Management Information System (MIS) : Faculty: by

Management Information System (MIS)
Faculty: Mr. Manish Kumar Sharma Sir Vikas,
By: Kshitiz & Himanshu
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Acknowledgement
Presenting this project in the present form, we keenly feel to recognize the obligations of the personalities behind the screen. We wish to acknowledge the encouragement and inspiration we received from our Faculty Mr. Manish Kumar Sharma. We present our heartful gratitude to our project leader, who immersed him in the subject matter and kept us simulated throughout this endeavor.
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Management Information System: Definition

MIS (management information systems) is a general term for the computer systems in an enterprise that provide information about its business operations. It's also used to refer to the people who manage these systems. Typically, in a large corporation, "MIS" or the "MIS department" refers to a central or centrally-coordinated system of computer expertise and management, often including mainframe systems but also including by extension the corporation's entire network of computer resources. The MIS program is intended to be the first step in a life-long learning experience in the exciting and dynamic field of information technology. It provides a strong foundation for advancement and success in IT careers and ventures. Basically, Management Information Systems is the study of the use of computers in business. This course shows students how Information Systems are used to support critical business operations and achieve strategic objectives. The elements or corporate technology are studied and its application to specific business situations is discussed. Students develop a small information system using Microsoft Access and use Excel as a decision support tool. In the beginning, business computers were used for the practical business of computing the payroll and keeping track of accounts payable and receivable. As applications were developed that provided managers with information about sales, inventories, and other data that would help in managing the enterprise, the term MIS arose to describe these kinds of applications. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications, project management, and database retrieval applications.
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What is Management Information System?

Management Information System is a general name for the academic discipline covering the application of information technology to business problems. As an area of study it is also referred to as Information Technology Management. The study of information systems is usually a commerce and business administration discipline, and frequently involves software engineering, but also distinguishes itself by concentrating on the integration of computer systems with the aims of the organization. The area of study should not be confused with computer science which is more theoretical in nature and deals mainly with software creation, and not with computer engineering, which focuses more on the design of computer hardware. IT service management is a practitioner-focused discipline centering on the same general domain. In business, information systems support business processes and operations, decision-making, and competitive strategies.
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Purpose & Scope of Management Information System

The Purpose and Scope of MIS can be defined as The combination of human and computer based resources that results in the collection, storage, retrieval, communication and use of data for the purpose of efficient management of operations and for business planning. In order to get a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points: Handling of a voluminous data. Confirmation of the validity of data & transaction. Complex processing of data and multi-dimensional analysis. Quick search & retrieval. Mass Storage. Communication of the information system to the user on time. Fulfilling the changing needs of the information. The management information system uses computers and communication technology to deal with these points of supreme importance.
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Role of Management Information System

The role of the MIS in an organisation can be compared to the role of heart in the body. The information is the blood and MIS is the heart. In the body, the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming pure blood, processes it and sends it to the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the organisation. The system ensures that an appropriate data is collected from the various sources, processed, and sent further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries: the managers & the top management. The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modelling Systems and Decision Support Systems. The MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing.
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Background of Management Information System

