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Information Concepts: Data and Information – Meaning and importance:-

Data: Data is raw facts. Data is like raw material. Data does not interrelate and also it does not
help in decision making. Data is defined as groups of non-random symbols in the form of text,
images, voice representing quantities, action and objects.
Information: Information is the product of data processing. Information is interrelated data.
Information is equivalent to finished goods produced after processing the raw material. The
information has a value in decision making. Information brings clarity and creates an intelligent
human response in the mind.
According to Davis and Olson: ―Information is a data that has been processed into a form that
is meaningful to recipient and is of real or perceived value in the current or the prospective
action or decision of recipient.ǁ
Data Processing Information

Information Generation
It is a most critical resource of the organization. Managing the information means managing
future. Information is knowledge that one derives from facts placed in the right context with the
purpose of reducing uncertainty.
Characteristics of Information:
The parameters of a good quality are difficult to determine for information.
Quality of information refers to its fitness for use, or its reliability.
Following are the essential characteristic features:
i) Timeliness: Timeliness means that information must reach the recipients within the prescribed
timeframes. For effective decision-making, information must reach the decision-maker at the
right time, i.e. recipients must get information when they need it. Delays destroys the value of
information. The characteristic of timeliness, to be effective, should also include up-to-date, i.e.
current information)
ii) Accuracy: Information should be accurate. It means that information should be free from
mistakes, errors &, clear. Accuracy also means that the information is free from bias. Wrong
information given to management would result in wrong decisions. As managers decisions are
based on the information supplied in MIS reports, all managers need accurate information.
iii) Relevance: Information is said to be relevant if it answers especially for the recipient what,
why, where, when, who and why? In other words, the MIS should serve reports to managers
which is useful and the information helps them to make decisions..
iv)Adequacy: Adequacy means information must be sufficient in quantity, i.e. MIS must
provide reports containing information which is required in the deciding processes of decision-
making. The report should not give inadequate or for that matter, more than adequate
information, which may create a difficult situation for the decision-maker. Whereas inadequacy
of information leads to crises, information overload results in chaos.
v) Completeness: The information which is given to a manager must be complete and should
meet all his needs. Incomplete information may result in wrong decisions and thus may prove
costly to the organization.
vi) Explicitness: A report is said to be of good quality if it does not require further analysis by
the recipients for decision making.
vii) Impartiality: Impartial information contains no bias and has been collected without any
distorted view of the situation.

Data are plain facts. When data are processed, organized, structured or presented in a given
context so as to make them useful, they are called Information. It is not enough to have data in
themselves are fairly useless. But when these data are interpreted and processed to determine its
true meaning, they become useful and can be called Information.
As an example, suppose that you want to know how you’re doing in a particular course.
So far, you’ve taken two 20-question multiple-choice tests. On the first, you got questions 8, 11,
and 14 wrong; on the second, you did worse, missing items 7, 15, 16, and 19. The items that you
got wrong are merely data—unprocessed facts. What’s important is your total score. You scored
85 on the first exam and 80 on the second. These two numbers constitute information—data that
have been processed, or turned into some useful form.

Importance of information system:

(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
(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.

Relevance of Information in Decision Making:-

The word ―decision ―is derived from the Latin word ―decidoǁ. Which means ―A decision,
therefore is
A Settlement
A fixed intuition to bringing to a conclusive result
A judgment
A resolution

Decision: A decision is the choice out of several options made by the decision maker to achieve
some objective in a given situation.
Business Decision: Business decisions are those which are made in the process of conducting
business to achieve its objective in a given situation.

Characteristic of Business Decision Making:

a) Sequential in nature.
b) Exceedingly complex due to risk and trade off.
c) Influenced by personal values.
d) Made in institutional setting and business environment.

Rational Decision Making: A rational decision is the one which, effectively and efficiently,
ensure the achievement of the goal for which the decision is made .In reality there is no right or
wrong decision but a rational decision or irrational decision which depends on situation.

Type of Rationality:
Objectively: Maximum the value of the objectives.
Subjective: If it is minimize the attainment of value in relation to the knowledge and awareness
of subject.
Consciously: Extent the process of the decision making is a conscious one
Organizationally: degree of the orientation towards the organization.
Personal: Rational to the extent is achieves an individual‘s personal reason (goals).

Type of Decision Making System: There are two types of decision making system on the basis
of knowledge about the environment.
(i) Closed: If the manager operates in a known environment then it is called closed decision
making system.
a) Manager knows the set of decision alternative and know their outcome in term of values.
b) Manager has a model, by which decision alternatives can be generated, tested and ranked.
c) The manager can choose one of them, based on some goal or objective.

(ii) Open: If the manager operates in unknown environment then it is called open decision
a) Manager does not know all alternatives.
b) Outcome is not known.
c) No methods or models are used.
d) Decide objective or goal; select one where his aspirates or desire are met best.

Types of Decision: Types of decision are based on the degree of knowledge about the out come
of the events which are yet to take place.
Certainty: If the manager has full knowledge of event or outcome then it is a situation of
Risk: If the manager has partial knowledge or probabilistic knowledge then it is decision under
Uncertainty: If the manager does not have any knowledge, it is decision making under
MIS converts the uncertainty to risk and risk to certainty. The decision at the low level
management is certain, at middle level of the management the decision is under risk and at the
top level management the decision is in under uncertain.
Nature of decision: Decision making is a complex task. To resolve the complexity the nature of
decision are of two types:

Programmed and Non-Programmed Decision:

a) If a decision can be based on a rule, methods or even guidelines, it is called the programmed
b) A decision which cannot be made by using a rule or model is the non-programmed decision.

Decision Support System refers to a class of systems which support in the process of decision
making and does not always give a decision itself.
Decision Support Systems (DSS) are a specific class of computerized information system that
supports business and organizational decision-making activities. A properly designed DSS is an
interactive software-based system intended to help decision makers compile useful information
from raw data, documents, personal knowledge, and/or business models to identify and solve
problems and make decisions
DSS is an application of Hebert Simon model, as discussed, the model has three phases:
i) Intelligence
ii) Design
iii) Choice 30

The DSS basically helps in the information system in the intelligence phase where the objective
is to identify the problem and then go to the design phase for solution. The choice of selection
criteria varies from problem to problem.
It is therefore, required to go through these phases again and again till satisfactory solution is
In the following three phase cycle, you may use inquiry, analysis, and models and accounting
system to come to rational solution.
These systems are helpful where the decision maker calls for complex manipulation of data and
use of several methods to reach an acceptable solution using different analysis approach. The
decision support system helps in making a decision and also in performance analysis. DSS can
be built around the rule in case of programmable decision situation. The rules are not fixed or
predetermined and requires every time the user to go through the decision making cycle as
indicated in Herbert Simon model.

