Management Information Systems

4 MANAGEMENT INFORMATION SYSTEMS

 MIS can be defined as a system that

·         Provides information to support managerial functions like Planning, organizing, directing and controlling

·         Collects information in a systematic and a routine manner which is in accordance with a well defined set of rules.

·         Includes files, hardware, software and operations research models of Processing, storing, retrieving and transmitting information to the users.

4.1 MANAGEMENT INFORMATION SYSTEMS (MIS)

·         Designed to ‘convert data from internal and external sources into information, communicated in an appropriate form to managers at different levels of an organization. The information enables effective decisions or appropriate planning to be carried out’ Usually based on one or more databases

·         A sales manager will perhaps require a report showing the sales for a geographic area and or by salesman

·         A production manager will require a report showing stock levels currently and anticipated sales.

·         To be effective the reports should be in an appropriate form that is up to date and accurate with the correct level of detail for his job.

4.1.1 OBJECTIVES OF MIS

An effective MIS has the following objectives

·         Facilitate the decision - making process by furnishing information in the proper time

Frame which helps the decision - maker to select the best course of action

·         Provide requisite information at each level of management to carry out their functions.

·         Help in highlighting the critical factors to the closely monitored for successful functioning of the organization.

·         Support decision-making in both structured and unstructured problem environments.

·         Provide a system of people, computers, procedures, and interactive query facilities, documents for collecting, sorting, retrieving and transmitting information to the users.

4.1.2 CHARACTERISTICS OF MIS

Management Oriented - The system is designed from the top to work downwards. It does not mean that the system is designed to provide information directly to the top management. Other levels of management are also provided with relevant information. For example, in the marketing information system, the activities such as sales order processing, shipment of goods to customers and billing for the goods are basically operational control activities. A salesman can also track this information, to know the sales territory, size of order, geography and product line, provide the system has been designed accordingly. However, if the system is designed keeping in mind the top management, then data on external competition, market and pricing can be created to know the market share of the company's product and to serve as a basis of a new product or market place introduction

Management Directed - Because of management orientation of MIS, it is necessary that management should actively direct the system development efforts. In order to ensure the effectiveness of system designed, management should continuously make reviews.

Integrated - The world "integration" means that the system has to cover all the functional areas of an organization so as to produce more meaningful management information, with a view to achieving the objectives of the organization. It has to consider various sub-system their objectives, information needs, and recognize the interdependence, that these subsystem have amongst themselves, so that common areas of information are identified and processed without repetition and overlapping

4.1.3 LIMITATIONS OF MIS

·         Highly sensitive and requires constant monitoring

·         Budgeting of Budgeting extremely difficult

·         Lack of flexibility to update it

·         Factors Contributing to Success

4.1.4 SUCCESS OF MIS

If MIS is to be success then it should have all the features listed as follows:

·         The MIS is integrated into the managerial functions. It sets clear objectives to ensure that the MIS focuses on the major issues of the business.

·         An appropriate information processing technology required to meet the data processing and analysis needs of the users of the MIS is selected.

·         The MIS is oriented, defined and designed in terms of the user’s

·         The MIS is kept under continuous surveillance, so that its open system design is modified according to the changing information needs.

·         MIS focuses on the results and goals, and highlights the factors and reasons for non achievement

·         MIS is not allowed to end up into an information generation mill avoiding the noise in the information and the communication system.

·         The MIS recognizes that a manager is a human being and therefore, the systems must consider all the human behavioral factors in the process of the management.

·         The MIS recognizes that the different information needs for different objectives must be met with. The globalization of information in isolation from the different objectives leads to too much information and information and its non-use.

·         The MIS is easy to operate and, therefore, the design of the MIS has such features which make up a user-friendly design.

·         MIS recognizes that the information needs become obsolete and new needs emerge.

·         The MIS design, therefore, has a basic potential capability to quickly meet new needs of information. 

·         The MIS concentrates on developing the information support to manager critical success factors.

·         It concentrates on the mission critical applications serving the needs of the top management Factors Contributing to Failures

4.1.5 FAILURE OF MIS

The common factors which are responsible for this are listed as follows:

·         The MIS is conceived as a data processing and not as an information processing system.