A Management Information System (MIS) is a system or process that provides the information necessary to manage an organization effectively. MIS and the information it generates are generally considered essential components of prudent and reasonable business decisions. The importance of maintaining a consistent approach to the development, use, and review of MIS systems within the institution must be an ongoing concern of both bank management and OCC examiners. MIS should have a clearly defined framework of guidelines, policies or practices, standards, and procedures for the organization. These should be followed throughout the institution in the development, maintenance, and use of all MIS. MIS is viewed and used at many levels by management. It should be supportive of the institution's longer term strategic goals and objectives. To the other extreme it is also those everyday financial accounting systems that are used to ensure basic control is maintained over financial recordkeeping activities. Financial accounting systems and subsystems are just one type of institutional MIS. Financial accounting systems are an important functional element or part of the total MIS structure. However, they are more narrowly focused on the internal balancing of an institution's books to the general ledger and other financial accounting subsystems. For example, accrual adjustments, reconciling and correcting entries used to reconcile the financial systems to the general ledger are not always immediately entered into other MIS systems. Accordingly, although MIS and accounting reconcilement totals for related listings and activities should be similar, they may not necessarily balance. An institution's MIS should be designed to achieve the following goals: Enhance communication among employees. Deliver complex material throughout the institution. Provide an objective system for recording and aggregating information. Reduce expenses related to labor-intensive manual activities. Support the organization's strategic goals and direction. Because MIS supplies decision makers with facts, it supports and enhances the overall decision making process. MIS also enhances job performance throughout an institution. At the most senior levels, it provides the data and information to help the board and management make strategic decisions. At other levels, MIS provides the means through which the institution's activities are monitored and information is distributed to management, employees, and customers. Effective MIS should ensure the appropriate presentation formats and time frames required by operations and senior management is met. MIS can be maintained and developed by either manual or Page 7 of 24
Management Information System (MIS) automated systems or a combination of both. It should always be sufficient to meet an institution's unique business goals and objectives. The effective deliveries of an institution's products and services are supported by the MIS. These systems should be accessible and useable at all appropriate levels of the organization. MIS is a critical component of the institution's overall risk management strategy. MIS supports management's ability to perform such reviews. MIS should be used to recognize, monitor, measure, limit, and manage risks. Risk management involves four main elements: Policies or practices. Operational processes. Staff and management. Feedback devices. Frequently, operational processes and feedback devices are intertwined and cannot easily be viewed separately. The most efficient and useable MIS should be both operational and informational. As such, management can use MIS to measure performance, manage resources, and help an institution comply with regulatory requirements. One example of this would be the managing and reporting of loans to insiders. MIS can also be used by management to provide feedback on the effectiveness of risk controls. Controls are developed to support the proper management of risk through the institution's policies or practices, operational processes, and the assignment of duties and responsibilities to staff and managers. Technology advances have increased both the availability and volume of information management and the directors have available for both planning and decision making. Correspondingly, technology also increases the potential for inaccurate reporting and flawed decision making. Because data can be extracted from many financial and transaction systems, appropriate control procedures must be set up to ensure that information is correct and relevant. In addition, since MIS often originates from multiple equipment platforms including mainframes, minicomputers, and microcomputers, controls must ensure that systems on smaller computers have processing controls that are as well defined and as effective as those commonly found on the traditionally larger mainframe systems. All institutions must set up a framework of sound fundamental principles that identify risk, establish controls, and provide for effective MIS review and monitoring systems throughout the organization. Commonly, an organization may choose to establish and express these sound principles in writing. The OCC fully endorses and supports placing these principles in writing to enhance effective communications throughout the institution. If however, management follows sound fundamental principles and governs the risk in the MIS Review area, a written policy is not required by the OCC. If sound principles are not effectively practiced, the OCC may Page 8 of 24
Management Information System (MIS) require management to establish written MIS policies to formally communicate risk parameters and controls in this area. Sound fundamental principles for MIS review include proper internal controls, operating procedures and safeguards, and audit coverage.
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Impact of the Management Information System

Since the MIS plays a very important role in the organisation, it creates an impact on the organisations functions, performance and productivity. The impact of MIS on the functions is in its management. With a good MIS support, the management of marketing, finance, production and personnel becomes more efficient. The tracking and monitoring of the functional target becomes easy. The MIS creates another impact in the organisation 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 of data, entity and attributes, respectively, designed for information generation in the organisation. The MIS calls for a systemisation of the business operations for an effective system design. This leads to streamlining of the operations which complicate the system design. It improves the administration of the business by bringing a discipline in its operations as everybody is required to follow and use systems & procedures. This process brings a high degree of professionalism in the business operations. Since the goals and objectives of the MIS are the products of business goals & objectives, it helps indirectly to pull the entire organisation in one direction towards the corporate goals and objectives by providing the relevant information to the people in the organisation.
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Learning Objectives of MIS

Identify the changes taking place in the form and use of decision support in E-business enterprises. Identify the role and reporting alternatives of management information systems. Describe how online analytical processing can meet key information needs of managers. Explain the decision support system concept and how it differs from traditional management information systems. Explain how executive information systems can support the information needs of executives and managers. Identify how neural networks, fuzzy logic, genetic algorithms, virtual reality, and intelligent agents can be used in business. Give examples of several ways expert systems can be used in business decision-making situations.
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The Functional Support Role in MIS

It can also be called Data Base Management System (DBMS) wherein maximum utilization in an efficient manner based on the organisational needs is obtained by analyzing, processing and referencing of Data Base. Not only for the business, but for all kinds of organisations such as Disaster Management Organisation for using it as Disaster Management Information System. Business processes and operations support function are the most basic. They involve collecting, recording, storing, and basic processing of data. Information systems support business processes and operations by:

Recording and storing accounting records including sales data, purchase data, investment data, and payroll data. Processing such records into financial statements such as income statements, balance sheets, ledgers, and management reports, etc. Recording and storing inventory data, work in process data, equipment repair and maintenance data, supply chain data, and other production/operations records. Processing these operations records into production schedules, production controllers, inventory systems, and production monitoring systems. Recording and storing such human resource records as personnel data, salary data, and employment histories. Processing these human resources records into employee expense reports, and performance based reports. Recording and storing market data, customer profiles, and customer purchase histories, marketing research data, advertising data, and other marketing records. Processing these marketing records into advertising elasticity reports, marketing plans, and sales activity reports. Recording and storing business intelligence data, competitor analysis data, industry data, corporate objectives, and other strategic management records. Processing these strategic management records into industry trends reports, market share reports, mission statements, and portfolio models.
The bottom line is that the information systems use all of the above to implement, control, and monitor plans, strategies, tactics, new products, new business models or new business ventures.
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The Decision Support Role in MIS

