information system unit 2

 

UNIT-2 MANAGEMENT INFORMATION SYSTEM

INTRODUCTION:-

MIS is the use of information technology, people, and business processes to record, store and process data

to produce information that decision makers can use to make day to day decisions. The full form of MIS

is Management Information Systems. The purpose of MIS is to extract data from varied sources and derive

insights that drive business growth.

The three components of MIS provide a more complete and focused definition, where System suggests

integration and holistic view, Information stands for processed data, and Management is the ultimate user,

the decision makers.

Management information system can thus be analysed as follows –

Management: Management covers the planning, control, and administration of the operations of a concern.

The top management handles planning; the middle management concentrates on controlling; and the lower

management is concerned with actual administration.

Information: Information means the processed data that helps the management in planning, controlling and

operations. Data means all the facts arising out of the operations of the concern. Data is processed i.e.

recorded, summarized, compared and finally presented to the management in the form of MIS report.

System: Data is processed into information with the help of a system. A system is made up of inputs,

processing, output and feedback or control.

Thus MIS means a system for processing data in order to give proper information to the management for

performing its functions.

DEFINITION OF MIS:-

1. Management Information System or 'MIS' is a planned system of collecting, storing, and disseminating

data in the form of information needed to carry out the functions of management.

2. The MIS is defined as a system which provides information support for decision-making in the

organization.

3. The MIS is defined as an integrated system of man and machine for providing the information to

support the operations, the management and the decision-making function in the organization.

4. The MIS is defined as a system based on the database of the organization evolved for the purpose of

providing information to the people in the organization.

5. The MIS is defined as a computer-based information system.

OBJECTIVES OF MIS:-

The goals of an MIS are to implement the organizational structure and dynamics of the enterprise for the

purpose of managing the organization in a better way and capturing the potential of the information system

for competitive advantage. Following are the basic objectives of an MIS –

1. Capturing data

2. Processing data

3. Information storage

4. Information retrieval

5. Information propagation

 

1. Capturing Data: Capturing contextual data, or operational information that will contribute in decision

making from various internal and external sources of organization.

2. Processing Data: The captured data is processed into information needed for planning, organizing,

coordinating, directing and controlling functionalities at strategic, tactical and operational level.

Processing data means − making calculations with the data; sorting data; classifying data and

summarizing data.

3. Information Storage: Information or processed data need to be stored for future use.

4. Information Retrieval: The system should be able to retrieve this information from the storage as

and when required by various users.

5. Information Propagation: Information or the finished product of the MIS should be circulated to its

users periodically using the organizational network.

CHARACTERISTICS OF MIS:-

1. It should be based on a long-term planning.

2. It should provide a holistic view of the dynamics and the structure of the organization.

3. It should work as a complete and comprehensive system covering all interconnecting sub-systems

within the organization.

4. It should be planned in a top-down way, as the decision makers or the management should actively

take part and provide clear direction at the development stage of the MIS.

5. It should be based on need of strategic, operational and tactical information of managers of an

organization.

6. It should also take care of exceptional situations by reporting such situations.

7. It should be able to make forecasts and estimates, and generate advanced information, thus providing

a competitive advantage. Decision makers can take actions on the basis of such predictions.

8. It should create linkage between all sub-systems within the organization, so that the decision makers

can take the right decision based on an integrated view.

9. It should allow easy flow of information through various sub-systems, thus avoiding redundancy and

duplicity of data. It should simplify the operations with as much practicability as possible.

10. Although the MIS is an integrated, complete system, it should be made in such a flexible way that it

could be easily split into smaller sub-systems as and when required.

11. A central database is the backbone of a well-built MIS.

FUNCTIONS OF MIS:-

1. Integrated database of the management information system enables greater flexibility in meeting the

information needs of the management.

2. The MIS integrates the information flow between functional areas.

3. MIS caters to the information needs of all levels of management.

4. Management’s information needs are supported on a more timely basis with the MIS.

 

ADVANTAGES & DISADVANTAGES OF MIS:-

Modern businesses have been leveraging management information systems (MIS) to manage, order, organize

and manipulate the gigabytes and masses of information generated for various purposes. MIS helps businesses

optimize business processes, address information needs of employees and various stakeholders and take

informed strategic decisions. However, budget allocation and monitoring issues can affect the efficacy of MIS.

It has its advantages and disadvantages depending on organizational deployment and usage.

Advantages:

1. It Facilitates planning: MIS improves the quality of plans by providing relevant information for

sound decision - making. Due to increase in the size and complexity of organizations, managers have

lost personal contact with the scene of operations.

2. In Minimizes information overload: MIS change the larger amount of data in to summarize form

and there by avoids the confusion which may arise when managers are flooded with detailed facts.

3. MIS Encourages Decentralization: Decentralization of authority is possibly when there is a system

for monitoring operations at lower levels. MIS is successfully used for measuring performance and

making necessary change in the organizational plans and procedures.

