Vehicle Orders Mgmt. System

Raw Input:

Consumer order data including the dealer

identification number, model, colour, and optional

features of each car ordered.

Processing:

Toyota’s computers store this data and process it to

locate the models with options specified by the

customer that are either in inventory or under

production, to place orders to national distributors, to

consolidate the orders, and then transmit them to

factories.

Toyota’s production system then tell its factories how

many vehicles to manufacture for each model, colour

& option package,

How much bill for each vehicle, and where to ship the

vehicles.

Output:

Shipping instructions, invoices, production reports

Feedback:

Meaningful information such as which models,

colours, & options are selling in which locations

The most popular models & colours, which dealers

sales most cars.

TOYOTA’S Vehicle Orders Mgmt. System

Dimensions of information

systems

Using IS effectively requires an understanding

Organizations

Managements

Technology

Organizations perspective

Key elements of an organization

Structure, business processes, and culture.

Structure

Different levels and specialists

Division of labor

Organization require many different kinds of skills and people

Knowledge workers

Data workers

Production and service workers

Business functions

Sales and marketing, manufacturing and production,

finance and accounting, human resources

(IS is created to support functions)

Organization coordinate work

Through a structured hierarchy

Authority and responsibility

Through its business processes

Formal rules for accomplishing tasks

ex. invoice, customer complaints

(IS is created to support coordination)

Culture

Fundamental sets of assumptions, values, ways of

doing things

Accepted by most of its members

Organizational politics

Different levels and specialists create different

interests and points of view

Management perspective

Management’s job

Make sense out of many situations faced by

organization

Make decisions

Formulate action plans to solve organizational

problems

Set the organizational strategy

Allocate the human and financial resources

Exercise responsible leadership

Create new products and services

Re-create the organizations

Information & information systems play powerful role

Technology perspective

Computer hardware

Software

Storage technology

Communication technology

Network

Internet

Elastic

Network can be added or removed freely

Failures occur in parts of system, the rest will continue to

operate

Technology perspective

New “Universal” technology platform

Foundation of new products, services, strategy, and

business model

Intranet: internal corporate network based on Internet

technology

Extranet: private intranet extended to authorized users

outside the organization

World wide web (W W W)

Internet service

Universal standard for storing, retrieving, formatting, and

displaying info

Business perspective on Info

Systems

Important instruments for creating values

Real economic value

Increase in productivity

Increase in revenue

Superior long-term strategic positioning

“Costs of doing business”

Governmental regulations

Environmental demands

Required to stay in business

Business perspective on Info

Systems

Information Value Chain

Raw info

Systematically acquired

Transformed through various stages

Add value to that information

Better management decision

More efficient business process

Higher firm profitability

From a business perspective, information systems

are part of a series of value-adding activities for

acquiring, transforming and distributing

information that managers can use to improve

decision making, enhance organizational

performance, and ultimately increase firm

profitability

Information Value Chain

Toyota’s Vehicle Order

Management System

Solves the business challenge presented by

fierce competition and rapidly changing consumer

preferences.

Creates value for Toyota by making its ordering

and production processes more efficient and

effective.