UNIT-II STRUCTURE OF MANAGEMENT INFORMATION SYSTEM

Management Information Systems (MIS) is the term given to the discipline focused on the integration of computer systems with the aims and objectives on an organisation.MIS is the study of people, technology, and organizations and the relationships among them. MIS professionals help firms realize maximum benefit from investment in personnel, equipment, and business processes. Its a peopleoriented field with an emphasis on service through technology. In a management information system, modern, computerized systems continuously gather relevant data, both from inside and outside an organization. This data is then processed, integrated, and stored in a centralized database (or data warehouse) where it is constantly updated and made available to all who have the authority to access it, in a form that suits their purpose. Scheduled reports- Produced periodically, or on a schedule (daily, weekly, monthly). Key-Indicator report- Summarizes the previous days critical activities- Typically available at the beginning of each day. Demand report- Gives certain information at a managers request.

Exception report- Automatically produced when a situation is unusual or requires management action. WHAT IS MIS? Data processing by computers has been extremely effective because of several reasons. The main reason is that huge amount of data relating to accounts and other transactions can be processed very quickly. MIS are more concerned with levels of management with information essential to the running of smooth business. This Information must be as relevant, timely, accurate, complete and concise as is economically feasible.

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. 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. 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

FEATURES OF MIS Management information systems can be used as a support to managers to provide a competitive advantage. The system must support the goals of the organization. Most organizations are structured along functional lines, and the typical systems are identified as follows: 1. Accounting management information systems: All accounting reports are shared by all levels of accounting managers. The management of the information which at the accounting department is one of the most important factors in determines the effectiveness and efficiency of the department. The information that gathers included the invoice, account document, payment, draft, banking document and etc. It is important to ensure the validity and the accuracy of the information that provided to the department. The information is usually arrange and manage by computer system compare to the human power which written down in black and white. The software and system which use for the management of the information in accounting were UBS system, SQL system and other relevant system that can manage the accounting information files. The system using especially the SQL system is the most suitable system to maintain and reorder the accounting department information. The information that gather mixed or not in order is easily recognize by the system and determine the detail and type it's use to be. In the accounting department, the information is an important element that running the operation of the department. The accounting department is relying on the information as well as other department that rely on it in the other way around. It is important that other department give the invoice and other accounting relevant document to the accounting department for management and kept. It is also vital that the accounting department provide the right and accurate information to the organization and other department. The reliability and prediction of the information determine the future of the organization and the trustee of public to the organization. 2. Financial management information systems:

The financial management information system provides financial information to all financial managers within an organization including the chief financial officer. The chief financial officer analyzes historical and current financial activity, projects future financial needs, and monitors and controls the use of funds over time using the information developed by the MIS department. The information that has for financial department will determine the budget and the planning for the organization. In establish or development for the organization, the financial information that gathers will determine the size of the company. The information that gathers also shows the financial status of the organization in development feature. In order to make sure the security of the information of the organization, the information is well keep and in choosing for the ordinate for the financial department, only those who are qualifies will be chosen. The information systems cost estimating is an important management concern. An estimate helps to cost justify individual proposals, to schedule their development, to staff them, to control and monitor their progress, and to evaluate estimators and implementers. Through a case study of a chemical manufacturer, the investigation reported in this article facilitates a better understanding of the management of the cost estimating process. Interviews with 17 information systems managers and staff members, and four user managers confirm that the practice of cost estimating can be viewed in terms of both a Rational Model and a Political Model, can identify impediments to accurate estimating, and can provide suggestions and warnings for managers and future researchers. Benetton , for example, operates a network of 4,000 shops in 62 countries with estimated revenues of $1.2 billion in 1989. The company uses a communication network that transfers daily retail sales data to corporate headquarters. Using advanced information systems, information specialists analyze large amounts of data to capture ever-changing consumer trends, and new fashion products are designed using CAD systems. Production is also highly computerized, and distribution processes are aided by robots. Each year 50 million pieces of clothing are distributed. Operations of this scale and agility were previously unheard of in the garment industry. In spite of its large-scale of operation, however, Benetton has only 1,500 employees and relies on a VAP consisting of hundreds of outside contractors and subcontractors employing 25,000 people scattered throughout the world. However, that the impact of new technology in computers and networking is not limited to the reduction of external coordination costs but extends to the reduction of internal coordination costs 3. Manufacturing management information systems: More than any functional area, operations have been impacted by great advances in technology. As a result, manufacturing operations have changed. For instance, inventories are provided just in time so that great amounts of money are not spent for warehousing huge inventories. In some instances, raw materials are even processed on railroad cars waiting to be sent directly to the factory. Thus there is no need for warehousing. The modern input subsystem of the business organization relies heavily on information systems in order to function efficiently and effectively. Input subsystems secure raw material, subassemblies and assemblies from different and remote sources based on the just-in-time (JIT) philosophy same as mention above. In a JIT environment, information systems are needed to communicate with vendors in order to ensure that the right quality and quantity of material are received as needed in a timely manner.