4. It brings Co-ordination: MIS facilities integration of specialized activities by keeping each

department aware of the problem and requirements of other departments. It connects all decision

centres in the organization.

5. It makes control easier: MIS serves as a link between managerial planning and control. It improves

the ability of management to evaluate and improve performance. The used computers has increased

the data processing and storage capabilities and reduced the cost.

6. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information.

Disadvantages:

1. Highly sensitive requires constant monitoring.

2. Budgeting of MIS extremely difficult.

3. Quality of outputs governed by quality of inputs.

4. Lack of flexibility to update itself.

5. Effectiveness decreases due to frequent changes in top management.

PHYSICAL VIEW OF MIS:-

 

The physical view of MIS can be seen as assembly of several subsystems based on the databases in the

organisation. These subsystems range from data collection, transaction processing and validating, processing,

analysing and storing the information in databases. The subsystems could be at a functional level or a corporate

level. The information is evolved through them for a functional or a departmental management and it provides

the information for the management of business at the corporate level. All the systems shown in the above

diagram together are MISs.

CONCEPTUAL VIEW OF MIS:-

The concept is a blend of principles, theories and practices of management, information and system giving

rise to a single product called MANAGEMENT INFORMATION SYSTEM.

The concept of management gives high regard to the individual and his ability to use the information. MIS

gives information through data analysis. While analysing the information, it relies on many academic

disciplines like management science, OR, organization behaviour, psychology, etc.

The foundation of MIS is the principles of management and its practices. MIS uses the concept of management

control in its design and relies heavily on the fact that the decision maker is a human being and is a human

processor of information. A MIS can be evolved for a specific objective it is evolved after systematic planning

and design. It calls for an analysis of business, management views and policies, organization culture ssand the

management style. The MIS, therefore relies heavily on systems theory. The systems theory offers solutions

to handle complex situations of the input and output flows. It uses theory of communication which helps to

evolve a system design capable of handling data inputs, process, and the outputs with the least possible noise

or distortion in transmitting the information from a source to destination.

ROLE OF MIS:-

The role of the MIS in an organization 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 work faster and supplies more blood when needed. It regulates and

controls the incoming impure blood, processed it and sends it to the destination in the quantity needed. It

fulfils the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly

the same role in the organization. The system ensures that an appropriate data is collected from the various

sources, processed and send further to all the needy destinations. The system is expected to fulfil the

information needs of an individual, a group of individuals, the management functionaries: the managers and

top management.

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Here are some of the important roles of the MIS:

1. The MIS satisfies the diverse needs through variety of systems such as query system, analysis system,

modelling system and decision support system.

2. The MIS helps in strategic planning, management control, operational control and transaction processing.

The MIS helps in the clerical personal in the transaction processing and answers the queries on the data

pertaining to the transaction, the status of a particular record and reference on a variety of documents.

3. The MIS helps the junior management personnel by providing the operational data for planning,

scheduling and control , and helps them further in decision-making at the operation level to correct an out

of control situation.

4. The MIS helps the middle management in short term planning, target setting and controlling the business

functions. It is supported by the use of the management tools of planning and control.

5. The MIS helps the top level management in goal setting, strategic planning and evolving the business

plans and their implementation.

6. The MIS plays the role of information generation, communication, problem identification and helps in

the process of decision-making. The MIS, therefore, plays a vital role in the management, administration

and operation of an organization.

IMPACT OF MIS:-

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 MIS

supports the management of marketing, finance, production and personnel becomes 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 activity and the targets. The manager is kept alert by providing

certain information indicating and probable trends in the various aspects of business.

This helps in forecasting and long-term perspective planning. The manager’s attention is bought to a situation

which is expected in nature, inducing him to take an action or a decision in the matter. Disciplined information

reporting system creates structure database 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 by blending and 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 data, entity and its attributes. It uses a dictionary of data, entity and

attributes, respectively, designed for information generation in the organization. Since all the information

systems use the dictionary, there is common understanding of terms and terminology in the organization

bringing clarity in the communication and a similar understanding of an event in the organization.

The MIS calls for a systematization of the business operations for an effective system design. This leads to

streaming of the operations which complicates 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 and

procedures. This process brings a high degree of professionalism in the business operations.

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The goals and objectives of the MIS are the products of business goals and objectives. It helps indirectly to

pull the entire organization in one direction towards the corporate goals and objectives by providing the

relevant information to the organization. A well designed system with a focus on the manager makes an impact

on the managerial efficiency.

The fund of information motivates an enlightened manager to use a variety of tools of the management. It

helps him to resort to such exercises as experimentation and modelling. The use of computers enables him to

use the tools and techniques which are impossible to use manually. The ready-made packages make this task

simple. The impact is on the managerial ability to perform. It improves decision-making ability considerably

high.