i) DSS should be adaptable and flexible.
ii) DSS should be interactive and provide ease of use.
iii) Effectiveness balanced with efficiency (benefit must exceed cost).
iv) Complete control by decision-makers.
v) Ease of development by (modification to suit needs and changing environment) end users.
vi) Support modeling and analysis.
vii) Data access.
viii) Standalone, integration and Web-based

DSS Characteristics:
i) Support for decision makers in semi structured and unstructured problems.
ii) Support managers at all levels.
iii) Support individuals and groups.
iv) Support for interdependent or sequential decisions.
v) Support intelligence, design, choice, and implementation.
vi) Support variety of decision processes and styles

Sources and Types of Information:-

Methods of Data and Information Collection: Several methods are available for the collection
of data. The choice of method will have an impact on the quality of information. Similarly the
design of data collection method also decides the quality of data and information.
Following are the methods of data collection:
i) Observation
ii) Experiment
iii) Survey
iv)Subjective Estimation
v) Transaction Processing
vi)Purchase from Outside
vii) Publication
viii) Government Agencies

An information source is a source of information for somebody, i.e. anything that might inform
a person about something or provide knowledge about it. Different types of questions require
different sources of information. Information sources may be observations, people, speeches,
documents, pictures, organizations, websites, etc. They may be primary sources, secondary
sources and tertiary sources and so on.

Primary sources are original materials. Information for which the writer has no personal
knowledge is not primary, although it may be used by historians in the absence of a primary
source. In the study of history as an academic discipline, a primary source (also called original
source or evidence) is an artifact, a document, a recording, or other source of information that
was created at the time under study. It serves as an original source of information about the topic.
Similar definitions are used in library science, and other areas of scholarship. In journalism, a
primary source can be a person with direct knowledge of a situation, or a document written by
such a person

Secondary source is a document or recording that relates or discusses information originally

presented elsewhere. A secondary source contrasts with a primary source, which is an original
source of the information being discussed; a primary source can be a person with direct
knowledge of a situation, or a document created by such a person.
Secondary sources involve generalization, analysis, synthesis, interpretation, or evaluation of the
original information. Primary and secondary are relative terms, and some sources may be
classified as primary or secondary, depending on how it is used. An even higher level, the
tertiary source, such as an encyclopedia or dictionary, resembles a secondary source in that it
contains analysis, but attempts to provide a broad introductory overview of a topic

A tertiary source is an index and/or textual condensation of primary and secondary sources.
Some examples of tertiary sources are almanacs, guide books, survey articles, timelines, and user
guides. Depending on the topic of research, a scholar may use a bibliography, dictionary, or
encyclopedia as either a tertiary or a secondary source.
As tertiary sources, encyclopedias and textbooks attempt to summarize and consolidate the
source materials into an overview, but may also present subjective commentary and analysis
(which are characteristics of a secondary source).
In some academic disciplines the distinction between a secondary and tertiary source is relative
but in historiography it is absolute.
In the UNISIST model, a secondary source is a bibliography, whereas a tertiary source is a
synthesis of primary sources

A business has several information systems:

(A) Formal Information System
(B) Informal Information System
(C) Computer Based Information System
Formal Information System: It is based on organizational chart represented by the
Informal Information System: It is an employee based system designed to meet personal and
vocational needs and to help in the solution of work-related problems. It also funnels information
upward through indirect channels. It works within the framework of the business and its stated
Computer Based Information System (CBIS): This category of information system depends
mainly on the computer for handling business application. System analysis develops different
types of information system to meet variety of business needs. There is class of system
collectively known as computer based information system. They can be classified as :
Transaction Processing System (TPS)
Management Information System (MIS)
Decision Making System (DSS)
Office Automation System (OAS)
Cost Benefit Analysis –Quantitative and Qualitative Aspects:-
The valuation of benefits and costs should reflect preferences revealed by choices which have
been made. For example, improvements in transportation frequently involve saving time. The
question is how to measure the money value of that time saved. The value should not be merely
what transportation planners think time should be worth or even what people say their time is
worth. The value of time should be that which the public reveals their time is worth through
choices involving tradeoffs between time and money. If people have a choice of parking close to
their destination for a fee of 50 cents or parking farther away and spending 5 minutes more
walking and they always choose to spend the money and save the time and effort then they have
revealed that their time is more valuable to them than 10 cents per minute. If they were
indifferent between the two choices they would have revealed that the value of their time to them
was exactly 10 cents per minute.
The most challenging part of CBA is finding past choices which reveal the tradeoffs and
equivalencies in preferences. For example, the valuation of the benefit of cleaner air could be
established by finding how much less people paid for housing in more polluted areas which
otherwise was identical in characteristics and location to housing in less polluted areas.
Generally the value of cleaner air to people as revealed by the hard market choices seems to be
less than their rhetorical valuation of clean air.
In order for the business case to have the best chance of securing the desired funds, a
significant portion of the proposal should focus on the quantitative aspects of proposed projects,
as opposed to the qualitative characteristics. Quantitative analysis focuses on measurable
numeric data while qualitative analysis is based on observed characteristics that are difficult to
measure. An example of qualitative data associated with a software implementation would be the
cost of savings realized, while an example of qualitative data could be improved employee

Assessing Information Needs of the Organization.

To facilitate the management decision making at all levels of company, the MIS must be
integrated. MIS units are companywide. 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
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 an organization.

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.

Dimensions of Information: There are three most common dimensions of information for MIS
(i) Economic Dimension: Economic dimension of information refers to the cost of information
and its benefits. Generation of information costs money. Measuring cost and benefit of
information is difficult because of intangible characteristic of information.
Cost of Information: Cost of information may include: Cost of acquiring data, Cost of
maintaining data, Cost of generating information and Cost of communication information. Costs
related to the response time require generating information and communicating it. Thus, for
system with low response time, the cost is high. The cost is depends on accuracy, speed of
generation etc.
Value of Information: Information has a cost for its acquisition and maintenance. Thus before a
particular piece of information is acquired, decision maker must know its value. The information
has a perceived value in terms of decision making. The decision maker feels more secured when
additional information is received in case of decision making under uncertainty or risk.
Perfect Information: The information is called a Perfect Information, if it wipes out
uncertainty or risk completely. However, perfect information is a myth.
The value of information is the value of the change in decision behavior because of the
information. The change in the behavior due to new information is measured to determine the
benefit from its use. To arrive at the value of information, the cost incurred to get this
information is deducted from the benefit.
Value of information = Cost to get information-benefit
Given a set of possible decisions, a decision maker will select one on the basis of the available
information. If the new information causes a change in the decision, then the value of
information is the difference in the value between outcome of the old decision and that of new
decision, less the cost obtaining the new information. The value of the additional information
making the existing information perfect (VPI) is: VPI = (V2 - V1) - (C2 - C1) Where V is the
value of the information and C is the cost of obtaining the information. V1 and C1 relate to one
set of information V2, C2 relate to the new set. In MIS, the concept of the value of information is
used to find out the benefit of perfect information and if the value is significantly high, the
system should provide it. If the value is insignificant, it would not be worth collecting the
additional information.
(ii) Business Dimension: Different types of information are required by managers at different
levels of the management hierarchy. The information needs of managers at strategic planning
level are altogether different that those of operational control managers. It is because of the fact
that managers at different levels are required to perform different functions in an organization.
(iii) Technical Dimension: This dimension of information refers to the technical aspects of the
database. It includes the capacity of database, response time, security, validity, data
interrelationship etc.
a. Knowledge Base
b. Interface Engine
c. User Interface

