Management Information System

A Technical Paper Presentation on

Management Information System

Submitted by, Mr. Tushar Bhagwan Kute, Lecturer in Information Technology, K. K. Wagh Polytechnic, Nashik, Maharashtra.

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Abstract As Alvin Toffler has said, an information bomb is exploding in our midst showering us with shrapnel of images and drastically changing the way each of us perceives and acts upon our private world. In shifting from a second wave to third wave info-sphere, we are transforming our own psyches. In last two decades Information technology has emerged in the world affecting our personal and social life and has made significant impact on the quality of life. It handles the data and information represented in digital, text, images, graphics or voice media and deals with communication storage, processing and printing or exhibition in the manner and kind as desired by users. It has replaced old outdated slow methods by fast ones. It has also affected the work culture in organization and life style of each individual. Information, is therefore is considered as the fifth, productive resource along with men, machines, material and money. It can be developed only by designing proper information systems for the management of organization. This paper has presented all these aspects of information system and its managerial functions in the view all types of organizations.

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Introduction The wikipedia encyclopedia has defined the Management Information System as– the subset of the overall internal controls of a business covering the application of people, documents, technologies, and procedures by management accountants to solving business problems such as costing a product, service or a business-wide strategy. In my view, a Management Information System is a system or process that provides the information necessary to manage an organization effectively. MIS and the information it generates, are generally considered essential components of prudent and reasonable business decisions. MIS is also popularly known as the Information System, the Information and Decision System, the Computer-based Information System.

Role of Management Information System Role of MIS in organization can be compared with the role of heart in the body. It plays following important roles in the organization. •

It ensures the appropriate data id collected from the various sources, proceeds and sent further to all needy destinations.

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It helps in Strategic Planning, Modeling Systems, Decision Support Systems, Management Control, Operational Control and Transaction Processing etc.

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It helps junior management personnel by providing the operational data for planning, scheduling and control and helps them further in decision-making at the operational level to correct and out of control situation.

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It helps the top management in goal setting, strategic planning and evolving the business plans and their implementation.

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It plays the role of information generation, communication, problem identification and helps in the process of decision-making.

Impact of Management Information System With a good MIS support the management of marketing, finance, production and personnel becomes more efficient. The tracking monitoring of the functional targets becomes easy. Since Management Information System uses a dictionary, there is a common understanding of terms and terminology in the organization bringing clarity in the communication and similar understanding of an event in the organization. It calls for a

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systemization of the business operation for an effective system design. That is it helps indirectly to pull the entire organization in one direction towards the corporate goals and objectives by providing the relevant information to the people in the organization. The MIS has a direct impact on many overheads in the organization. It creates an information-based work culture in the organization.

Management Control System The steps of planning, organizing, staffing, coordinating, directing, controlling are prior to control are necessary but are not necessarily assuring the result unless it is controlled by strong controlled mechanism named as ‘Management Control System’. It is viewed in the figure 1 below:

Establish Standards of Performance

Measure Performance

Not OK Actual vs. STD

Corrective Action

OK

No Action

Figure- 1 Management Control System The reliable and effective control system has following features: •

Early Warming Mechanism

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Performance Standard

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Strategic Controls

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Feedback

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Accurate and Timely

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Realistic

•

Exception Principle

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Management and Management Information System The MIS has a strong support to the management as illustrated in the figure 2 below: Environment

Management

Goal Setting

Planning

Organizing

Staffing

Directing

Controlling

Information Support

MIS Figure- 2 MIS Support for the Management Process

Information System Framework The field of information system encompasses many complex technologies, abstract behavioral concepts and specialized applications in several business and non-business areas. The figure 3 below illustrates a useful conceptual framework that organizes the knowledge presented and outlines what we need to know about information systems. It emphasizes that we should concentrate our efforts in the following five areas of IS knowledge: •

Foundation Concepts

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Information Technologies

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Business Applications

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Development Processes

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Management Challenges

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Figure 3 the Information Systems framework

Management Challenges in E-Business Enterprise Today most of the business organizations are using internet technology, network and wireless technology for improving the business performance measured in terms of cost, efficiency, competitiveness and profitability. They are using e-commerce and e-business solutions. But the actual challenges to be faced are convoluted using the process of Management Information Systems.

•IS Human Resources •IS Development •IT Infrastructure •IS Performance

•Business Strategies •Business Processes •Business Needs •Customer Relationships •Business Partners •Suppliers B

•Organization Structure •and Culture •User Acceptance

i

C

Ethical Considerations Potential Risks? Potential Laws? Possible Responses?