TYPES OF SYSTEMS:-

There are types of Management Information System that made to enhance the communication among

employees and managers. These types are:

1. Transaction Processing System

2. Management Information System

3. Decision Support System

4. Executive Information System

1. TRANSACTION PROCESSING SYSTEM:-

Functions: It involve the collection and recovering of all the transaction data to support the management

of operations. It updates history files. It prepares summarized & processed transaction. It generates

detailed transaction reports.

Application areas: Banking system and Sales accounting system.

Users of the system: Lower-level management of the system and it is operated by workers.

Benefits: It stores all transactions. It helps to trace out the problem, It gives current status of all the

organizational entities.

2. MANAGEMENT INFORMATION SYSTEM:-

Functions: It makes use of output from the TPS as input and generates meaningful reports.

Application areas: Marketing, production, personnel departments.

Users of the system: Middle level management and it is used by the Middle Managers to help them

operate their business well in an easy way.

Benefits: It helps in planning and decision making. It is suitable for analysis.

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3. DECISION SUPPORT SYSTEM:-

It support decision making activities in the organization that used by Senior Managers. Gathering

information and exchanging of information within the organization might efficiently help the

management make business decisions quickly.

Functions: This system makes use of internal data from MIS for studying trends and the external data

is collected from environment to understand the environment.

Application areas: Production planning control system.

Users of the system: Senior Managers.

Benefits: It helps to prepare analytical and planning models. It assists top level management in decision

making.

4. EXECUTIVE INFORMATION SYSTEM:-

It found at the top of the pyramid which operated by Executives. It monitors and support the information

needed. In this type, you can easily access to the internal and as well as the external information that is

closely connected to the organizational goals. It is structured & automated system provides rapid access

to timely information & management reports. This system is supported with online information services

such as electronic mail to keep the management updated with all current happenings in major areas.

Main features: User-friendly, fast and updated with graphics & reports.

MIS Vs DATA PROCESSING STRUCTURE OF MIS:- (it includes transaction processing system)

SYSTEM CONCEPTS IN MIS:- (it is mentioned in unit-1 information systems)

PLANNING AND CONTROL PROCESS:-

PLANNING PROCESS:-

The steps generally involved in planning process are as follows:

1. Establishing verifiable goals or set of goals to be achieved

2. Establishing planning premises

a. Internal and external premises

b. Tangible and intangible premises

c. Controllable and non-controllable premises

3. Deciding the planning period

a. Lead time in development and commercialisation of a new product

b. Time required to recover capital investments or the pay-back period

c. Length of commitments already made

4. Finding alternative courses of action

5. Evaluating and selecting a course of action

6. Developing derivative plans

7. Establishing and deploying action plans

8. Measuring and controlling the progress

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1. Establishing verifiable goals or set of goals to be achieved:

The first step in planning is to determine the enterprise objectives. These are set by upper level or top

managers, usually after a number of possible objectives have been carefully considered.

There are many types of objectives managers may select: a desired sales volume or growth rate, the

development of a new product or service, or even a more abstract goal such as becoming more active in the

community.

The type of goal selected will depends on a number of factors: the basic mission of the organisations, the

values its manager hold, and the actual and potential abilities of the organisation.

2. Establishing planning premises:

The second step in planning is to establish planning premises, i.e., certain assumptions about the future on

the basis of which the plan will be ultimately formulated.

Future assumptions such as population trends, the general economic conditions, production cost and prices,

probable competitive behaviour, capital and material availability, and government control and so on.

Planning premises can be classified as under:

a. Internal and external premises:

Premises may exist within or outside the company.

Internal premises include: sales forecast, policies and programmes of the organisation, capital

investment in plant and equipment, capability of management, skill of the labour force, other

resources and abilities of the organisation in the form of machines, money and methods, behaviour

and the values of the owners and employees of the organisation.

External premises include: general business and economic environment, technological changes,

government policies and regulations, population growth, potential stability, sociological factors and

demand for industry’s product.

b. Tangible and intangible premises:

Tangible premises are those which can be quantitatively measured while intangible premises are

those which can be qualitatively measured.

Population growth, industry demand, capital and resources invested in the organisation are all

tangible premises whose quantitative measurement is possible.

On the other hand, political stability, sociological factors, business and economic environment,

attitudes, philosophies and behaviour of the owners of the organisation are all intangible premises

whose quantitative measurement is not possible.

c. Controllable and non-controllable premises:

Controllable factors are those which can be controlled and normally cannot upset well-thought out

calculations of the organisation regarding the plan.

Examples of controllable factors are: the company’s advertising policy, capability of management

members, skill of the labour force, availability of resources in terms of capital and labour, attitude

and behaviour of the owners of the organisation etc.

Examples of uncontrollable factors: strikes, wars, natural calamities, emergency etc.

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3. Deciding the planning period:

Once upper-level managers have selected the basic long-term goals and the planning premises, the next

task is to decide the period of plan. Businesses varies according to their planning period. In some instances,

plans are made for a year only while in others they span decades. There is always some logic in selecting

a particular time range for planning.