1.8 Information Concepts

The word .information. is used commonly in our day to day working. In MIS, information has a
precise meaning and it is different from data. The information has a value in decision making while
data does not have. Information brings clarity and creates an intelligent human response in the
mind. In MIS a clear distinction is made between data and information. Data is like raw materials
while the information is equivalent to the finished goods produced after processing the raw
material. Information has certain characteristics. These are: Information
Improves representation of an entity
Updates the level of knowledge.
Has a surprise value.
Reduces uncertainty.
Aids in decision making.
The quality of information could be called good or bad depending on the mix of these
characteristics. Devis and Olson defines information as a data that has been processed into a form
that is meaningful to the recipient and is of real or perceived value in the current or the prospective
actions or decisions of the recipient. Data is defined as groups of non-random symbols in the form
of text, images or voice representing quantities, actions and objects. Whether an entity is a data or
information, it must be transferred through communication from the Source. to the Destination
without loss of content. The general model for such communication is given in Fig.

The above model of communication is used in the MIS. The MIS is equivalent to the transmitter
which provides information and sends through reports (channel) to the various receivers, which is
decoded or interpreted by the receiver at the destination. The poor quality of information due to
various factors would create confusion and misunderstanding, which is equivalent to a Noise and a
Destortion in the communication model. A good MIS communicates the information without a
noise and a distortion to the user.

1.9 Information Presentation

Presentation of the information is an art. The data may be collected in the best possible manner and
processed analytically, bringing lot of value in the information; however, if it is not presented
properly, it may fail to communicate anything of value to the receiver. The degree of
communication is affected by the methods of transmission, the manner of information handling and
the limitations and constraints of a receiver as the information processor and the organization as the
information user.
The methods used for improving communication are summarization and message routing. The
concept of summarization is used to provide information which is needed in the form and content.
The information can be summarized in a number of ways as shown in Table .
The principle behind summarization is that too much information causes noises and distortions, i.e.,
confusion, misunderstanding and missing the purpose. The summarization suppresses the noise and
the distortions.
Another method of improving the degree of communication is through message routing. The
principle here is to distribute information to all those who are accountable for the subsequent
actions or decisions in any manner. That is if the information is generated with a certain purpose for
a primary user, then such information may have secondary purposes to some other users in the
organization. This is achieved by sending the copies of the reports or documents to all the
concerned people or users. The principle of the message routing achieves the spread of information
to the appropriate quarters.
Knowledge is a power and an intelligent person in the organization can misuse this power to
achieve personal goals undermining the functional and organizational goals. This tendency should
be curbed. Further, the decision maker may call for the information on the grounds that, just in case
required, he should readily have it. Apart from the misuse of information, it has an impact on the
cost of information processing. In order to curb the misuse of information, a control is exercised on
the content of information and its distribution.

1.10 Bias in information

While choosing the appropriate method of communicating information a care has to be taken to see
that is not biased. For example, while using the techniques of classification or filtering the
information, it should not happen that certain information gets eliminated or does not get classified.
That is, a deliberate bias in covering certain information is to be avoided. This bias enters because
people try to block sensitive information which affects them. To overcome this problem, a formal
structure of organization should be adopted and the type of information and its receiver should be
decided by the top management.
Many a times the data and the information are suppressed but the inferences are informed, with no
or little possibility of verification or rethinking. In this case one who draws inferences may have a
bias in the process of collection, processing and presentation of data and information. Though the
deliberate enforcement of the inference on the receiver avoids a possibility of the multiple
inferences, but in this case processor.s bias is forced on the receiver. For example, organizations
have departments like Corporate Planning, Market Research, R and D, HRD and so on, which
collect the data and analyze it for the company and communicate the inferences. In all these cases
personal bias, organizational bias and management bias may be reflected in the entire process of
collection processing, and communication inference.

The presentation of the information will generate a bias and may influence the user. For example, if
the information is presented in an alphabetical order and if it is lengthy, the first few information
entities will get more attention. If the information is presented with a criteria of exception, the
choice of exception and deviation from the exception creates a bias by design itself. For a quick
grasp, the information is presented in a graphical form. The choice of scale, the graphic size and the
colour introduced a bias in the reader.s mind.
The base, which may creep in inadvertently because of the information system design, can be
tackled by making the design flexible, so far as reporting is concerned. Allow
the manager or the decision maker to choose his classification or filtering criteria, the scope of
information, the method of analysis and the presentation of inference. However, somewhere balance
needs to be maintained between the flexibility of the design and the cost, and its benefits to the
managers. Disregarding the bias in information, it must have certain attributes to increase its utility
as shown in Table.
Redundancy is the repetition of the parts or messages in order to circumvent the distortions or the
transmission errors. The redundancy, therefore, sometimes is considered as an essential feature to
ensure that the information is received and digested. In MIS the redundancy of data and
information, therefore, is inevitable on a limited scale. Its use is to be made carefully so that the
reports are not crowded with information.

