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INFORMATION SYSTEM An information system (IS) is any combination of information technology and people's activities using that technology

to support operations, management, and decision-making. In a very broad sense, the term information system is frequently used to refer to the interaction between people, algorithmic processes, data and technology INTRODUCTION TO MIS A management information system (MIS) is a system that provides information needed to manage organizations effectively. Management information systems involve three primary resources: technology, information, and people. It's important to recognize that while all three resources are key components when studying management information systems the most important resource is people. An 'MIS' is a planned system of the collection, processing, storage and dissemination of data in the form of information needed to carry out the management functions. In a way, it is a documented report of the activities that were planned and executed. According to Philip Kotler "A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers Management Information Systems (MIS), referred to as Information Management and Systems, is the discipline covering the application of people, technologies, and procedures collectively called information Systems, to solving business problems. 'MIS' is a planned system of collecting, storing and disseminating data in the form of information needed to carry out the functions of management. COMPONENTS OF MIS: The three components of MIS are: 1. Concept of Management 2. Information 3. Information system Management: Management is art of getting things done through and with the people in formally organized groups. The basic functions performed by a manager in an organization are: Planning, controlling, staffing, organizing, and directing. Information: Information is considered as valuable component of an organization. Information is data that is processed and is presented in a form which assists decision maker. Data Processing Information (Information Generation) System: A system is defined as a set of elements which are joined together to achieve a common objective. The elements are interrelated and interdependent. Thus every system is said to be composed of subsystems. A system has one or multiple inputs, these inputs are processed through a transformation process to convert these input(s) to output. These subsystems are interrelated through a process of Input - Throughput Output Input -Transformation Process- Output (A system) ELEMENTS TO MANAGEMENT INFORMATION SYSTEMS (MIS): Management information Systems (MIS) is the discipline covering the application of people, technologies, and procedures collectively called information systems to solving business problems. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making. There are many elements to Management Information Systems (MIS) which include: Data - The data input to the system must be as accurate as it can be, subject to its costs and timescales for capture. It should then be stored in the most logical way. This often differs from how the data is input. The data then needs to be summarized to create information in a way that best meets the needs of the systems users - this may not necessarily be the most logical way or the easiest or cheapest for the IT team. People - People are involved both in capturing the data and in exploiting the information. It is important to motivate those who capture the data by highlighting the value that the exploited data brings to the organization.

Hardware - In a small organization, the MIS may run on just the sales or finance directors PC. In larger businesses, it usually runs on a server, shared or dedicated, with Internet or intranet access for those who need it. It is unusual to require specialized software. Software - the simplest MIS can be built using standard software. However, most MIS use specialized software, which has the most common features of an MIS already built in. The developer configures this by describing the database and its structure, where the data comes from, how to summarize the data and what standard queries will be required. The cost of this software varies widely. The cheapest offers limited functions for one PC. The most expensive is highly functional, providing high performance and many features for hundreds or thousands of users and vast amounts of data.

OBJECTIVES OF MIS: Data Capturing: MIS capture data from various internal and external sources of organization. Data capturing may be manual or through computer terminals. Processing of Data: The captured data is processed to convert into required information. Processing of data is done by such activities as calculating, sorting, classifying, and summarizing. Storage of Information: MIS stores the processed or unprocessed data for future use. If any information is not immediately required, it is saved as an organization record, for later use. Retrieval of Information: MIS retrieves information from its stores as and when required by various users. Dissemination of Information: Information, which is a finished product of MIS, is disseminated to the users in the organization. It is periodic or online through computer terminal. CHARACTERISTICS OF MIS: Systems Approach: The information system follows a systems approach. Systems approach means taking a comprehensive view or a complete look at the interlocking sub-systems that operate within an organization. Management Oriented: Management oriented characteristic of MIS implies that the management actively directs the system development efforts. For planning of MIS, top-down approach should be followed. Top down approach suggests that the system development starts from the determination of managements needs and overall business objective. To ensure that the implementation of systems polices meet the specification of the system, continued review and participation of the manager is necessary. Need Based: MIS design should be as per the information needs of managers at different levels. Exception Based: MIS should be developed on the exception based also, which means that in an abnormal situation, there should be immediate reporting about the exceptional situation to the decision makers at the required level. Future Oriented: MIS should not merely provide past of historical information; rather it should provide information, on the basis of future projections on the actions to be initiated. Integrated: Integration is significant because of its ability to produce more meaningful information. Integration means taking a comprehensive view or looking at the complete picture of the interlocking subsystems that operate within the company. Common Data Flow: Common data flow includes avoiding duplication, combining similar functions and simplifying operations wherever possible. The development of common data flow is an economically sound and logical concept, but it must be viewed from a practical angle. Long Term Planning: MIS is developed over relatively long periods. A heavy element of planning should be involved. Sub System Concept: The MIS should be viewed as a single entity, but it must be broken down into digestible sub-systems which are more meaningful. Central database: In the MIS there should be common data base for whole system TYPES OF INFORMATION SYSTEMS:
1. 2. 3. 4. 5. Transaction processing system ( TPS ) Management Information System (MIS). Decision Support System (DSS). Executive Information System (EIS) Office Automation System (OAS)