Factors which influence the choice of period are as follows:

a. Lead time in development and commercialisation of a new product:

For example, a heavy engineering company planning to start a new project should have a planning

period of, say, 5 years with 1 or 2 years for starting, engineering and development and as many more

years for production and sales. On the other hand, a small manufacturer of spare parts who can

commercialise his idea in a year or so need to make annual plans only.

b. Time required to recover capital investments or the pay-back period:

These are the number of years over which the number of investment expenditure will be recovered

or paid back from the cash inflow, if the estimates turn out to be correct. If a machine costs Rs. 10

lakh and generates cash inflow of Rs. 2 lakh a year, it has a pay-back period of five years. Therefore,

the plan should also be for at least five years.

c. Length of commitments already made:

The plan period, as far as possible, be long enough to enable the fulfilment of commitments already

made. For example, if a company has agreed to supply goods to the buyers for 5 years or has agreed

to work out mines for 10 years, it also needs to plan for the same period to fulfil its commitments.

However, if the length of commitment is somehow be reduced, the plan period can also be reduced.

4. Finding alternative courses of action:

The fourth step in planning is to search for and examine alternative courses of action. For example,

technical know-how may be secured by engaging a foreign technician or by training staff abroad. Similarly,

products may be sold directly to the consumer by the company’s salesman or through exclusive agencies.

5. Evaluating and selecting a course of action:

The fifth step is to evaluate them in the light of the premises and goals and to select the best course or

courses of action. This is done with the help of quantitative techniques and operational research.

6. Developing derivative plans:

Once the plan for the organisation has been formulated, middle and lower-level managers must draw up

the appropriate plans for their sub-units. These are the plans required to support the basic plan. Thus, where

an airline decides to acquire a fleet of new planes, a number of derivative plans dealing with the hiring and

training of various types of personnel, the purchase of spare parts, the development of maintenance

facilities, scheduling, advertising, financing and insurance need to be drawn up.

In developing these derivative plans, lower-level managers take steps similar to those taken by upper-level

managers: selecting realistic goals, assessing their sub-units particular strengths and weaknesses and

analysing those parts of the environment that can affect them.

7. Establishing and deploying action plans:

Managers possessing little understanding of how the organisation operates, may not know how to turn the

derivative plans into action. The action plan specifies that who, what, when, where and how of each action

item. A draft version of the action plan should be communicated to inform those directly affected and gain

their cooperation.

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8. Measuring and controlling the progress:

The process of monitoring and controlling is a critical part of any plan. Managers need to check the progress

of their plan so that they can: (a) take whatever remedial action is necessary to make the plan work, or, (b)

change the original plan if it is realistic.

CONTROL PROCESS:-

The control process is the system that allows setting, measure, and match any business activities such as

production, packaging, delivery and more.

Controlling is an essential part of management process. In fact; without the control process entire management

is obsolete (our-dated). Because you will not be able to know how your plan is working, is it fully

implemented?

The control process is the functional process for organizational control that arises from the goals and strategic

plans of the organization.

The 4 Steps of Control Process are:

1. Establishing standards and methods for measuring performance.

2. Measuring performance.

3. Determining whether performance matches the standard.

4. Taking corrective action.

1. Establishing Standards and Methods for Measuring Performance:

Standards means the criteria of performance. They are the selected points in an entire planning program at

which performance is measured so that managers can receive signals about how things are going and thus

do not have to watch every step in the execution of plans. Standard elements form precisely worded,

measurable objectives and are especially important for control.

In an industrial enterprise, standards could include sales and production targets, work attendance goals,

safety records, etc.

In service industries, standards might include several time customers have to wait in the queue at a bank or

the number of new clients attracted by a revamped advertising campaign.

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2. Measuring the Performance:

The measurement of performance against standards should be done on a forward-looking basis so that

deviations may be detected in advance of their occurrence and avoided by appropriate actions.

Several methods are used for measuring the performance of the organization.

If standards are appropriately drawn and if means are available for determining exactly what subordinates

are doing, evaluation of actual or expected performance is fairly easy. But there are many activities for

which it is difficult to develop accurate standards, and there are many activities that are hard to measure.

It may be quite simple, for example, to establish labour-hour standards for the production of a mass-

produced item and it may be equally simple to measure performance against these standards, but in the less

technical kinds of work.

For example, controlling the work of the industrial relations manager is not easy because definite standards

cannot be easily developed. The superior of this type of manager often rely on vague standards, such as the

attitude of labour unions, the enthusiasm, and loyalty of subordinates, the index of labour turnover and/or

industrial disputes, etc. In such cases, the superior’s measurements are often equally unclear.

3. Determining whether Performance Matches the Standard:

Determining whether performance matches the standard is an easy but important step in the control process.

It involves comparing the measured results with the standards already set. If performance matches the

standard, managers may assume that “everything is under control”. In such a case the managers do not have

to intervene in the organization’s operations.