·         The MIS does not provide that information which is needed by the managers but it tends to provide the information generally the function calls for. The MIS then becomes an impersonal system.

·         Under estimating the complexity in the business systems and not recognizing it in the MIS design leads to problems in the successful implementation.

·         Adequate attention is not given to the quality control aspects of the inputs, the process and the outputs leading to insufficient checks and controls in the MIS.

·         The MIS is developed without streamlining the transaction processing systems in the organization. 

·         Lack of training and appreciation that the users of the information and the generators of the data are different, and they have to play an important responsible role in the MIS.

·         The MIS does not meet certain critical and key factors of its users such as a response to the query on the database, an inability to get the processing done in a particular manner, lack of user-friendly system and the dependence on the system personnel.

·         A belief that the computerized MIS can solve all the management problems of planning and control of the business.

·         Lack of administrative discipline in following the standardized systems and procedures, wrong coding and deviating from the system specifications result in incomplete and incorrect information.

·         The MIS does not give perfect information to all the users in the organization.

4.2 SOURCES OF INFORMATION

Information may be internal or external.

·         Internal information includes data from transaction processing of the data processing system.

·         External information includes market research, details about the activities of competitors, information about social trends, economic factors, government legislation, and so on.

·         Traditional information flow in an organization is through notice boards, newsletters and memos. Technological systems include Email, Intranets, collaboration software e.g. Lotus Notes and computer databases.

4.3 ROLE OF MANAGEMENT

The traditional roles of managers are:

·         Planning

·         Organizing

·         Coordinating

·         Controlling

·         Forecasting

·         Decision making

Bear in mind that an information system is not just for the use of ‘managers’. Anyone who shares the above roles can make use of an MIS.

4.3.1 DECISION MAKING

Types of decision:

·         Structured are day to day decisions, are routine and have a procedure for handling them (i.e. staff discipline)

·         Unstructured decisions require a manager to exercise judgment, insight and evaluation. Usually important, they have no procedure laid down (i.e. expanding the business).

·         Levels of decision making:

·         Strategic - where Senior managers need to make long-term planning decisions

·         Tactical - where Middle managers often need to make tactical decisions.

·         Operational - where decisions about the production of an organization need to be made.

4.3.2 AIDS TO DECISION MAKING

·         Exception Reports are commonly used. These reports summarize the exceptions to the norm i.e. students obtaining low marks over a period of time.

·         Decision Support Systems help decision-making but they do not themselves make decisions. For example, spreadsheets with "what if" capabilities can be used to model and test out different scenarios

·         Expert Systems (also called Knowledge-based systems) are used to emulate human reasoning. They are usually limited to a specific area of expertise.

·         Executive Information Systems (EIS) are used by executives who can view graphs and charts. They can click on "hotspots" and get much more detailed information. They can click through several layers to pin-point exactly

4.4 MANAGING OF INFORMATION SYSTEM

·         Information system is a system, which collects, processes, stores, analysis and disseminates information for a specific purpose. It includes inputs i.e. data and instructions, outputs i.e. reports and calculations and it processes input and produces output that are sent to the user or other systems. It also contains a feedback mechanism that controls their operations and it operates within an environment.

·         Managing of Information System is an approach that combines decision-making systems with information systems.  It uses management models, mathematical models and scientific models in order to come up with optimum decision output.

·         Management information systems are a system that combines management systems and information systems in order to support decision-making in an organization.  It uses computer software that runs different decision-making models executed on hardware mainly computers and the results are used by people; those are the individuals who work with the system. 

·         Therefore management of information system is human, machine and software combination applied in order to achieve optimum results in an organization.

·         Information system is a system that collects, process, stores, analysis and disseminates information for a specific purpose.  It includes inputs, outputs, processes and a feedback mechanism that controls the operation and it functions within an environment.

·         Modern information systems are computer bases as they use computer technology to perform some or all of its intended tasks as such a system can include a P.C. and software or it may include several thousand computers communication networks and databases.