The management of information system is also important for the total quality management concept (TQM). TQM is a philosophy for continues improving of the quality of the goods and services. The important of TQM differs from organization to organization and to the single organization from time to time. The different weight that each dimension holds is a function of the component in the organization TQM we at the specific time. The information system is also important in term of business process reengineering (BPR), also known as business process to achieve dramatic improvements in performance (Hammer, 1990). For example, information systems in the automation of manufacturing processes in forms of computer integrated manufacturing (CIM) and its related technologies such as computer aided design (CAD), computer aided manufacturing (CAM) and flexible manufacturing (FMI) is dramatically changing the nature of the process subsystem and significantly impacting on organizational strategies. Information systems are the backbone of this wave of automation. Information systems integrate the different components of automation to enhance the efficiency and effectiveness of the process subsystem. 4. Marketing management information systems: A marketing management information system supports managerial activity in the area of product development, distribution, pricing decisions, promotional effectiveness, and sales forecasting. More than any other functional areas, marketing systems rely on external sources of data. These sources include competition and customers. The information gather is also important to determine the strategies for marketing. In order to analyze the impact of information systems on organizations, we categorize the role of information systems in a firm, determine what effects modern IT has on the cost structure of a firm, and examine, from the perspective of agency theory and transaction cost economics, how these effects result in changes to various attributes of the firm. Further more, information systems are used to scan the global business environment, providing the organization with valuable feedback regarding business opportunities, market and consumer demographics as well as cultural and political information. Such feedback is critical for formulating and implementing business and marketing strategies that match organizational strengths with environmental opportunities. In addition, information systems link and co-ordinate the different operations of the organization globally facilitating overall internal efficiency. The output subsystems of the business organization also have been changing in response to sophisticated customers who are demanding high quality and environmentally sound products. Quality assurance systems are being implemented and alternative packaging materials are being used in response to customer needs and wants. Information systems are critical for the management of quality assurance systems and the evaluation of the environmental impact of alternative packaging materials. Automated ware housing and distribution world, of course, be impossible without significant investments in information systems. Transaction costs" used here synonymously with "external coordination costs" means the coordination costs involved in using an outside market) The costs of writinga contract and securing means to enforce it are examples of market transaction costs. Suppose a company hires an outside software developer to develop and install some software. The software contract would typically include a large number of items specifying terms and conditions: functional specifications, acceptance-testing procedures, a timetable of

the delivery process, protection of trade secrets, repairs and maintenance responsibilities, liabilities due to failures, required documentation, price and payment schedules, options to terminate the agreement, and so forth.

5. Human resources management information systems: Human resources management information systems are concerned with activities related to workers, managers, and other individuals employed by the organization. Because the personnel function relates to all other areas in business, the human resources management information system plays a valuable role in ensuring organizational success. Activities performed by the human resources management information systems include, work-force analysis and planning, hiring, training, and job assignments. For more specific example, the organization uses the information gather to divide the most suitable role for the most suitable person in the organization. As same as other, this will enhanced the efficiency and the effectiveness of the organization. In managing the organization, this will reduce the error and conflict between the workers themselves. PYRAMID STRUCTURE OF MANAGEMENT INFORMATION SYSTEM(MIS):

MIS can be defined as an integrated, user-machine system for providing information to support managerial, operational, and decision-making functions in an organization. According to Barry E. Cushing, MIS is "a set of human and capital resources within an organization which is responsible for the collection and processing of data to produce information which is useful to all levels of management in planning and controlling the activities of an organization." For the purpose of analysis, planning, control, and decision making, the system uses manual procedures, computer hardware and software, data models, and a database. Information is needed at all levels within a business organization. However, its scope, content, and presentation differ from one level to another. Based on the location at which information is used, it can be classified as operational, tactical, and strategic information. This has been depicted as a pyramid structure in diagram. Levels of management: In order to understand who the users of an MIS are and what information they need, one must first understand the levels of management and the types of decisions are made at each level. 1. Lower level management makes decisions that affect day to day operations. Programmed decisions that are predetermined by rules and procedures. They lead to a desired result. The information needs of lower-level mgrs. can be met by administrative data processing activities. 2. Middle-level mgrs. plan working capital, schedule production, formulate budgets, and make short-term forecasts. Mid-level managers make tactical decisions that usually involve time periods of up to two years. Many Mid-level mgmt decisions are non-programmed decisions. No specific predetermined steps cab be followed to each solution. The information needs of Mid-level mgrs. must be specific. 3. Top-level mgrs. provide direction for the company by planning for the next five years +. Top-level mgrs. make strategic decisions that involve a great deal of uncertainty. Top-level mgt. decisions are non-programmed decisions. DATA PROCESSING VS MANAGEMENT INFORMATION SYSTEM Data processing is the restructuring , manipulation or recording of data by people or machines, to increase their usefulness and value for some particular purpose. It includes classifying, sorting, merging , recording, retrieving, calculating, transmitting, summarizing and reporting. Management information system is in integrated user- mahine system for providing information to support the operators,management, analysis and decision making functions in an organization.The MIS utilizes computer hardware and softare, manual procedures, models for analysis, planning,control and decision making and database. A data processing processes raw data and produces reports to support operations. It represents the automation of the earlier manual or mechanical processes.