1. TRANSACTION PROCESSING SYSTEMS The first type of information systems built were transaction processing systems (TPS), which are computer-based versions of manual processes used in organizations. Transaction processing systems automate the handling of transactions, which are individual simple events in the life of an organization. For example, in a sporting equipment store, a transaction occurs when a customer purchases a basketball. A record is made of each transaction that occurs. All of these records were originally kept on paper. In the early days of computerization, someone would later transfer the records to computer punched cards or to magnetic tape, so that the computer could then read and manipulate the data. Now, for medium- to large-size organizations, most transactions are captured in computer-readable form immediately at a point-of-sale terminal. When a transaction processing system processes an organization's transactions, each transaction is available for recall later. More importantly to the organization, the number and volume of transactions can be calculated for a given time period. For example, processing the number of sales per hour or per day at a sporting equipment store allows the store to more easily monitor inventory and thus more effectively manage inventory levels. Transactions also provide the official record of business activities, which drive other systems such as those which bill customers, pay vendors and employees, and reorder inventory or raw materials or stocked goods. Example: Airline reservation Systems, order entry/processing systems, banks account processing systems Objectives of TPS Process data generated by and about transactions Maintain a high degree of accuracy Ensure data and information integrity and accuracy Produce timely documents and reports Increase labour efficiency Help provide increased and enhanced service Help build and maintain customer loyalty Achieve competitive advantage COMPONENTS OF TPS DATA INPUTDATA PROCESSINGOUTPUT GENERATION

DATA STORAGE There are four components of a Transaction Processing System 1. Input- These are source documents such as customer orders, purchase orders etc. They help in, i).Capturing data. ii).Indicates what data is required for recording and what actions need to be taken. 2. Processing- It involves the use of journals and registers for chronological recording of data. Journals are used for financial accounting transactions and registers for other type of data. 3. Storage- The computer stores various records in files.Files are of two types, transaction file and master file. 4. Output- The outputs generated are in the form of documents such as trial balance, profit and loss account, balance sheet etc. 2. MANAGEMENT INFORMATION SYSTEMS Management information systems (MIS) are designed to take the relatively raw data available through a TPS and convert them into a summarized and aggregated form for managers, usually in a report format. Several types of reports can be produced. Summary reports present all activity over a given time period, geographic region, or other categorization in aggregate form. Exception reports only present information that is out of normal ranges. On-demand reports present anticipated summaries only when a manager wants or needs to check the status of activities. The precise contents of ondemand reports may change depending on the manager's immediate need. Ad hoc reports provide specific information as needed, the contents of which may change depending on the manager's needs. Ad hoc reports are unanticipated and may be one-time in nature.