Basic components of such a system can include hardware, software, database, network procedures and people. Some of the major capabilities of information system can include:

·         High speed of performance

·         Process high volume of data

·         Provide fast, accurate and inexpensive communication with organizations

·         Store huge amounts of information in an easily to access small space

·         Allow quick and inexpensive access to vast amount of information world wide

·         Increase the effectiveness and efficiency of people working in groups in one place or several occasions

·         High speed typing and editing

·         Clearly present information that challenges the human mind and automate business possessors that are done manually

Organizations have adopted modern information technology to implement the information system.  This has been so in order to enable them to meet business pleasures and to improve their capability in responding to critical activity.

4.5 BUSINESS PRESSURES

These are caused by market pressures such as the globalization of world economies, competition of organizations on a global skill, emergence of strong consumers who not only know the price and value of goods but also where to get them cheaply.

The emergence of modern technology has caused an increase in business pressures particularly due to innovations.  The emergence of e-commerce infrastructure and the information superhighway which has enabled organizations to access information which they could not access and even access it faster than they could do there before.

Another source is the society where organizations are supposed to participate their roles in major areas of social responsibilities such as environmental control.

·         Providing equal opportunities to all

·         Employment and housing

·         Health, safety and social benefits to employees

·         Employee education training and retraining

·         External relationships

·         Privacy and ethics

Also government regulations and irregularities have also constrained organizations, therefore causing them to seek for efficient alternatives to do business economically.

4.6 CRITICAL RESPONSE

Organizations have been forced to adopt modern information systems in order to improve their capability to respond to business challenges.  This enables them to excel or even survive when they respond to critical activities.

Information system can also enable them to exploit rare opportunities i.e. they are proactive instead of being reactive.  Information systems such as strategic enable organizations to reap strategic advantages that can enable them to increase their market than to better their negotiations to customers and suppliers or even prevent competitors from entering their territory.

The organization response can be improved by implementing information systems that support improvement utilities such as:

·         Improving decision-making

·         Innovating big methods of serving customers

·         Providing total quality management

·         Providing material or services just in the right time to support productive process

Information system also provides organizations with support in business process re-engineering.  This is an approach that enables organizations to perform major innovations, which facilitates business restructuring and the empowerment of its employees besides reducing the process of creating goods or delivering services.

Information system also improves the organization’s ability to respond by supporting business alliances which enables creation of vital operations i.e. where companies are to limited by space, time or even service, customers can get support from any of the organization that is a business partner with any other organization even if the business are not doing exactly the same thing. Examples of information system that work at worldwide can include:

·         Parcel tracking systems (used by U.P.S.) to provide her customers with the information about the movement of their parcels form the point of posting to the destination and details about the movement of the parcels can be tracked from their website

·         An electronic commuting system used by Irrovine Company in the U.S. enables Russians, Koreans and the Indians to commute electronically to and from their offices located in California when physically they do not leave their countries.  This system is used to reduce costs drastically while at the same time enables experts from distant countries to undertake projects as if they are working in the same offices.

·         The Amazon Bookshop which in an electronic commerce information system used to improve the time to serve customers by reducing the time to do books shopping to reduce cost of shopping and to improve the access of information.

4.7 MANAGERS AND DECISION-MAKING

Decision-making can be classified by the organization level and decision-making is often a manager’s most challenging role.  IS have helped managers communicate and distribute information.  However, they have provided only limited assistance for management decision-making.  Decisions are classified as follows:

Structured - Structured decisions are repetitive and routine and they involve a definite procedure for handling them, so that they do not have to be treated each time as if they were new.  Some decisions are semi-structured.  In such cases, only part of the problem has a clear cut answer provided by an acceptable procedure.

Unstructured - Unstructured decisions are those in which the decision maker must proved judgment, evaluation and insights into the problem definition.  Unstructured decisions are novel, new, important and non-routine, and there’s no well understood or agreed on procedure for making them.

4.8 STAGES IN DECISION-MAKING

Making decisions consist of several different activities.  The four stages in decision-making are:

Intelligence – Consist of identifying and understanding the problems occurring in the organization by answering the questions; why the problem, where and what are the effects?  MIS systems that achieve a wide variety of detailed information can help identify problems especially through the system’s report.

Design Stage – Here the individual designs possible solutions to the problems

Choice Stage – Consist of choosing among solution alternatives.  A decision-maker may use a complex decisions system to develop more extensive data on a variety of alternatives and complex models or data analysis tools to account for all the cost, consequences and opportunities.