Figure- 4 Challenges in E-Business enterprises

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Competing with Information Technology Information systems can play several strategic roles in business. The Internet, intranets, extranets, and other Internet-based technologies can be used strategically for EBusiness and E-Commerce that provide a competitive advantage. A key strategic use of Internet technologies is to build an E-Business which develops its business value by making customer value its strategic focus. IT is a key ingredient in reengineering business operations, by enabling radical changes to business processes that dramatically improve their efficiency and effectiveness. IT can be strategically used to improve the quality of business performance. A business can use IT to help it become an agile company that can respond quickly to changes in its environment. Solution Knowledge

Technical Support Staff

Development Engineers

Customers Intranet The Internet

Product Managers

Other Vendors

Figure- 5Knowledge Management Systems in IT

Electronic Business Systems The E-Business Application Architecture reflects the key E-Business applications and their interrelationships. Cross-functional enterprise applications cross the boundaries of traditional business functions. These systems focus on supporting integrated clusters of business processes. Supply Chain Management relies on information technology and management practices to optimize information and product flows among the processes and business partners within the supply chain.

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Marketing

Production Operations

Human Resource Management

Functional Business Systems

Accounting

Finance

Figure- 6 Electronic Business Systems

E-Business Decision Support Decision support systems in business are changing.

The growths of corporate

intranets, extranets, and other web technologies have increased the demand for a variety of personalized, proactive, web-enabled analytical techniques to support DSS. Information systems must support a variety of management decision-making levels and decisions. These include the three levels of management activity: strategic, tactical, and operational. Online analytical processing is used to analyze complex relationships among large amounts of data stored in multidimensional databases. Data mining analyzes large stores of historical data contained in data warehouses. Decision support systems are interactive computer-based information systems that use DSS software and a model base to provide information to support semi-structured and unstructured decision making. Decision Characteristics Unstructured Decisions

Strategic Management Information

Semi-structured Tactical Management

Structured

Operational Management

Figure-7 Decision Support System

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Benefits of Management Information Systems The field of MIS can deliver a great many benefits to enterprises in every industry. Expert organizations such as the Institute of MIS along with peer reviewed journals such as MIS Quarterly continue to find and report new ways to use MIS to achieve business objectives.

Core Competencies Every market leading enterprise will have at least one core competency – that is, a function they perform better than their competition. By building an exceptional management information system into the enterprise it is possible to push out ahead of the competition. MIS systems provide the tools necessary to gain a better understanding of the market as well as a better understanding of the enterprise itself.

Enhance Supply Chain Management Improved reporting of business processes leads inevitably to a more streamlined production process. With better information on the production process comes the ability to improve the management of the supply chain, including everything from the sourcing of materials to the manufacturing and distribution of the finished product.

Quick Reflexes As a corollary to improved supply chain management comes an improved ability to react to changes in the market. Better MIS systems enable an enterprise to react more quickly to their environment, enabling them to push out ahead of the competition and produce a better service and a larger piece of the pie.

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Conclusion While computers cannot create business strategies by themselves they can assist management in understanding the effects of their strategies, and help enable effective decision-making. MIS systems can be used to transform data into information useful for decision making. Computers can provide financial statements and performance reports to assist in the planning, monitoring and implementation of strategy. MIS systems can provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually. Not only do MIS systems allow for the collation of vast amounts of business data, but they also provide a valuable time saving benefit to the workforce. Where in the past business information had to be manually processed for filing and analysis it can now be entered quickly and easily onto a computer by a data processor, allowing for faster decision making and quicker reflexes for the enterprise as a whole. While MIS systems are extremely useful in generating statistical reports and data analysis they can also be of use as a Management by Objectives (MBO) tool. MBO is a management process by which managers and subordinates agree upon a series of objectives for the subordinate to attempt to achieve within a set time frame. Objectives are set using the SMART ratio: that is, objectives should be Specific, Measurable, Agreed, Realistic and Time-Specific. In tracking this performance it can be extremely useful to make use of an MIS system. Since all SMART objectives are by definition measurable they can be tracked through the generation of management reports to be analyzed by decision-makers.

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References

Books 1. Management Information Systems, by James O’Brien and George Makaras, Tata McGraw Hill Publications, New Delhi, First Indian Edition, 2007. 2. Management Information Systems: text and cases, by Waman Jawadekar, Tata McGraw Hill Publications, New Delhi, Third Edition, 2008.

Papers 1. Management Information Systems, Comptroller’s Handbook, May 1995 by Comptroller of the Currency Administrator of National Banks, USA 2. O’Brien, J (1999). Management Information Systems – Managing Information Technology in the Inter-networked Enterprise. Boston: Irwin McGraw-Hill.

Websites 1. www.bestpricecomputers.co.uk 2. www.en.wikipedia.org

Compact Discs 1. Microsoft Encarta, 2006 Edition 2. Manorama Encyclopedia, 2008 Edition

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