3. DECISION SUPPORT SYSTEMS Decision support systems (DSS) are designed to help organizational decision makers make decisions. DSS usually have three major components: a database, a model base, and a dialogue module (Sprague, 1980), shows these components. The database contains data relevant to the decision to be made. The model base contains one or more models that can be used to analyze the decision situation. The dialogue module provides a way for the decision maker, usually a non-technical manager, to communicate with the DSS. By running the data and possible decisions through one or more models, the decision maker can compare possible solutions to the problem at hand. The DSS allows the manager to test or propose different solutions and see what the results may be before committing to any particular model. The first decision support systems were designed to support individual decision makers. When computing technology was more primitive and more difficult for non-technical people to use, an intermediary often used the DSS for the manager. The intermediary was usually a staff person who had the computer skills the manager lacked to work with the DSS. The manager would then use the output to help decide which course of action to take. Due to early technical limitations, each individual or specific DSS had to be designed and built one at a time. Now, many decision support systems run on microcomputers. The models are relatively easy to construct, change, and interpret using such software programs as electronic spreadsheets. Tools like spreadsheets and fourth-generation language (4GLs) are called DSS generators because they are general purpose tools that can be used to develop many specific DSS with relative ease. 4. EXECUTIVE SUPPORT SYSTEMS Another relatively new form of DSS is referred to as executive support systems (ESS) or executive information systems (EIS). Executive support systems are designed specifically for high-level executives who 1. may not have many computer skills 2. have very little time to devote to any given situation An ESS is relatively easy to manipulate and usually provides graphical presentations on several different pre-defined topics. Some executive support systems allow an executive to drill down into the data to a deeper, more specific level. For example, an executive who sees that sales have decreased for the month in the North American market may want to find out which segments of the market are doing best. The executive would then ask for the same information by segment and, seeing that the Western U.S. segment had the best performance, the executive may then want to see which subregion had the best performance. Once the information is presented at this level, the executive would see that Southern California had done the best. The executive may then want to examine the information by city, and so on. EXPERT SYSTEMS Different from any of the other classes of systems we have discussed so far, expert systems (ES) attempt to codify and manipulate knowledge rather than information. By knowledge, we mean understanding acquired through experience, deep and extensive learning. Expert systems are based on principles of artificial intelligence research. Artificial intelligence is the branch of computer science devoted to creating intelligence with machines. Typically users communicate with an ES through a dialogue during which the ES asks questions and the user supplies the answers. The answers are then used to determine which rules apply and the ES finishes with a recommendation based on its rules. One of the most difficult parts in building an ES is acquiring the knowledge of the expert in the particular problem domain. Specially trained people called knowledge engineers perform this knowledge acquisition. Knowledge engineers are similar to systems analysts; however, they are trained to use different techniques, as determining knowledge is considered more difficult than determining data.

5. SCIENTIFIC AND OFFICE INFORMATION SYSTEMS Although we are concerned in this book primarily with the types of information systems used in the administration of organizations, for completeness we should also mention some other types of information systems. We will not describe how such systems are developed, however, as an understanding of this type of systems development requires skills beyond the scope of the book. One broad classification of systems is based on scientific and engineering computing. These systems support engineers in the design of new products or improvement of older ones. Their computer support might require computer simulations or analytical models of physics or chemistry properties. Computer-aided design (CAD) systems allow engineers to create graphic simulations of the products they design. Engineers can then manipulate and observe these simulations, allowing the engineers to see what a product will look like and how the produce will react without having to build the product first. Related to CAD are computer-aided manufacturing (CAM) systems. These systems help automate and control the manufacturing process in factories. Scientific computing allows scientists in many fields to simulate everything from molecular movements to global weather patterns, providing an understanding that would otherwise either not be possible or be cost-prohibitive. Another class of systems consists of office automation systems. The term office automation promises more than the term delivers, as the term conjures up images of offices organized and run like automated factories. Office automation systems are usually quite basic and include such tools as word processing and accounting information systems. Integrated office systems that include electronic mail, calendaring features, and reminder files in addition to word processing are also available. Electronic mail (e-mail) allows office workers to send each other messages and files directly from their computers and is usually more convenient than trying to reach someone by telephone. Calendaring features allow office workers to coordinate their schedules, to reserve conference rooms, and to schedule meetings. Reminder files provide a means for conveniently reminding ourselves of meetings and other commitments. Office systems are rarely if ever developed in-house, but instead are purchased or leased from hardware or software producers. MODEL OF MIS FOR FINANCIAL SERVICE COMPANY