The business decision-making support function goes one step further. It becomes an integral part -- even a vital part -- of decisionmaking. It allows users to ask very powerful "What if?" questions: What if we increase the price by 5%? What if we increase price by 10%? What if we decrease price by 5%? What if we increase price by 10% now, then decrease it by 5% in three months? It also allows users to deal with contingencies: If inflation increases by 5% (instead of 2% as we are assuming), then what do we do? What do we do if we are faced with a strike or a new competitive threat? An organization succeeds or fails based on the quality of its decisions. The enhanced ability to explore "what if" a question is central to analyzing the likely results of possible decisions and choosing those most likely to shape the future as desired. "Business decisionmaking support function" is a phrase likely to quicken the pulse of no one but an accountant, but, in fact, it is all about turning wonderful dreams into solid realities.
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The Communication Decision Support System Role

Information systems can support a company's competitive positioning. Here are three levels of analysis: The supports for help in piloting the chain of internal value. They are the most recent and the most pragmatic systems within the reach of the manager. They are the solutions to reductions of costs and management of performance. They are typically named "Business Workflow Analysis" (BWA) or of "Business Management Systems p2p". Tool networks, they ensure control over piloting the set functions of a company. The real-time mastery in the costs of dysfunctions cause distances from accounts, evaluation and accounting that are presented in the evaluation and qualitative reports. All successful companies have one (or two) business functions that they do better than the competition. These are called core competencies. If a company's core competency gives it a long term advantage in the marketplace, it is referred to as a sustainable competitive advantage. For a core competency to become a sustainable competitive advantage it must be difficult to mimic, unique, sustainable, superior to the competition, and applicable to multiple situations. Other examples of company characteristics that could constitute a sustainable competitive advantage include: superior product quality, extensive distribution contracts, accumulated brand equity and positive company reputation, low cost production techniques, patents and copyrights, government protected monopoly, and superior employees and management team. The list of potential sustainable competitive advantage characteristics is very long. However, some experts hold that in today's changing and competitive world, no advantage can be sustained in the long run. They argue that the only truly sustainable competitive advantage is to build an organization that is so alert and so agile that it will always be able to find an advantage, no matter what changes occur. Information systems often support and occasionally constitute these competitive advantages. The rapid change has made access to timely and current information critical in a competitive environment. Information systems, like business environmental scanning systems, support almost all sustainable competitive advantages. Occasionally, the information system itself is the competitive advantage. One example is Wal-Mart. They used an extranet to integrate their whole supply chain. This use of information systems gave Sam Walton a competitive advantage for two decades. Another example is Dell Computer. They used the internet to market custom assembled PC's. Michael Dell is still benefiting from this low-
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Management Information System (MIS) cost promotion and distribution technique. Other examples are eBay, Amazon.com, Federal Express, and Business Workflow Analysis.
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The Performance Monitoring Role in MIS

MIS are not just statistics and data analysis, but also assessment of human capabilities. They have to be used as an MBO (Management by objectives) tool. They help: To establish relevant and measurable objectives, To monitor results and performances (reach ratios). To send alerts, in some cases daily, to managers at each level of the organization, on all deviations between results and pre-established objectives and budgets. The Management Information System Group develops, maintains and operates software managing a large scope of general purpose data. The applications enable: On-site users to process orders, manage budgets, assets and stocks. The world-wide ESRF user community to process scientific proposals, reports, a forms, and safety aspects related to experiments, statistics and soon experiment scheduling.
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Potential Benefits of MIS Investments

