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Friday, February 20, 2009

Management Information System (MIS)

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Definition of Management Information System (MIS)

MIS is:
  • Integrated man-machine system
  • For providing information
  • To support operations, management, analysis and decision making functions
  • In an organization

MIS uses:

  • Computer hardware and software
  • Manual processes
  • Models for analysis, planning, control and decision making
  • Database

MIS can also be defined as a planned system of the collecting, processing, storing and disseminating information needed to carry out the functions of management.

Data and Information

  • Terms "data" and "information" are used normally in a loose manner and interchangeably.
  • Also same set of figures can be seen as data or information some times. Thus, data becomes information seen within a context.
  • So, information is defined as data that is meaningful or useful to it's user.
  • Data, therefore, can be considered as raw material to produce information.

MIS Structure

There are primarily four building blocks for the structure of complete MIS. They are:

  • Organizational functions and cross-functional processes.
  • Management activities at different hierarchical levels.
  • Decision support.
  • operating elements.

Organizational functions

  • MIS structure has to be designed to satisfy the requirements of various organizational functions.
  • In addition, there will be many cross functional processes going on in an organization.
  • Each of these require information for their various levels of hierarchical activities which are normally known as transaction processing (clerical/worker level), operational control (junior/middle management level), managerial control (senior management level) and strategic planning (top management level).
  • These organizational functions, as we know, are: marketing and sales, supply chain (materials), manufacturing, logistics, human resources, finance and accounting, information technology and top management. Each of these functions also interact with each other in cross functional processes in the project phases and also during stabilized business phases.

Hierachical Management Activities

  • MIS structure has to be designed to satisfy various hierarchical information requirements.
  • There are four levels of hierarchy: strategic planning (top management), management control and tactical planning (senior management), operations planning and control (middle and junior management), transaction processing (clerical staff and workers).
  • At each level of management, the nature of information in terms of details, conciseness, frequency, interpretations, decision supporting/decision giving capabilities etc is different and MIS structure should support it.

Decision Making

  • Nature of decisions vary for each hierarchical level in each management function.
  • Broadly, these decisions can be classified in two ways as: structured (programmable) decisions and unstructured (non programmable) decisions.
  • MIS requirements for structured programmable decisions are clear, unambiguous and decision making logic can be formulated. These are normally related to the requirements of transaction processing and operation control levels in various functions of the organization.
  • MIS requirements for unstructured non programmable decisions are ambiguous and often frequently changeable,. The decision making is not amenable for pre-established procedures or logic. These are normally related to the requirements of strategic planning and some times, for management control levels. Information requirements are not fully known in advance information/data retrieval is done through adhoc enquiries.
  • MIS structure should address to the needs of both the types of decision making mentioned earlier.

Operationg elements of MIS

  • MIS that has to support the requirement of various types of decision making at different hierarchical levels in various functions of an organizations, finally has it's operating elements on which the entire structure is created.
  • There are three operating elements: physical components, processing functions and outputs for the users of information.
  • Physical components are: hardware, software, database, algorithms (procedures or logic) and the people/experts in information technology function.
  • Processing functions include: transaction processing, data base maintenance, reports production, enquiry processing and interactive support applications.
  • Types of outputs are: transactional types or action oriented, informational and decision support types.
  • The operating elements of MIS structure should be designed keeping these (physical components, processing functions and types of information outputs) in mind.

Finally, the four building blocks of MIS structure i.e. organizational functions, management hierarchical activities, types of decision making and operating elements should be synthesized into each other to make a seamless, integrated and contingency based MIS structure.

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