ORGANIZATIONAL NEED FOR MIS IN A COMPANY To facilitate the management decision making at all levels of company, the MIS must be integrated. MIS units are company wide. MIS is available for the Top management. The top management of company should play an active role in designing, modifying and maintenance of the total organization wide management information system. Information system and Information technology have become a vital component of any successful business and are regarded as major functional areas just like any other functional area of a business organization like marketing, finance, production and HR. Thus it is important to understand the area of information system just like any other functional area in the business. MIS is important because all businesses have a need for information about the tasks which are to be performed. Information and technology is used as a tool for solving problems and providing opportunities for increasing productivity and quality.
Information has always been important but it has never been so available, so current and so overwhelming. Efforts have been made for collection and retrieval of information, however, challenges still remain in the selection analysis and interpretation of the information that will further improve decision making and productivity.

MIS FOR A BUSINESS ORGANIZATION: Support the Business Process: Treats inputs as a request from the customer and outputs as services to customer. Supports current operations and use the system to influence further way of working. Support Operation of a Business Organization: MIS supports operations of a business organization by giving timely information, maintenance and enhancement which provides flexibility in the operation of organizations. To Support Decision Making: MIS supports the decision making by employee in their daily operations. MIS also supports managers in decision making to meet the goals and objectives of the organization. Different mathematical models and IT tools are used for the purpose evolving strategies to meet competitive needs. Strategies for an Organization: Today each business is running in a competitive market. MIS supports the organization to evolve appropriate strategies for the business to assent in a competitive environment. ESSENTIAL REQUIREMENT OF AN EFFECTIVE MIS: (i) Qualified System and Management Staff: The prerequisite of an effective MIS is that it should be managed by qualified officers. These officers should have a mutual understanding about the roles and responsibilities of each other. Understand clearly the view of their fellow officers. For this, each organization should have two categories of officers: (A) System and Computer Experts who in addition to their expertise in their subject area, they should also be capable of understanding management concepts to facilitate the understanding of problems asked by concern. They should also be clear about the process of decision making and information requirements for planning. (b) Management experts who should also understand quite-clearly the concepts and operations of a computer. This basic knowledge of computer will be useful will place them in a comfortable position, while working with systems, technicians in designing or other wise, of the information system. (ii) Futuristic Perspective: An effective MIS should be capable of meeting the future requirements of its executives as well. This capability can be achieved by regular monitoring and updating the MIS. (iii) Support of Top Management: For a management information system to be effective, it must receive the full support of top management. The Reasons for this are: (a) Subordinate managers are usually lethargic about activities which do not receive the support of their superiors. (b) The resources involved in computer based information system are larger and are growing larger and larger in view of importance gained by management information system. (iv) Common Database: It is an integrated collection of data and information which is utilized by several information subsystems of an organization. A common database may be defined as a super file which consolidates and integrates data records formerly stored in a separate data file. Such a database can be organized as an integrated collection of data records into a single super file or it can be organized as an integrated collection of several data file.
(v) Control and maintenance of MIS: Control of the MIS means the operation of the system as it was designed to operate. Some times, users develop their own procedures or short cut methods to use the system which reduces its effectiveness.

ROLE OF MIS
A management information system is a system that has important tools to support, analyze, deliver and add reliability to any organization. It ensures that appropriate data is collected from various sources, processed and sent to needy destinations. Also this helps to solve businesses problems. The term MIS is often used to submit to a group of information management methods tied to the support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems. MIS stands for management information system. MIS is a mainframe or minicomputer-based system that provides predefined periodic reports on an organization's performance in formats tailored to the informational needs of different management levels: strategic, tactical, and operational. At its basic level, MIS monitors day-to-day activities and distributes information on those activities to middle management to support and enhance tactical decision-making. For example, MIS not only gives middle managers the information they need to make informed decisions on how to best organize resources to achieve their division's goals, but also reports on whether those goals are being met. At the most senior levels of management, MIS provides the information necessary to make informed strategic decisions. Upper management uses MIS output to evaluate performance, manage resources, comply with regulatory requirements, and manage risk including assessing the effectiveness of existing risk management controls.