4. Taking Corrective Action:

This step becomes essential if performance falls short of standards and the analysis indicates that corrective

action is required. The corrective action could involve a change in one or more activities of the

organization’s operations.

For example, the branch manager of a bank might discover that more counter clerks are needed to meet the

five-minute customer-waiting standard set earlier.

Control can also reveal inappropriate standards and in that case, the corrective action could involve a

change in the original standards rather than a change in performance. It needs to be mentioned that, unless

managers see the control process through to its conclusion, they are only monitoring performance rather

than exercising control. The emphasis should always be on planning constructive ways to bring

performance up to a standard rather than just identifying a past failure.

STRATEGIC PLANNING PROCESS:-

The eight steps of the strategic planning process of a large organisation that engages in this process every year

and begins the process with the lessons learned from the previous years. It is useful to remember here that

small organisation with limited resources tend to be less detailed. They may informally think through some of

these steps and reduce their number.

1. Evaluate and improve last year’s strategic plan process by building into it the deployment lessons learned

during last year.

2. Reaffirm (repeat) the organisation’s vision, mission, values and objectives, which form the foundation for

the strategic plan.

3. Review organisation’s operational performance for the prior year to know its key strengths and weakness.

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4. Evaluate the external environment to prepare for each environmental element (such as products, service,

marketing, competitive advantage and technological approach) a list of potential opportunities and threats.

5. Conduct SWOT (Strengths, Weakness, Opportunities and Threats) analysis based upon the issues

identified in step 1, 3 and 4 and forecast the results of continuing the existing strategy.

6. Identify, evaluate and select alternative approaches if a change in the existing strategy spears necessary.

Thus, new markets may be entered, key products may be redesigned to enhance quality or reduce cost,

new investments may be undertaken or old ones terminated and so on.

7. Deploy the modified plan; which means communicate it to all departmental heads and stakeholders for

aligning their action, measures and goals via derivative plan, programmes and budget. Effective alignment

requires common understanding of purposes and goals and use of complementary measures and

information for planning, tracking, analysis and improvement at each level.

8. Provide for updates and tracking to be conducted throughout the year.

Difference between Strategic and Tactical planning:

Strategic Planning Tactical Planning

1. It deals with the long-term concept of the

organisation, which is based on its vision,

mission and objectives.

1. It deals with the short-term allocation of

resources for implementing the strategy.

2. Its emphasis is on doing the right things, i.e.,

effectiveness.

2. Its emphasis is on doing things rightly, i.e.,

efficiency.

3. It is done by top-level corporate managers

(including the planning staff)

3. It is done by lower level managers.

4. Its success depends on the judgement,

experience, intuition and well-guided

discussions of the top management team.

4. Its success depends on staff work and

mathematical work.

5. It is more prone to unanticipated factors that may

erupt to change the situation.

5. It has greater element of certainty.

LIMITATIONS OF PLANNING:-

1. Planning is an expensive and time-consuming process.

2. Planning sometimes restricts the organisation to the most rational and risk-free opportunities.

3. The scope of planning is said to be limited in the case of organisations with rapidly changing situations.

4. Establishment of advance plans tends to make administration inflexible.

5. There is the difficulty of formulating accurate premises.

6. Planning may sometimes face people’s resistance to it.

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MANAGEMENT CONTROL THROUGH REPORTING:-

An MIS report is a tool managers use to evaluate business processes and operations.

What is an MIS Report?

Pretend you are the manager of a medium-sized company's customer service department. Your staff takes

phone calls and emails from over 300 customers every day. For the most part, they do a very good job, but

recently, customers have started to complain that it takes too long to get their questions answered. Upper

management at your company is concerned about this and wants to know what they can do to fix the problem.

But before they make a decision, they need you to give them more information. How will you do this?

This is where MIS reports come in. MIS stands for management information system. Business managers at

all levels of an organization, from assistant managers to executives, rely on reports generated from these

systems to help them evaluate their business' daily activities or problems that arise, make decisions, and track

progress. MIS system reporting is used by businesses of all sizes and in every industry.

Who Uses MIS Reports?

MIS systems automatically collect data from various areas within a business. These systems are capable of

producing daily reports that can be sent to key members throughout the organization. Most MIS systems can

also generate on-demand reports. On-demand MIS reports allow managers and other users of the system to

generate an MIS report whenever they need it.

Many large businesses have specialized MIS departments, whose only job is to gather business information

and create MIS reports. Some of these businesses use sophisticated computing technology and software to

gather information. However, the method of collecting information does not have to be that complex. Smaller

businesses often use simple software programs and spreadsheets for their MIS reporting needs.

There can be as many types of MIS reports as there are divisions within a business. For example, information

about sales revenue and business expenses would be useful in MIS reports for finance and accounting

managers. Warehouse managers would benefit from MIS reports about product inventory and shipping

information. Total sales from the past year could go into an MIS report for marketing and sales managers.