1.11 Characteristics of Information:

The parameters of a good quality are difficult to determine, however, the information can be termed
as of a good quality if it meets the norms of impartiality, validity, reliability, consistency and age.
The quality of information has another dimension of utility from the user.s point of view. The users
being many, this is difficult to control. Therefore, if one can develop information with due regards
to these parameters, one can easily control the outgoing quality of the information with the probable
exception of the satisfaction at the users end.
Following are the essential characteristic features :
(i) Timeliness : Timeliness means that information must reach the recipients within the prescribed
timeframes. For effective decision-making, information must reach the decision-maker at the right
time, i.e. recipients must get information when they need it. Delays destroys the value of
information. The characteristic of timeliness, to be effective, should also include up-to-date, i.e.
current information.
(ii) Accuracy : Information should be accurate. It means that information should be free from
mistakes, errors &, clear Accuracy also means that the information is free from bias. Wrong
information given to management would result in wrong decisions. As managers decisions are
based on the information supplied in MIS reports, all managers need accurate information.
(iii) Relevance : Information is said to be relevant if it answers especially for the recipient what,
why, where, when, who and why? In other words, the MIS should serve reports to managers which
is useful and the information helps them to make decisions..
(iv) Adequacy : Adequacy means information must be sufficient in quantity, i.e. MIS must provide
reports containing information which is required in the deciding processes of decision-making. The
report should not give inadequate or for that matter, more than adequate information, which may
create a difficult situation for the decision-maker. Whereas inadequacy of information leads to
crises, information overload results in chaos.
(v) Completeness : The information which is given to a manager must be complete and should
meet all his needs. Incomplete information may result in wrong decisions and thus may prove
costly to the organization.
(vi) Explicitness : A report is said to be of good quality if it does not require further analysis by the
recipients for decision making.
(Vii) Impartiality: Impartial information contains no bias and has been collected without any
distorted view of the situation. The partiality creeps in, if the data is collected with a preconceived
view, a prejudice, and a pre-determined objective or a certain motive.
(viii)Validity: The validity of the information relates to the purpose of the information. In other
words, it is the answer to the question-dose the information meet the purpose of decision making for
which it is being collected? The validity also depends on how the information is used. Since the
information and the purpose need not have one to one correspondence, the tendency to use it in a
particular situation may make the information invalid. For example, if the quality of the
manufactured product is deteriorating and it is decided to select the causes of poor quality, then one
must collect all the possible causes which may affect the quality. Quality is a function of the raw
material, the process of manufacture, the tools applied, the measures of the quality assessment, the
attitude of the people towards the control of quality. However, if the information collected talks
only about raw materials and the process of manufacture, then this information is not sufficient and
hence it is not valid for all the decisions which are required to control the quality.
(ix) Reliability: It is connected to the representation and the accuracy of what is being described.
For example, if the organization collects the information on the product acceptance in the selected
market segment, the size of the sample and the method of selection of the sample will decide the
reliability. If the sample is small, the information may not give the correct and a complete picture
and hence it is not reliable. The reliability is also affected from the right source.
(x)Consistency:The information is termed as inconsistent if it is derived form a data which dose not
have a consistent pattern of period. Somewhere, the information must relate to a consistent base or a
pattern. For example, you have collected the information on the quantity of production for the last
twelve months to fix the production norms. If in this twelve months period, the factory has worked
with variable shift production, the production statistics of the twelve months for comparison is
inconsistent due to per shift production. The consistency can be brought in by rationalizing the data
to per shift production per month. The regularity in providing the information also helps in
assessing the consistency in the information.
(xi)Age: If the information is old, it is not useful today. The currency of the information makes all
the difference to the users. If the information is old then it does not meet any characteristics of the
information viz., the update of knowledge, the element of surprise and the reduction of uncertainty,
and the representation. Maintaining these parameters at a high degree always poses a number of
problems. These problems are in the management of the operations, the sources, the data processing
and the systems in the organization. A failure to maintain the parameters to a high degree affects the
value of the information to the decision maker.

1.12 Different types of Information

Classification of Information : The information can be classified in a number of ways provide to

better understanding.
Jhon Dearden of Harvard University classifies information in the following manner :
(1) Action Verses No-Action Information : The information which induces action is called
action information. ‗No stock‗report calling a purchase action is an action information. The
information which communicates only the status is No-Action Information. The stock balance is
no-action information.
(2) Recurring Verses No-Recurring Information : The information generated at regular intervals
is recurring information. The monthly sales reports, the stock statement, the trial balance, etc are
recurring information. The financial analysis or the report on the market research study is
norecurring information.
(3) Internal and external information : The information generated through the internal sources of
the organization is termed as Internal Information, while the information generated through the
govt. reports, the industry survey etc., termed as External Information, as the sources of the data
are outside the organization.

The information can also be classified, in terms of its application :

(i) Planning Information : Certain standard norms and specifications are used in planning of any
activity. Hence such information is called the Planning Information. e. g. Time standard, design
(ii) Control Information : Reporting the status of an activity through a feedback mechanism is
called the Controlling Information. When such information shows a deviation from the goal or the
objective, it will induce a decision or an action leading to control.
(iii) Knowledge Information : A collection of information through the library records and the
research studies to build up a knowledge base as an information is known as Knowledge
(iv)Organization Information : When the information is used by everybody in the organization, it
is called Organization Information. Employee and payroll Information is used by a number of
people in an organization.
(v) Functional/ Operational Information : When the information is used in the operation of a
business it is called Functional/Operational Information.
(vi) Database Information : When the information has multiple use and application, it is called as
database information. Material specification or supplier information is stored for multiple users.

1.13 Difference between Data Processing and Information Processing

Data Processing : Data Processing is a process that converts data into information or knowledge.
The processing is usually assumed to be automated and running on a computer. Because data are
most useful when well-presented and actually informative, data-processing systems are often
referred to as information systems to emphasize their practicality. Nevertheless, both terms are
roughly synonymous, performing similar conversions; data-processing systems typically manipulate
raw data into information, and likewise information systems typically take raw data as input to
produce information as output. Data processing is that a business has collected numerous data
concerning an aspect of its operations and that this multitude of data must be presented in
meaningful, easy-to-access presentations for the managers who must then use that information to
increase revenue or to decrease cost. That conversion and presentation of data as information is
typically performed by a data-processing application.

Information Processing : Information processing is the change or processing of information in any

manner detectable by an observer. Information processing may more specifically be defined in
terms by Claude E. Shannon as the conversion of latent information into manifest information.
Latent and manifest information is defined through the terms of equivocation, remaining
uncertainty, what value the sender has actually chosen, dissipation uncertainty of the sender what
the receiver has actually received and transformation saved effort of questioning - equivocation
minus dissipation. Practical Information Processing can be described as a cycle, where data which
may have no inherent meaning to the observer is converted into information, which does have
meaning to the observer.

1.14 Methods of Data and Information Collection:

Several methods are available for the collection of data. The choice of method will have an impact
on the quality of information. Similarly the design of data collection method also decides the
quality of data and information. The methods of data collection and processing become a part of the
MIS. The various methods of data collection are explained in Table . An awareness of these
methods is essential to the manager. Further, he should also nunderstand the potential problems of
bias, currency, and the fact versus the opinion in the various types of methods. The observation, the
experiment, the survey and the subjective estimation are the methods chosen for data collection and
information about a specific problem, while the remaining methods are chosen to collect data on a
routine basis without any particular problem whatsoever.
Following are the methods of data collection :
i. Observation
ii. Experiment
iii. Survey
iv. Subjective Estimation
v. Transaction Processing
vi. Purchase from Outside
vii. Publication
viii. Government Agencies

Methods of Data and Information Collection :