IMPACT OF MIS
MIS provides several advantages to the organization: Ability to link and enable employees: Electronic communication increases the overall amount of communication within a firm. The most important aspect is that people from the various units of a corporation can interact with each other and thus horizontal communication is promoted. All the obvious advantages of quicker information availability is the outcome of this function of IT but it must also be remembered that too much electronic communication leads to increased alienation of employees due to increased impersonality. Increases boundary spanning: An individual can access any information in any part of the organization with the aid of the appropriate technology. This eliminates the need for the repetition of information and thus promotes non-redundancy. If information provided is adequate, one can deal with factors like business risk and uncertainties effectively. Ability to store and retrieve information at any instance: means that the organization does not have to rely solely on the fallibility of human error, which is subject to error and erosion. Information can be stored, retrieved and communicated far more easily and effectively. The information support improves the lack of knowledge, enriches experience and improves analytical ability leading to better business judgment. It helps managers to act decisively. Helps in forecasting and long term planning: A disciplined IS creates a structured database and knowledge base for all people in the organization. The information available in such a form that it can be used either straight away or using blending and analysis thereby saving managers valuable time.

Disadvantage of MIS: However, IT can often lead to information overload, meaning that managers have to sift through an insurmountable amount of stored data and thus hindering timely decision-making. This problem is not as serious as first thought, though. Information overload is not an IT problem but more of a documentation problem. Furthermore, management tends to adapt to IT problems once it gets used to the idea of the new technologies. Inaccurate reporting can lead to flawed decision-making and planning. MIS typically extracts data from many different financial and transaction systems running on various computer platforms, which can often lead to inaccurate and inconsistent reports unless appropriate control procedures are in place. Even if the information is accurate, the predefined reports generated by MIS may not always anticipate the information needs of individual managers at all times; or the correct information is not available when needed, or is simply hard to access. Because of these deficiencies in MIS, managers are increasingly turning to interactive decision support systems to obtain the information they need for planning and control.

Process of management
Management in all business and human organization activity is simply the act of getting people together to accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Re-sourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management can also refer to the person or people who perform the act(s) of management. The various decisions in management are: Steps in Management Decision Planning A selection from various alternatives- strategies, resources and methods etc. Organizing A selection of combination out of various combinations of the goals, resources, method and authority. Staffing Providing proper man power complement. Directing Choosing a method of directing the efforts in the organization for the accomplishment of the goals Coordinating and controlling Coordinating the efforts for optimum results and selection of exceptional conditions and decision guidelines.

CHARACTERISTICS OF COMPUTERIZED MIS: (i) Ability to process data into information with accuracy and high speed. It involves complex computation, analysis, comparisons and summarization. (ii) Organizing and updating of huge amount of raw data of related and unrelated nature, derived from internal and external sources at different periods of time. (iii) The information processing and computer technology have been so advanced that managers are able to obtain real time information about ongoing activities and events without any waiting period. (iv) The input data in computer can be converted into different output formats for a variety of purpose. The system is so organized that managers at different levels and in different activity units are in a position to obtain information in whatever form they want, provided that relevant programmers or instructions have been designed for the purpose. (v) Super-human memory, tremendous volume of data and information and the set of instructions can be stored in the computer and can be retrieved as and when needed. Management can get bit of stored information from the computer in seconds. Advantages of Computer: The usage of computer gives following advantages in comparison to manual MIS: a) Speed: The speed of carrying out the given instructions logically and numerically is incomparable between computers and human beings. A computer can perform and give instructions in less than a millionth of second b) Accuracy: Computer can calculate very accurately without any errors. c) Reliability: The information stored in the computer is in digital format. The information can be stored for a long time and have long life. A user may feel comfortable and be rely on, while using information stored in computer. d) Storage: Computer can store huge data for a long time in comparison to human brain. e) Automaticity: Computers perform automatically in user friendly and menu driven program. f) Repetitiveness: Computer can be used repetitively to process information without any mental fatigue as in case of human brain. g) Diligence: A computer is an electronic device. It does not suffer from the human traits of lack of concentration. h) No Feeling: Computers are devoid of any emotions. They have no feelings and no instincts because they are machines. Limitations of Computer: a) Lack of Common Sense: Computer is only an electronic device. It can not think. If we provide an incorrect data, it does not have a commonsense to question the correctness of the data. b) Memory without Brain: Computer can store data in its memory; however, if a wrong instruction is given to computer it does not have a brain to correct the wrong instruction.

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