Type of Information in an MIS Report:

In our pretend manager example, you've been asked to present information about your department's customer

service calls. An MIS report for this would likely contain data such as:

1. The number of calls your staff takes

2. The number of emails that come in each day

3. The average amount of time it takes to answer a phone call or email

4. The number of questions that your staff answers correctly versus the number that are incorrect

MIS Reporting System:

MIS reporting system is used to produce reports that is raw data from the processing systems in the office,

such as the software on the computers, the transactional information coming from the transaction processing

systems, and even the mobile applications running on employee phones for business purposes. The output of

the analysis of this data is in the form of one of many types of reports. These reports will aggregate the data and

present them in a proper format that the management in the company can then use to help them in the decision-

making process. The reports could be no more than summaries of such things as sales, or they could be more

detailed.

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The types of reports are:

1. The Summary Reports

2. The Trend Reports

3. The Exception Reports

4. On-Demand Reports

1. The Summary Reports:

These reports take data from different categories and aggregate it. It could be from different products, or

different business units or geographical regions or accounting periods.

The information that is being aggregated in summary reports is usually presented in such a way

that management can make sense of it.

If it is an inventory summary, then it will consider vital information like the value of inventory in stock as

well as the value of new purchases.

If it is a sales summary, then it will contain information about sales revenue as well as divisions for that

revenue in terms of geographical location, product category, and so on.

No matter what kind of management information system you are using, even if it is as simple as a

spreadsheet, it will allow you to specify the format in which you want the report.

2. The Trend Reports:

Trend reports simply show trends, which allow you to compare how different things perform and they also

enable you to compare present performance with past performance. A trend report of sales, for example,

shows the performance of a given product category or business unit over the course of, say, a year. That

year will then be broken down into months, weeks, and so on so that you can see how well it did over

different periods. You can also see how well a product category or business unit is doing from one year to

the next. When management uses trend reports, they can identify problem areas and figure out how to

correct them. A business unit that’s not doing well may need for the leadership in it to be changed, so it

can improve. A product category that is suffering may need to either be improved altogether.

3. The Exception Reports:

An exception is anything outside of the norm (rules). An exception report will collect every single instance

of these abnormal occurrences and then put them in one place where management has easy access to it. An

exception report allows management to see what’s not going right and then prioritize what needs to be

solved immediately. If, for example, inventory levels are well below the norm, then management can order

more supplies. If a business unit is making much less revenue than the norm, then management can take

action.

4. On-Demand Reports:

On-demand reports are produced on demand. The way they look and what is contained in them depend on

both the requirements of the manager that needs them and on the prevailing circumstances.

The management information format can either be a standard format or a custom one as required by the

requester.

For example, the business owner might want a sales report for a specific product category to see how well

it is selling in a particular location during a given holiday season, or at a specific price. A manager may

want to know how a change in the price of a product or service will affect the profitability of that product

or service.

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MIS DESIGN APPROACHES:-

The approaches given here provide directions to the design team in developing MIS. It broadly specifies how

information should flow to different layers of management and to different managers in each layer. John

Buckley identified four approaches to MIS design which are listed in the order of least desired to most desired

approaches. They include –

1. The shotgun approach

2. The traditional approach

3. The rational approach

4. The empirical approach

1. The Shotgun Approach:

The information requirements of different executives and employees vary with respect to the level of

management and the position they hold. Under this approach, when an executive asks for some

information, the system would provide all the related information relating to the query without sorting or

filtering the unnecessary information. The system ignores the process of filtering the information or

diagnosing the query so as to provide only relevant information. The executive then has to manually filter

and sort the information according to his/her requirement. This approach can increase the cost to the

organization, which includes the cost of gathering all the information as well as the cost of storing it (as

it may consume a huge amount of space in memory).

2. The Traditional Approach:

The essence of the traditional approach is to give the same kind of information to the decision maker that

has proved successful time and again. The traditional or integrative approach uses integration of

information systems across the functional departments of the organization.

The integration of information into a centralized database helps in reducing costs by eliminating duplicate

data. It helps in providing traditional reports to the managers which they are familiar with. This approach

also suffers from certain disadvantages. The biggest disadvantage is that query specific information is

seldom provided in this approach.

The traditional approach is known to provide time-tested information which may not be as useful in the

current scenario as it used to be in earlier cases. Hence, there exists a certain ambiguity for the managers

while making decisions. Due to integration, the powers of the individual departments get shifted to the

central offices or headquarters. This creates friction in the organizational layers and functioning, leading

to a fall in revenues. If the MIS is implemented in big government organizations using this approach, it

will result in an increase in costs.

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3. The Rational Approach:

The rational approach is an improvement on the shotgun and traditional approaches. It incorporates the

decision-making process in the MIS design, though in an abstract form. The rational approach emphasizes

rationality and model building in the MIS design. The models are developed by experts who understand

managerial decision-making and incorporate their recommendations in their models.