The specific methods analysts use for collecting data about requirements are called fact – finding
techniques. These include the interview, questionnaire, record inspections (on – site review) and
observation. Analysts usually employ more that one of these techniques to help ensure an accurate
and comprehensive investigation.
1 )Interview
Analysts use interviews to collect information from individuals or from groups. The respondents are
generally current users of the existing system or potential users of the proposed system. In some
instances, the respondents may be managers or employees who provide data for the proposed
system or who will be affected by it. Although some analysts prefer the interview to other fact –
finding techniques, it is not always the best source of application data. Because of the time required
for interviewing, other methods must also be used to gather the information needed to conduct an
It is important to remember that respondents and analysts converse during an interview – the
respondents are not being interrogated. Interviews provide analysts with opportunities for gathering
information form respondents who have been chosen for their knowledge of the system under study.
This method is frequently the best source of qualitative information (opinions, policies, and
subjective descriptions of activities and problems). Other fact finding methods are likely to be more
useful for collecting quantitative data (numbers, frequencies, and quantities).
This method of fact – finding can be especially helpful for gathering information from individuals
who do not communicate effectively in writing or who may not have the time to complete
questionnaires. Interviews allow analysts to discover areas of misunderstanding, unrealistic
expectations, and even indications of resistance to the proposed system.
Interviews can be either structured or unstructured:
Unstructured interviews, using a question – and – answer format, are appropriate when analysts
want to acquire general information about a system. This format encourages respondents to share
their feelings, ideas, and beliefs.
Structured interviews use standardized questions in either an open response or closed – response
format. The former allows respondents to answer in their own words; the latter uses a set of
prescribed answers.
Each approach has advantages and disadvantages. The success of an interview depends on the skill
or the interviewer and on his or her preparation for the interview. Analysts also need to be sensitive
to the kinds of difficulties that some respondents create during interviews and know how to deal
with potential problems. They need to consider not only the information that is acquired during an
interview, but also its significance. It is important to have adequate verification of data through
other data collection methods.
2 ) Questionnaire
The use of questionnaires allows analysts to collect information about various aspects of a system
from a large number of persons. The use of standardized question formats can yield more reliable
data than other fact – finding techniques, and the wide distribution ensures greater anonymity for
respondents, which can lead to more honest responses. However, this method does not allow
analysts to observe the expressions or reactions or respondents. In addition, response may be
limited, since completing questionnaires may not have high priority among the respondents.
Analysts often use open – ended questionnaires to learn about feeling, opinions, and general
experiences or to explore a process or problem.
Closed questionnaires control the frame of reference by presenting respondents with specific
responses form which to choose. This format is appropriate for electing factual information.
The high cost of developing and distributing questionnaires demands that analysts carefully
consider the objective of the questionnaire and determine what structure will be most useful to the
study and most easily understood by the respondents. Questionnaires should also be tested and, if
necessary, modified before being printed and distributed.
As with interviewees, recipients, of questionnaires would be selected for the information they can
provide. The analysts should ensure that the respondents, background and experiences qualify them
to answer the questions.
3 )Record Review
Many kinds of records and reports can provide analysts with valuable information about
organizations and operations. In record reviews, analysts examine information that has been
recorded about the system and user. Record inspection can be performed at the beginning of the
study, as an introduction, or later in the study, as a basis for comparing, actual operations with the
records indicate should be happening.
Records include written policy manuals, regulations and standard operating procedures used by
most organizations and a guide for managers and employees. They do not show what activities are
actually occurring, where the decision – making power lies, or how tasks are performed. However,
they can help analysts understand the system by familiarizing them with what operations must be
supported and with formal relations within the organization.
4 ) Observation
Observation allows analysts to gain information they cannot obtain by any other fact – finding
method. Through observation, analysts can obtain firsthand information about how activities are
carried out. This method is most useful when analysts need to actually observe how documents are
handled, how processes are carried out, observers know what to look for and how to assess the
significance of what they observe.

1.15 level of business activity with reference to information required

While developing an information management strategy within an organization, it is useful to

consider informations need at on three levels :
(i) Corporate (Top Level )
(ii)Team, Division, Business Unit (Middle Level)
(iii)Individual (Low Level )
The needs of each of these three levels must be met if a coordinated and effective solution is to be
maintained in the long-term.
Failure to address any one of the levels will lead to areas of the business or individuals finding their
own solution, which may not fit well within the strategic goals of the organization.
(i) Corporate (Top Level Information) : At the top level corporate information that is useful for
the whole organization. This 'global' information is generally well addressed by the corporate
intranet. Examples of corporate information include policies and procedures, HR information,
online forms, phone directory, etc. Interestingly, there may be a limited amount of truly global
information, and it may not deliver the greatest (measurable) business benefits.
(ii) Team, division, business unit (Middle level) : The middle level is perhaps the most important,
as it covers all the information shared within teams, divisions, business units, etc. This information
may be critical to the day-to-day activities of the group, but of little interest to the rest of the
organization. Examples include project documentation, business unit specific content, meeting
minutes, etc. This level is generally poorly-served within organizations, although collaboration
tools are increasingly being used to address team information needs. It is also being recognized that
it is this 'local' information that may be the most valuable, in terms of driving the day-to-day
activity of the organization.
(iii) Individual (Low Level) : At the lowest level the personal information need of staff exists
throughout the organization. Examples include correspondence, reports and spreadsheets. In most
organizations, staff must struggle with using email to meet their information management needs.
While staff generally recognizes the inadequacy of e-mail, they have few other approaches or
technologies at their disposal.
Managing the Levels : While managing the information at each of the three levels, consider
aspects need consideration:
(a) An information management solution must be provided for staff at each of the three levels.
If corporate solutions aren't provided, then staff will find their own solutions. This is the source of
poor-quality intranet sub-sites, and other undesirable approaches.
(b) A clear policy must be developed, outlining when and how it will apply at all the three levels
and how information should be managed at each level.
(c) Processes must be put in place to 'bubble up' or 'promote' information from lower levels to
higher levels. For example, some team-generated information will be critical for the whole
(d) As much as possible, a seamless information management environment should be delivered that
covers all the three levels.
1.16 Categories of Information
• Strategic Information- relates to ling range planning policies that are direct interest to upper
management and for long range goals. For example- population growth, trends in financial
investment, human resources.
• This information is achieved with the aid of DSS.
• Managerial Information- It is of direct use to middle management and department heads for
implementation and control. For example- sales analysis, cash flow projections, and annual
financial statements.
• This information is of use in short and intermediate range planning- i.e. months rather than years.
• It is maintained with the help of MIS.
• Operational Information- It is short term, daily information used to operate departments and to
enforce the day to day rules and regulations of the business. For example- daily employee absence
sheets, overdue purchase orders, current stock.
This information is achieved with the aid of TPS.
• It is established by data processing systems. Informal Information Systems
• It is an employee based system designed to meet personnel and vocational needs and to help solve,
work related problems.
• It relies on computer for handling business applications.


An information system is a collection of hardware, software, data, people and procedures that are
designed to generate information that supports the day-to-day, short-range, and long-range activities
of users in an organization. Information systems generally are classified into five categories: office
information systems, transaction processing systems, management information systems, decision
support systems, and expert systems. The following sections present each of these information

1. Office Information Systems

An office information system, or OIS (pronounced oh-eye-ess), is an information system that

uses hardware, software and networks to enhance work flow and facilitate communications among
employees. Win an office information system, also described as office automation; employees
perform tasks electronically using computers and other electronic devices, instead of manually.
With an office information system, for example, a registration department might post the class
schedule on the Internet and e-mail students when the schedule is updated. In a manual system, the
registration department would photocopy the schedule and mail it to each student‘s house.