Management information system is much more comprehensive encompassing processing in support of a wider range of organsational functions and management processes although it also includes transaction processing as one of its functions. The main point of distinction between MIS and data processing system is that the former has the capability to provide analysis, planning and decision making support. It includes access to decision models, adhoc query facility on a database. Secondly management Information System provides for usage of information resources as a means of improved decision making. Organization effectiveness and achieving a competitive advantage. CLASSIFICATION OF MIS 1. Transaction Processing System (TPS) 2. Management information System (MIS) 3. Decision Support System (DSS) 4. Executive Support System (ESS) 5. Office Automation Systems (OASs), and 6. Business Expert Systems (BESs) Transaction Processing System TPS processes transaction and produces reports. It represents the automation of the fundamental, routine processing used to support business operations. It does not provide any information to the user to his/her decision-making. TPS uses data and produces data as shown in the following diagram. Data Processing Data Previously, TPS was known as Management Information System. Prior to Computers, data processing was performed manually or with simple machines. The domain of TPS is at the lowest level of the management hierarchy of an organization. Management Information System (MIS) MIS is an information system, which processes data and converts it into information. A management information system uses TPS for its data inputs. The information generated by the information system may be used for control of operations, strategic and long-range planning. Short-range planning, management control, and other managerial problem solving. It encompasses processing in support of a wide range of organizational functions & management processes. MIS is capable of providing analysis, planning & decision making support. The functional areas of a business may be marketing, production, human resource, finance and accounting. Decision Support System (DSS) A decision support system (DSS) is an information system application that assists decisionmaking. DSS tends to be used in planning, analyzing alternatives, and trial and error search for solution. The elEments of the decision support system include a database, model base & software. The main application areas of DSS are Production, finance and marketing. Element of DSS

DSS can be differentiated from MIS on the basis of processing the information. MIS processes data to convert it into information. DSS processes information to support the decision making process of a manager.

Executive Support System (ESS) Executive Support System (ESS) is an extension of the management information system, which is a special kind of DSS; An ESS is specially tailored for the use of chief executive of an organization to support his decision-making. It includes various types of decision-making but it is more specific and person oriented. Office Automation Systems (OAS) Office automation refers to the application of computes and communication technology to office functions. Office automation systems are meant to improve the productivity of managers at various levels of management of providing secretarial assistance and better communication facilities. Office activities may be grouped under two classes, namely i) Activities performed by clerical personnel (clerks, secretaries, typist, etc.,) and ii)Activities performed by the executives (managers, engineers or other professionals like economist, researches etc.) In the first category, the following is a list of activities. a) Typing b) Mailing c) Scheduling of meetings and conferences, d) Calendar keeping, and e) Retrieving documents The following is a list of activities in the second category (managerial category) a) Conferencing. b) Production of information (messages, memos, reports, etc.) and controlling performance Business Expert Systems: These systems are one of the main types of knowledge-based information systems. These systems are based on artificial intelligence, and are advanced information systems. A business expert system is a knowledge based information system that uses its knowledge about a specific, complex application area to act as an expert. The main components of an expert system are: a. Knowledge Base b. Interface Engine c. User Interface INFORMATION SYSTEM An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose Application. Hardware Software

Data Network Procedures People

INTELLIGENT INFORMATION SYSTEM EXECUTIVE INFORMATION SYSTEM(EIS) An executive information system (EIS) is a type of management information system intended to facilitate and support the information and decision-making needs of senior executives by providing easy access to both internal and external information relevant to meeting the day to day goals of the organization. It is commonly considered as a specialized form of decision support system (DSS). The emphasis of EIS is on graphical displays and easy-to-use user interfaces. They offer strong reporting and drill-down capabilities. In general, EIS are enterprise-wide DSS that help top-level executives analyze, compare, and highlight trends in important variables so that they can monitor performance and identify opportunities and problems. EIS and data warehousing technologies are converging in the marketplace. Advantages of EIS Easy for upper-level executives to use, extensive computer experience is not required in operations Provides timely delivery of company summary information Information that is provided is better understood EIS provides timely delivery of information. Management can make decisions more promptly. Improves tracking information Offers efficiency to decision makers Disadvantages of EIS System dependent Limited functionality, by design

Information overload for some managers Benefits hard to quantify High implementation costs System may become slow, large, and hard to manage Need good internal processes for data management May lead to less reliable and less secure data

INFORMATION RESOURCE MANAGEMENT(IRM) EXTENT OF INTEGRATION OF INFORMATION SYSTEM