Implementation Stage – Here the decision-maker choose an alternative and puts it into effect.  Managers can use a reporting system that delivers routine reports on the progress of a specific solution.

 

Is there a problem?

 

What are the alternatives?

 

Which should you choose?

 

Is the choice working?

 

In general, the stages of decision-making do not necessarily follow a linear path.  At any point in the decision-making process you may have to loop back to a previous stage.  For instance, one can often come up with several designs but may not be certain about whether a design meets the requirements for the particular problem.  In such a situation, the decision-maker requires additional intelligence work.

4.8 MANAGING INFORMATION RESOURCES

In modern organizations several information resources can exist.  It is therefore essential to have a sound method of managing these resources.  The challenges involved include identifying which resources are to be managed and by whom, establishing the role of the individual or department that has to be entrusted with the resources and establishing resource between individuals and departments that are in charge of managing the resources.

Information system resources can include:

·         Hardware resources of all types such as computers, servers and all other devices

·         Software resources including development tools, languages and applications

·         Databases for the storage and retrieval of data and information

·         Networks local or wide, internet and intranets and their supporting devices

·         Procedures, security facilities, physical building and people

·         These resources are widely scattered throughout the organizations and they might not be a standard procedure for dividing responsibility of how to manage them

Most organizations create an I.S. department.  They assign the responsibility of managing these resources to its managers regardless of where these resources are located and how they are used.  Other organizations assign the responsibility of managing the resources to individual users but set up a help desk or helpline through which support can be provided to the end users.

Other organizations outsource the I.T. resources by appointing vendors of the services performed by the I.T. facilities to outsiders of the organization.  Where an organization creates an IS department following roles are assigned to the department and these include:

·         Providing training services

·         Managing computer operations

·         Managing system development

·         Staffing and training in information systems skills

·         Designing specific strategic information systems

·         Infrastructure plans

·         Educating non-I.T. users about I.T

·         Supporting end user computing

·         Incorporating modern I.T. solutions into business e.g. E-Commerce

·         Creating business alliances

·         Actively participating in business process in engineering

Activities in this information system department can be categorized into three:

·         Support of end user computing and can involve:

-          Training and education

-          Support in application development

-          Assisting in selecting I.T. solutions

-          Identifying user requirements

-          Supporting cooperation between different users of different categories

-          Documentation of systems of an organization

-          Providing formal means for users communication with management and with traditional data processing

·         Technical assistance which involves:

-          Directing security and control issues

-          Providing guidance in selection of hardware and software

-          Assisting in software installation and upgrades

-          Establishing database of file backs, recovery and archives guidelines

-          Assisting in selection and evaluation of application pages and other development tools

·         General Support services

This includes providing clearing house functions for receiving and disseminating information on relevant personal computing issues, establishing a communication system for interrupt driver user requests for information on software, hardware or applications, chairing of user group meeting on a regular and adhoc basis.

The managing of information system department is similar to any other organizational unit. The Chief Information Officer who is always an important member of the organization’s top management leads it.

4.9 ROLES OF CHIEF INFORMATION OFFICER

·         Align technology with business strategy

·         Implement a state of act solutions

·         Provide and improve information access

·         Enhance customer service

·         Train and empower employees

·         Educate business units about I.T.

·         Evaluate imaging I.T. technologies

·         Enhance current systems

·         Create links with the external customers of the organization

It is therefore important for the chief information officer to have skills such as to enable understanding the business that the organization is in:

·         To maintain technology competency

·         To facilitate change

·         To provide education to other executives

·         To understand and set industry standards

·         To manage safety and security matters

Where I.T. resource users are left in-charge of the resources an organization has to create a mechanism that has to be used to assist users manage the resources.  This mechanism can involve setting up a steering committee to represent all the users of the facilities and to be in-charge of setting I.T. policies, providing for priorities, coordinating I.S. projects, budgeting, running applications development and maintenance.

It also provides technical and administrative support for all end users.  The other alternative is to outsource I.T. services form the vendors of such services.  This is by entering into contracts or agreements with the vendors of the services by stating the nature of support to be provided, how it is to be provided, how often it is to be provided and what facilities the organization is to outsource.