An office information system supports a range of business office activities such as creating and
distributing graphics and/or documents, sending messages, scheduling, and accounting. All levels
of users from executive management to nonmanagement employees utilize and benefit from the
features of an OIS.

The software an office information system uses to support these activities include word processing,
spreadsheets, databases, presentation graphics, e-mail, Web browsers, Web page authoring,
personal information management, and groupware. Office information systems use
communications technology such as voice mail, facsimile (fax), videoconferencing, and electronic
data interchange (EDI) for the electronic exchange of text, graphics, audio, and video. An office
information system also uses a variety of hardware, including computers equipped with modems,
video cameras, speakers, and microphones; scanners; and fax machines.

2. Transaction Processing Systems

A transaction processing system (TPS) is an information system that captures and processes data
generated during an organization‘s day-to-day transactions. A transaction is a business activity
such as a deposit, payment, order or reservation.

Clerical staff typically perform the activities associated with transaction processing, which include
the following:

1. Recording a business activity such as a student‘s registration, a customer‘s order, an

employee‘s timecard or a client‘s payment.

2. Confirming an action or triggering a response, such as printing a student‘s schedule, sending a

thank-you note to a customer, generating an employee‘s paycheck or issuing a receipt to a client.

3. Maintaining data, which involves adding new data, changing existing data, or removing
unwanted data.

Transaction processing systems were among the first computerized systems developed to process
business data – a function originally called data processing. Usually, the TPS computerized an
existing manual system to allow for faster processing, reduced clerical costs and improved customer

The first transaction processing systems usually used batch processing. With batch processing,
transaction data is collected over a period of time and all transactions are processed later, as a
group. As computers became more powerful, system developers built online transaction processing
systems. With online transaction processing (OLTP) the computer processes transactions as they
are entered. When you register for classes, your school probably uses OLTP. The registration
administrative assistant enters your desired schedule and the computer immediately prints your
statement of classes. The invoices, however, often are printed using batch processing, meaning all
student invoices are printed and mailed at a later date.

Today, most transaction processing systems use online transaction processing. Some routine
processing tasks such as calculating paychecks or printing invoices, however, are performed more
effectively on a batch basis. For these activities, many organizations still use batch processing

3. Management Information Systems

While computers were ideal for routine transaction processing, managers soon realized that the
computers‘ capability of performing rapid calculations and data comparisons could produce
meaningful information for management. Management information systems thus evolved out of
transaction processing systems. A management information system, or MIS (pronounced em-
eye-ess), is an information system that generates accurate, timely and organized information so
managers and other users can make decisions, solve problems, supervise activities, and track
progress. Because it generates reports on a regular basis, a management information system
sometimes is called a management reporting system (MRS).

Management information systems often are integrated with transaction processing systems. To
process a sales order, for example, the transaction processing system records the sale, updates the
customer‘s account balance, and makes a deduction from inventory. Using this information, the
related management information system can produce reports that recap daily sales activities; list
customers with past due account balances; graph slow or fast selling products; and highlight
inventory items that need reordering. A management information system focuses on generating
information that management and other users need to perform their jobs.

An MIS generates three basic types of information: detailed, summary and exception. Detailed
information typically confirms transaction processing activities. A Detailed Order Report is an
example of a detail report. Summary information consolidates data into a format that an
individual can review quickly and easily. To help synopsize information, a summary report
typically contains totals, tables, or graphs. An Inventory Summary Report is an example of a
summary report.

Exception information filters data to report information that is outside of a normal condition.
These conditions, called the exception criteria, define the range of what is considered normal
activity or status. An example of an exception report is an Inventory Exception Report is an
Inventory Exception Report that notifies the purchasing department of items it needs to reorder.
Exception reports help managers save time because they do not have to search through a detailed
report for exceptions. Instead, an exception report brings exceptions to the manager‘s attention in
an easily identifiable form. Exception reports thus help them focus on situations that require
immediate decisions or actions.

4. Decision Support Systems

Transaction processing and management information systems provide information on a regular

basis. Frequently, however, users need information not provided in these reports to help them make
decisions. A sales manager, for example, might need to determine how high to set yearly sales
quotas based on increased sales and lowered product costs. Decision support systems help provide
information to support such decisions.

A decision support system (DSS) is an information system designed to help users reach a decision
when a decision-making situation arises. A variety of DSSs exist to help with a range of decisions.

A decision support system uses data from internal and/or external sources.

Internal sources of data might include sales, manufacturing, inventory, or financial data from an
organization‘s database. Data from external sources could include interest rates, population trends,
and costs of new housing construction or raw material pricing. Users of a DSS, often managers,
can manipulate the data used in the DSS to help with decisions.

Some decision support systems include query language, statistical analysis capabilities,
spreadsheets, and graphics that help you extract data and evaluate the results. Some decision
support systems also include capabilities that allow you to create a model of the factors affecting a
decision. A simple model for determining the best product price, for example, would include
factors for the expected sales volume at each price level. With the model, you can ask what-if
questions by changing one or more of the factors and viewing the projected results. Many people
use application software packages to perform DSS functions. Using spreadsheet software, for
example, you can complete simple modeling tasks or what-if scenarios.

A special type of DSS, called an executive information system (EIS), is designed to support the
information needs of executive management. Information in an EIS is presented in charts and
tables that show trends, ratios, and other managerial statistics. Because executives usually focus on
strategic issues, EISs rely on external data sources such as the Dow Jones News/Retrieval service or
the Internet. These external data sources can provide current information on interest rates,
commodity prices, and other leading economic indicators.

To store all the necessary decision-making data, DSSs or EISs often use extremely large databases,
called data warehouses. A data warehouse stores and manages the data required to analyze
historical and current business circumstances.

5. Expert Systems

An expert system is an information system that captures and stores the knowledge of human
experts and then imitates human reasoning and decision-making processes for those who have less
expertise. Expert systems are composed of two main components: a knowledge base and inference
rules. A knowledge base is the combined subject knowledge and experiences of the human
experts. The inference rules are a set of logical judgments applied to the knowledge base each
time a user describes a situation to the expert system.

Although expert systems can help decision-making at any level in an organization,

nonmanagement employees are the primary users who utilize them to help with job-related
decisions. Expert systems also successfully have resolved such diverse problems as diagnosing
illnesses, searching for oil and making soup.

Expert systems are one part of an exciting branch of computer science called artificial intelligence.
Artificial intelligence (AI) is the application of human intelligence to computers. AI technology
can sense your actions and, based on logical assumptions and prior experience, will take the
appropriate action to complete the task. AI has a variety of capabilities, including speech
recognition, logical reasoning, and creative responses.