Investing in information systems can pay off for a company in many ways. Such an investment can support a core competency. Great companies invariably have one or two core competencies, something they can do better than anyone else. This could be anything from new product development to customer service. It is the heart of the business and no matter what it is; information technology can support that core competency. An IT investment in a company's core competency can create a significant barrier to entry for other companies, defending the organization's primary turf and protecting its markets and profits. It can build supply chain networks. Firms that are a part of an integrated supply chain system have established relationships of trust with suppliers. This means faster delivery times, problem-free delivery and an assured supply. It can also mean price discounts and other preferential treatment. The inability of new entrants to get onto a supply chain/inventory management system can be a major barrier to entry. It can enhance distribution channel management. As with supplier networks, investment in distribution channel management systems can ensure quicker delivery times, problem free delivery, and preferential treatments. When the distribution channel management system is exclusive, it can mean some control over access to retailers, and, once more, a barrier to entry. Such an IT investment can help build brand equity. To build a brand, firms often invest huge sums in advertising. A huge brand name is a formidable barrier to enter and sustaining it can be facilitated by investment in marketing information systems and customer relationship management system. Information systems can mean better production processes. Such systems have become essential in managing large production runs. Automated systems are the most cost efficient way to organize large scale production. These can produce economies of scale in promotion, purchasing, and production; economies of scope in distribution and promotion; reduced overhead allocation per unit; and shorter break-even times more easily. This absolute cost advantage can mean greater profits and revenue. IT investment can boost production processes. Information systems allow company flexibility in its output level. Michael Porter claims that economies of scale are a barrier to entry, aside from the absolute cost advantages they provide. This is because, a company producing at a point on the long-run Page 17 of 24
Management Information System (MIS) average cost curve where economies of scale exist has the potential to obtain cost savings in the future, and this potential is a barrier to entry. Implementing IT experience can leverage learning curve advantages. As a company gains experience using IT systems, it becomes familiar with a set of best practices that are more or less known to other firms in the industry. Firms outside the industry are generally not familiar with the industry specific aspects of using these systems. New entrants will be at a disadvantage unless they can redefine the industries best practices and leap-frog existing firms. IT investment can impact mass customization production processes. IT controlled production technology can facilitate collaborative, adaptive, transparent, or cosmetic customization. This flexibility can increase margins and increase customer satisfaction. Leverage IT investment in computer aided design (1). CAD systems facilitate the speedy development and introduction of new products. This can create proprietary product differences. Product differentiation can be a barrier to entry. Proprietary product differences can be used to create incompatibilities between competing products (as every computer user knows). These incompatibilities increase consumers switching costs. High customer switching costs is a very valuable barrier to entry (Hey, it worked for Bill Gates.) It means expanded E-commerce. Company web sites can be personalized to each customers interests, expectations, and commercial needs. They can also be used to create a sense of community. Both of these tend to increase customer loyalty. Customer loyalty is an important barrier to entry. Information systems leverage stability. Technologically sophisticated firms with multiple electronic points of contact with customers, suppliers, and others enjoy greater stability. This monumental appearance of stability can be a barrier to entry, especially in financial services.
The simple fact that IT investment takes a significant amount of money makes it a barrier to entry. Anything that increases capital requirements is -- guess what? -- A barrier to entry.
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Historical Development
The role of business information systems has changed and expanded over the last four decades. In the incipient decade (1950s and '60s), elecsystems could be afforded by only the largest organizations. They were used to record and store bookkeeping data such as journal entries, specialized journals, and ledems were used to generate a limited range of predefined reports, including income statements (they were called P & Ls back then), balance sheets and sales reports. They were trying to perform a decision making support role, but they were not up to the task. By the 1970s decision support systems were introduced. They were interactive in the sense that they allowed the user to choose between numerous options and configurations. Not only was the user allowed customizing outputs, they also could configure the programs to their specific needs. There was a cost though. As part of your mainframe leasing agreement, you typically had to pay to have an IBM system developer permanently on site. The main development in the 1980s was the introduction of decentralized computing. Instead of having one large mainframe computer for the entire enterprise, numerous PCs were spread around the organization. This meant that instead of submitting a job to the computer department for batch processing and waiting for the experts to perform the procedure, each user had their own computer that they could customize for their own purposes. Many poor souls fought with the vagaries of DOS protocols, BIOS functions, and DOS batch programming. As people became comfortable with their new skills, they discovered all the things their system was capable of. Computers, instead of creating a paperless society, as was expected, produced mountains of paper, most of it valueless. Mounds of reports were generated just because it was possible to do so. This information overload was mitigated somewhat in the 1980s with the introduction of executive information systems. They streamlined the process, giving the executive exactly what they wanted, and only what they wanted. The 1980s also saw the first commercial application of artificial intelligence techniques in the form of expert systems. These programs could give advice within a very limited subject area. The promise of decision making support, first attempted in management information systems back in the 1960s, had step-by-step, come to fruition. The 1990s saw the introduction of the Strategic information system. These systems used information technology to enable the concepts of business strategy developed by scholars like M. Porter, T Peters, J. Reise, C. Markides, and J. Barney in the 1980s. The sustainability of these applications has since been called into question by N. Carr, which Piccoli and Ives, among others, have countered.
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Management Information System (MIS) The role of business information systems had now expanded to include strategic support. The latest step was the commercialization of the Internet, and the growth of intranets and extranets at the turn of the century.
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Conclusion
Through the MIS, the information can be used as a strategic weapon to counter the threats to business, make businesses more competitive, and bring about the organisational transformation through integration. A good MIS also makes an organisation seamless by removing all the communication barriers.
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Bibliography
Wikipedia Online Encyclopedia Microsoft Encarta Reference Library Google Search Engine AltaVista Search Engine Ask.com Search Engine
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Remarks
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Than ks
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