Information dissemination depends on the managerial hierarchy, which indicates that different levels of

management are treated discriminately by allowing varying levels of information to flow to them. This is

done to provide the respective managers with the information required to help them in arriving at their

decisions. Model building is based on certain assumptions and such assumptions may prompt the experts

to include some variables and exclude others. But there is always a problem in distinguishing critical

variables from non-critical ones.

4. The Empirical Approach:

In this approach, the scientific observations of decision makers at work are taken into consideration while

designing an MIS. This approach emphasizes the behaviour of the decision makers rather than rationality.

The environment in which the decisions are made is also given due importance and the decision-making

process is given the same importance as the outcome of the decisions.

This approach focuses on how a manager behaves while making a decision. It includes the channels of

information the manager uses, the type of environment he/she is working in, the organizational set-up,

etc. These factors are considered to influence the decision-making process and, ultimately, the decision

outcome.

As it is difficult to study all the managers at work in an organization, this approach is used selectively. In

other words, the empirical approach is based on the marginal utility theory. Based on this theory, the

approach tries to improve the marginal effectiveness of the best decision-makers in the organization

instead of enhancing the efficiency of all the decision-makers. Hence, the empirical approach considers a

fixed MIS and a variable MIS.

PROTOTYPE MODEL OR PROTOTYPING LIFE-CYCLE APPROACH:-

PROTOTYPE MODEL / PROTOTYPE APPROACH:-

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When the system is complex, the development strategy is Prototyping of the System. Prototyping is a process

of gradually finding out the information needs, developing methodology, trying it out on a smaller scale with

respect to the data and complexity, ensuring that it satisfies the needs of the users and assess the problem of

development and implementation.

This process identifies the problem areas, insufficiencies in the prototype and fulfilment of the information

needs. The designer then takes steps to remove insufficiencies. This may call upon changing the prototype of

the system, questioning the information needs, reorganising the operational system and procedure and move

user interaction. A typical process of MIS development through prototyping is shown in figure.

In the prototyping approach, the designer’s task become difficult, when there are multiple users of the same

system and the inputs they use are used by some other users as well. For example, a lot of input data comes

from the purchase department, which is used in accounts & inventory management. The attitudes of the various

users and their role as the originators of the data needs to be developed with a high degree of positivism.

It requires of all workers to appreciate that the information is a corporate resource and all have to contribute

as per the designated role by the designer to fulfil the corporate information needs. When it comes to

information the functional, the departmental, the personal boundaries do not exist. This calls upon each

individual to fulfil with the design needs and provide without fail the necessary data inputs whenever required

as per the specification discussed and finalised by the designer.

Bringing the multiple users on the same platform and changing their attitudes towards information, as a

corporate resource, is a managerial task of the system designer. The qualification, experience, knowledge of

the state of art, and an understanding of the corporate business, helps considerably, in overcoming the problem

of changing the attitudes of the multiple users and the originators of the data.

Advantages of Prototype model:

1. Users are actively involved in the development.

2. Since in this methodology a working model of the system is provided, the users get a better

understanding of the system being developed.

3. Errors can be detected much earlier.

4. Quicker user feedback is available leading to better solutions.

5. Missing functionality can be identified easily.

6. Confusing or difficult functions can be identified Requirements validation, Quick implementation of,

incomplete, but functional, application.

Disadvantages of Prototype model:

1. Leads to implementing and then repairing way of building systems.

2. Practically, this methodology may increase the complexity of the system as scope of the system may

expand beyond original plans.

3. Incomplete application may cause application not to be used as the full system was designed Incomplete

or inadequate problem analysis.

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PROTOTYPING LIFE-CYCLE APPROACH:-

There are many systems or sub-systems in the MIS which have a life-cycle, that is, they have birth and death.

Their emergence may be a sudden or may be a part of the business need, and they are very much structured

and rule-based. They have 100% clarity of inputs and their sources, a definite set of outputs in terms of the

contents and formats. These details more or less remain static from the day the system emerges and remain in

that static mode for a long time. Minor modifications or changes do occur but they are not significant in terms

of handling either by the designer or the user of the system. Such systems, therefore, have a life and they can

be developed in a systematic manner, and can be reviewed after one or two years, for significant modifications,

if any.

Examples of such systems are payroll system, share accounting, basic financial accounting, finished goods

accounting and dispatching, order processing and so on. The life-cycle approach, therefore, has a method of

its own as explained in the figure.

Difference between Prototyping and Life-Cycle Approach:

Prototyping Approach Life-Cycle Approach

1. Open system with a high degree of uncertainty

about the information needs.

1. Closed system with little or no uncertainty about

the information needs. The system remains valid

for a long time with no significant change. The

design would remain stable.

2. Necessary to try out the ideas, applications and

efficiency of the information as a decision

support.

2. No need to try out the application of the

information as it is already proven.

3. Necessary to control the cost of the design and

development before the scope of the system and

its application is fully determined.

Experimentation is necessary.

3. Scope of the design and the application is fully

determined with clarity. Experimentation is not

necessary.