Experts predict that AI eventually will be incorporated into most computer systems and many
individual software applications. Many word processing programs already include speech

Integrated Information Systems

With today‘s sophisticated hardware, software and communications technologies, it often is

difficult to classify a system as belonging uniquely to one of the five information system types
discussed. Much of today‘s application software supports transaction processing and generates
management information. Other applications provide transaction processing, management
information, and decision support. Although expert systems still operate primarily as separate
systems, organizations increasingly are consolidating their information needs into a single,
integrated information system.

, there are a variety of requirements for information. Senior managers need information to help
with their business planning. Middle management need more detailed information to help them
monitor and control business activities. Employees with operational roles need information to help
them carry out their duties.

As a result, businesses tend to have several "information systems" operating at the same time. This
revision note highlights the main categories of information system and provides some examples to
help you distinguish between them.

1.18 Nolan's Six-stage Model for Growth of MIS

One of the stages of growth model, helping in the understanding of the role of information systems,
in an organization's strategy and its maturity. Earlier, in a similar model called the four-stage
growth model the maturity of an organization was captured in terms of use of information systems.
The stages are,
1. Initiation-in which the primary focus is cost reduction and only specialized applications are
run with a specialized staff. Management in not very keen on monitoring the information system.
2. Expansion-in which application increase rapidly. Specialization of staff and applications is
the order of the day. Management begins to take note of the new way of doing things.
3. Formalization-in which emphasis is laid on control and specialization, is built around
control. Management controls information systems.
4. Maturity-in which database oriented applications proliferate. Information is used as a
Nolan's Stages of Growth Model



• Users are • Proliferation • IT/IS is • Greater use of • IT/IS dept
"hands off" in of applications considered as database • Data in becomes
approach an important administration partners of
• Little • Greater IT/IS
function users in data
• Extensive management budget • Applications management
IT/IS planning control • Centralized are in sync
• IT/IS dept now
controls are with the •
• Cost • Huge works on a organization
applied for Applications
reduction allocation of IT/IS professional reflect real
primary focus financial utility model • Shift from information
resources • No IT/IS booking needs
• Functional • Formal
reduction in after DP to
application is in • Rapid growth IT/IS use planning and holistic • Strategic
focus of fundamental control within information planning of
use of IT • IT/IS dept management
• MIS dept/IS IT/IS
dept is not • IS/IT Applications • Steering becomes
under strict performance are often committees are important
management below incompatible widely used for
• Managers
control importation • Unhappy application of IT/IS dept
and several users development. considered at
crisis occur par with
• Use of other dept
database but

Nolan (1979) indicated that there are six stages in the information system evolutionary process. It is
an improvement over the four-stage model. The stages are:
1. Initiation- in which the organization has an operational focus and tries to get operational
efficiency and thereby limited value from the information systems.
2. Contagion-in which the organization moves towards online systems after having tasted
success in the initiation stage. More users are added.
3. Control-in which the management exercises control and makes a cost-benefit type of
4. Integration-in which the organization moves away from an ad hoc isolated solutions based
on information system to a service based information system. This is the stage when the
organization transitions from a data processing outlook about information systems to more
holistic information-based decision-making approach towards information systems. A more
comprehensive approach towards information systems results in changes in the
organization's behavior towards information systems and initiates a new appreciation for
data and information.
5. Data administration-in which the organization begins to appreciate the value of
information and makes efforts to centralize the data management to take advantage of the
benefits of information based decision-making.
6. Maturity-in which the organization creates synergies in its corporate objectives and
information systems planning so that the two can work in a synchronized manner.
These are the stages as Nolan has described in this research. However, no empirical proof exists of
this stage growth model of information system maturity.
Decision making is an essential part of any business. This is because a majority of operations in an
organization turn around decisions made by the management. In order to make decisions more
effectively, it is very important to have a good management information system since decisions are
based on information available. The effectiveness of every business information is dependent on
the timing and content of the business information presented and management actions. The need for
management information system is felt when the managers have to make proper business decisions,
the manger will have to rely on his judgment but he must have information on the basis which he
arrives at business decisions. If an organization have a significant management information system,
it is easy for an organization to take decision on the basis of available information. Good MIS
ensures good decision making just in the same way bad MIS drive the making of bad decisions.MIS
plays a crucial role in decision making through its systematic tools, timely information and
adequate managerial policies and regulations. The quality of managerial decision-making depends
upon the qualitative information and the managers should therefore develop an environment that
encourages the growth and quality information. Management information systems give managers
fast component to information. It includes interaction with other decision support systems,
information examination, cross referencing of external information and possible data removal
techniques. These systems provide information and strategic technique with practical decisions.
Finally, Management Information systems play the crucial role of providing a wide range of
alternatives from which decision makers are able to make their preferred decision. This is important
for companies in the modern day generation where any minor fall in decision making can lead to
very infinite losses.


Since the MIS plays a very important role in the organization, it creates an impact on the
organization.s functions, performance and productivity.
The impact of MIS on the functions is in its management. With a good support, the management of
marking, finance, production and personnel become more efficient. The tracking and monitoring of
the functional targets becomes easy. The functional, managers are informed about the progress,
achievements and shortfalls in the probable trends in the various aspects of business. This helps in
forecasting and long- term perspective planning. The manager.s attention is brought to a situation
which is exceptional in nature, inducing him to take an action or a decision in the matter. A
disciplined information reporting system creates a structured data and a knowledge base for all the
people in the organization. The information is available in such a form that it can be used straight
away or by blending analysis, saving the manager.s valuable time.
The MIS creates another impact in the organization which relates to the understanding of the
business itself. The MIS begins with the definition of a data entity and its attributes. It uses a
dictionary if data, entity and attributes, respectively, designed for information generation in the
organization. Since all the information system use the dictionary, there is common understanding of
terms and terminology in the organization brining clarity in the communication and a similar
understanding an even of the organization.
The MIS calls for a systemization of the business operation for an affective system design. A well
designed system with a focus on the manger makes an impact on the managerial efficiency. The
fund of information motivates an enlightened manger to use a variety of tools of the management. It
helps him to resort to such exercises as experimentation and modeling. The use of computers
enables him to use the tools techniques which are impossible to use manually. The ready-made
packages make this task simpler. The impact is on the managerial ability to perform. It improves the
decision making ability considerably. Since the MIS works on the basic systems such as transaction
processing and databases, the drudgery of the clerical work is transferred to the computerized
system, relieving the human mind for better work. It will be observed that a lot of manpower is
engaged in this activity in the organization. It you study the individual.s time utilization and its
application; you will find that seventy per cent of the time is spent in recording, searching,
processing and communication. This is a large overhead in the organization. The MIS has a direct
impact on this overhead. It creates a information- based work culture in the organization.


