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Definition of MIS

Management Information System is a system that aids management in making,

carrying out and controlling decisions. MIS consists of people, equipment and

procedure to gather, sort, analyze, evaluate and distribute timely and accurate

information to the decision maker.

Nature of MIS

Report orientation: Through MIS, every individual can perform their duty and

the system automatically produces performance reports to send for

evaluation to the next level of hierarchy according to the company and

system specifications and / or requirements.

Action oriented: MIS performs regulating and scheduled actions on behalf of

the user as the system is customized on the basis of need and requirements

at the users end.

Expectation oriented: The reports and automatic transactions are expected

from a CBS (Computer Based System).

Database oriented: Almost every MIS software is based on a Database

backbone to support efficient storage and retrieval of data to and from the

system respectively simultaneously and concurrently from more than one

workstation at a time.

End-user oriented: Main emphasis is given on the end-user, who uses the

system. The system must be understandable and easy to access for the enduser for a seamless operation of the system.

Benefits from MIS

It provides timely, accurate, scientific reliable and permanent information

It avoids duplication of efforts

Coordinates the whole organization

It provides the information in the form and format as required by the

information seeker

Helps in making better and scientific decisions by the management

Processing and retrieval speeds are increased considerably

The scope for the information technology is expanded

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Limitations of MIS

Quality of operation of MIS depends on quality of input

MIS is not a perfect substitute for an effective management

MIS may not have requisite flexibility to quickly update itself with the

changing needs of time, especially in complex environments

MIS cannot provide tailor made information packages suitable for the purpose

of every kind of decision making scenario

MIS takes only quantitative factors into account

It is not very effective in non-programmed decision making cases

Framework of MIS / Needs to have MIS

Input of MIS

Strategic plan or corporate policies

Contains major financial objectives and often projects financial needs.

Transaction processing system (TPS)

Important financial information collected from almost every TPS -

payroll, inventory control, order processing, accounts payable,

accounts receivable, general ledger.

External sources

Annual reports and financial statements of competitors and general

news items.

Output of MIS

Scheduled reports

Produced periodically, or on a schedule (daily, weekly, monthly)

Key-indicator report

Summarizes the previous days critical activities Typically available at the beginning of each day

Demand report

Gives certain information at a managers request

Exception report

Automatically produced when a situation is unusual or requires

management action

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Subsystems and Interconnected systems of MIS

Financial

o Provides financial information to all financial managers within an

organization

o Inputs

Strategic plan or corporate policies

Contains major financial objectives and often projects

financial needs.

Transaction processing system (TPS)

Important financial information collected from almost

every TPS - payroll, inventory control, order processing,

accounts payable, accounts receivable, general ledger.

External sources

Annual reports and financial statements of competitors

and general news items.

o Outputs

Profit/loss and cost systems

Auditing

Internal auditing

External auditing

Uses and management of funds

Manufacturing

o Inputs

Strategic plan or corporate policies. The TPS:

Order processing

Inventory data

Receiving and inspecting data

Personnel data

Production process

External sources

o Outputs

Design and engineering

Master production scheduling

Inventory control

Manufacturing resource planning

Just-in-time inventory and manufacturing

Process control

Computer-integrated manufacturing (CIM)

Quality control and testing

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Marketing

o Supports managerial activities in product development, distribution,

pricing decisions, and promotional effectiveness

o Inputs

Strategic plan and corporate policies

The TPS

External sources:

The competition

The market

o Outputs

Marketing research

Product development

Promotion and advertising

Product pricing

Human Resource

o Concerned with all of the activities related to employees and potential

employees of the organization

o Inputs

Strategic plan or corporate policies

The TPS:

Payroll data

Order processing data

Personnel data

External sources

o Outputs

Human resource planning

Personnel selection and recruiting

Training and skills inventory

Scheduling and job placement

Wage and salary administration

Accounting MISs

o Provides aggregated information on accounts payable, accounts

receivable, payroll, and other applications.

Geographic information systems (GISs)

o Enables managers to pair pre-drawn maps or map outlines with tabular

data to describe aspects of a particular geographic region.

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Difference between DSS and MIS

The terms MIS and DSS stand for Management Information Systems and Decision

Support Systems respectively.

MIS is basically a kind of link to facilitate communication between managers across

different areas in a business organization. MIS plays a pivotal role in enabling

communications across the floor of an organization, between various entities

therein.

DSS, many consider, is advancement from the original MIS. However, this is not the

sole difference between the two. While there may not be too much separating the

two, the difference is still there, as is apparent when we say DSS is an advancement

over MIS.

The essential difference between the two is in focus. DSS, as the term indicates, is

about leadership and senior management in an organization providing good,

reliable judgment as well as vision. MIS, on the other hand, is about focusing on the

actual flow of information itself.

It is often said that MIS and TPS are subsystems of a total CBIS that feeds data in

lateral and integrated manner to the DSS system. Where MIS is more strict and

format oriented in contract with DSS which is more flexible as the ultimate decision

maker after all is a human.

Transaction Processing Systems (TPS)

A Transaction Processing System is a set of information which processes the

data transaction in database system that monitors transaction programs (a special

kind of program). The essence of a transaction program is that it manages data that

must be left in a consistent state. E.g. if an electronic payment is made, the amount

must be either both withdrawn from one account and added to the other, or none at

all. In case of a failure preventing transaction completion, the partially executed

transaction must be 'rolled back' (undo) by the TPS.

Features

Rapid response

Reliability

Inflexibility

Controlled processing

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