4. User of the system wants to try out the system

before he commits the specification and the

information requirements.

4. The user is confident and confirms the

specification and the information needs.

5. The system and application is highly custom

oriented.

5. The system and application is universal and

governed by the principles and practices.

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PROJECT MANAGEMENT:-

An abundance of information is created, transferred and stored over the life cycle of a project. A PMIS (Project

Management Information System) enables an organized and controlled flow of information, so nothing is

siphoned off (drain off) or misplaced.

What is PMIS?

A project management information system (PMIS) is how information needed to run a project is organized. It

collects and uses project information through one or more software applications. What these programs do is,

help project managers to plan, execute and close their project. It’s a way to organize that flood of information,

so you don’t drown in data.

The Project Management Book of Knowledge (PMBOK) states that a PMIS is “an information system

consisting of the tools and techniques used to gather, integrate, and disseminate the outputs of project

management processes. It is used to support all aspects of the project from initiating through closing and can

include both manual and automated systems.”

There are different types of PMIS software, but most share feature sets that include tools for scheduling, work

authorization, information collection and distribution, etc. Some will also have automated gathering and

reporting on key performance indicators (KPIs). Others are simply a collection of files.

Essential Features of a PMIS:

PMIS is made to support all aspects of project management and the information they monitor or collect. Some

of those areas are integration management, project scope management, project cost management, project time

management, project quality management, project communications management, project risk management,

project procurement management and project stakeholder management.

That’s a lot of information to keep track of, and when managing a project, it is crucial to be able to immediately

pluck that information required at that moment out from all that data. Therefore, a PMIS is so important. It’s

the tool that gives you instant access to the signal in the noise. The information is also critical for future

projects in terms of reducing risk, improving efficiencies and lowering costs.

If a PMIS captures all project data and stores it in an organized way, it must also be retrievable, searchable,

categorizable, shareable and analysable. To do all this, a typical PMIS will have a series of tools.

The following features are:

1. Schedule and Planning

2. Resource Management

3. Budget

4. Control and Performance

5. Reporting and Communication

6. Integration and Ease of Use

1. Schedule and Planning: Computes early and late schedule, slack times and the critical path.

2. Resource Management: Including resource loading, levelling, allocation, etc.

3. Budget: Associate cost with individual tasks for more accurate budget estimation and generation.

4. Control and Performance: Analyse and control cost and performance, updating existing plans as actual

against planned data changes, provide what-if scenarios for the project manager.

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5. Reporting and Communication: Creation of graphs and charts of collected and analysed data that can

be shared with stakeholders and team members.

6. Integration and Ease of Use: Some PMIS will access data from different projects for multi-project

analysis, integrating with other systems, such as payroll, inventory, etc. The easier a PMIS is to use, the

less time and money required to train.

PMIS throughout the Project Life Cycle:

A PMIS will have different functions depending on the phase of the project. For example, during the initiation

phase, a project manager will use a PMIS to help with coming up with a preliminary budget, including cost

estimates and resources. A PMIS in conjunction with other tools can help with scheduling the project. In terms

of approval, it helps define the scope of work, assists with preparing the bid and can be used when presenting

the data to decision-makers.

When planning, PMIS helps with detailing the scheduling, including task and critical path analysis. It supports

cost management planning, including WBS analysis and integration of control processes. PMIS will also prove

beneficial to the project manager when resource planning in terms of availability and level. It can also help

establish a baseline for project scope, schedule and cost.

Once the project has been executed, the PMIS is collecting, organizing and storing data as it comes in from

the project team, which can then be compared to the baseline projections. The PMIS helps with cost and

schedule forecasts to help if changes are required mid-project. Materials management, cost collect,

performance measurement and, of course, reporting are all supported by PMIS.

Especially when closing out a project, PMIS is a great help. It helps review requirements to make sure the

project has met all its goals and objectives. It also organizes all the information collected over the course of

the project for performance review, productivity analysis, and final reports and then keeps an archive with the

historical data for future projects.

Advantages of Using an Online PMIS:

While there are manual project management information systems, the benefits of using an online or cloud-

based system are numerous. With an online information system speed, capacity, efficiency, economy,

accuracy and the ability to handle complex projects can all be approved. But of all these benefits, the most

practical is speed.

Once the data is collected, it can then be adjusted to reflect the results a project manager needs with great

speed and accuracy. A manual program is never going to match that. Nor can it create and revise plans,

schedules or budgets as quickly. What once took days or longer is now completed in seconds.

Project managers and their organizations can store large amounts of data with a PMIS. That data is also easily

accessed, prioritized and summarized as needed. And unlike a manual system, which is large and requires

many support personnel, an online PMIS needs far less support and space.

With these factors there is also a cost benefit. The cost advantage of a digital over a manual PMIS is usually

significant, especially when considering storage and processing. And if inputs are correct, the chance of errors

is greatly diminished with a cloud-based PMIS.