Management information systems (MIS) should be designed, viewing the organization as discussed
earlier. MIS design should give due weight age to the human side of the organization and its
culture. The task and technology are the physical aspects of the organization which can be
ascertained very easily. But culture and people are very difficult to assess from the design point of
view. The structure of the five sub-systems should be considered while designing the MIS. MIS
design should give reports in line with the organization structure. This means that the main decision
makers and the power centers must be recognized in the MIS. Let us discuss these aspects of the
organization structure and their implications.
In a tall hierarchy with a high degree of centralization, the MIS should give control information to
the higher management where decision making in concentrated. If the system is structured on the
functional basis where the functional head is a key decision maker and all the functions have
equally important role to play, then the MIS will have a functional design with the information
support to the functional head. Further, in such a set-up, an integrated MIS would be necessary,
reporting the corporate status of the business to the top management.
If the organization works on a standardized system where rules, policies, systems and procedures
have been laid down, then these become part of the MIS. The processing routines in the MIS
incorporate these features as an integral part. This is safe as it has already been approved by the
management of the organization. Along with the information, if the decision making responsibilities
are also clearly defied and allocated, then the MIS can produce information reports by processing
the data and summarizing the results in line with the decision maker.s position in the structure.
If the basic model of the organization is modified as a product or a project organizationnsystem,
then the MIS should focus on the management of planning and control of the multiple functions.
Besides these functions, he has to know the trouble spots and shows the interconnection with the
other functions. It must summaries all information relating to the span of control of product or
project manger. The MIS should be able to cater to the view of the product or the project manager
and also of the top management.
In the organization culture provides sufficient incentive for efficiency and results, the MIS should
support this culture by providing such information which will aid the promotion of efficiency. If the
culture encourages delegation of power and authority, then the MIS should incorporate the decision
making rules in the system. The organization system is an open system and MIS should be so
designed that it highlights the critical business, operational, technological and environmental
changes to the concerned level in the organization, so that the action can be taken to correct the
situation. The principle of the feed forward control should be extensively used as a design feature to
provide a prior warning to the decision maker. Since the organization system has a dynamic role to
play to meet the changing needs of a business, the MIS becomes a common support system for
playing the dynamic role.
When an organization is moving through the business phases of introduction, growth, maturity and
decline, MIS should provide an information support, relevant to that phase of the business cycle.
This means the designer of MIS should foresee such requirements and make the design flexible
enough to support such requirements.
The organizational learning helps to tone up the behavior of the organization. The MIS should
support the learning mechanism by identifying the cause and effect in a given situation. It should
keep the records of action and provide help to analyze the best action in a given situation. It should
be help to build various decision models for use by the managers. The information support should
be such that the group of enterprising manager should be able to improve their capabilities to
perform batter.
The design of the MIS, in isolation from organizational factors, is destined to fall as it just does not
fit into the structure. Since organization systems in the same business differ for various reasons
such as the leadership style, the management style, culture and group of people as a body and so on,
it is difficult to evolve a standard model of the MIS for a business and/or an industry.
MIS plays a very important role in creating organization behavior which in turn sets the goals for
achievement. Technology and people decide the organization structure and style of the management.


The goal of the MIS should be to provide the information which has a surprise value and which
reduces the uncertainty. It should simultaneously build the knowledge base in the organization by
processing the data obtained from different sources in different ways.
The designer of the MIS should take care of the data problems knowing that it may contain bias and
error by introduction of high level validations, checking and controlling the procedures in the
manual and computerized systems. While designing the MIS, due regard should be given to the
communication theory of transmitting the information from the source to the destination.
A special care should be taken to handle a noise and a distortion on the way to destination. The
presentation of information plays a significant role in controlling the noise and distortion which
might interrupt, while communicating information to the various destinations. The principles of
summarization and classification should be carefully applied giving regard to the levels of
management. Care should be taken in the process that no information is suppressed or
The utility of information increases if the MIS ensures that the information possesses the necessary
attributes. The redundancy of the data and the information is inevitable ob a limited scale. MIS
should use the redundancy as a measure to control the error in communication.
The information is a quality product for the organization. The quality of information as an outgoing
product can be measured on four dimensions, viz., the utility, the satisfaction, the error and the bias.
The MIS should provide specific attention to these quality parameters. A failure to do so would
result in a wasteful expenditure in the development of the MIS and poor usage of investment in the
hardware and software.
The quality can be ensured if the inputs to the MIS are controlled on the factors of impartiality,
validity, reliability, consistency and age. MIS should make a distinction between the different kinds
of information for the purpose of communication. An action, a decision-oriented information should
be distinguished from a no-action/knowledge-oriented information. The information could be of
recurring type or an ad hoc type. The MIS also needs to give regard to the information used for
planning, performance control, and knowledge database. A distinction between these factors will
help make the decisions of communications, storage and also the frequency of reporting.
Since the decision maker is a human, it requires recognizing some aspects of human capabilities in
the MIS design. These human capabilities differ from manager to manager and the designer has to
skillfully deal with them. The differences in the capabilities arise on account of the perception in
assessing the locus of the management control, the faith and the confidence in the information
versus knowledge, the risk propensity, the tolerance for ambiguity, the manipulative intelligence,
the experience in decision making and the management style.
The MIS design should be such that it meets the needs of the total organization. For design
considerations and for the operational convenience, the organization is divided into four levels, viz.,
the top, the middle, the supervisory and the operational. The top management uses the MIS for
goal-setting and strategic planning, deals with key information of a higher degree of accuracy where
the perceived value of the information is very high. As against this, the lowest level management
and the operational management uses the MIS to know the status by calling information of the
current period in detail where the perceived value of information is the lowest and it usually insists
on getting the information in a fixed format.
The MIS design, therefore, should ensure the input data quality by controlling the data for the
factors, viz. impartiality, validity, reliability, consistency and age. The data processing and the
decision making routines should be developed in such a manner that the data is processed after
thorough validation and checking, and the analysis thereof is further reported to the various levels
and individuals with due regard to the differences in the individual management style and human
Recognizing that the information may be misused if it falls into wrong hands, the MIS design
should have the features of filtering, blocking, suppressions and delayed delivery. Since, the MIS
satisfies the information needs of the people in a particular organization, the design of the MIS
cannot be common or universal for all the organizations. The principles of design and the use of the
information concepts in design does not change but when it comes to the applications, the design
has to give a regard to the organization structure, the culture, the attitudes and the beliefs of the
people and the strengths and the weaknesses of the organization.

1.23 Step by step installations of MIS in an organization

After informally analyzing your data needs and procedures, if a manager feels uncomfortable about
his or her ability to establish an MIS for the organization, he or she should engage the services of an
MIS consultant to assist in creating the system. Together, the manager and the consultant will
follow a series of steps to get an overview of the existing MIS, the way it currently functions, and
what is needed to improve it. The consultant will assist in assessing, and responding to,
organizational needs. The consultant may also help a manager decide whether computerization, or a
good manual MIS, is preferable. Whether or not a consultant is engaged, managers should review
some of the problems that may make an MIS less effective.
The following table provides a systematic way of reviewing how a well-designed MIS functions at
every level. The table can serve as a checklist for managers and consultants in creating,
institutionalizing, or revising an MIS.