Management Information

System (MIS)
Contents
 Data, Information and System
 Information – a critical resource
 Data and Information
 Types and Characteristics of useful Information
 System
 Information System (IS)
 Components of an IS
 Types of IS
 Interrelationship among systems
 Management Information System (MIS)
 Broader Definitions and concepts
 Output of MIS
 Functional View
 Impact of MIS
 MIS Planning and Development
 MIS Development outlook
 Pointers for MIS Design
 MIS Planning
 Software Development Life Cycle
 Software Development Methodologies: Approaches
Information is critical
The information we have
is not what we want,
The information we want
is not the information we need,
The information we need
is not available.
Information is a Resource
It is scarce
 It has a cost
 It has alternative uses
 There is an opportunity cost factor
involved if one does not process
information
Why need Information?
To ensure effective and
efficient decision - leading
to prosperity of the
Organization.
Data and Information
Data vs. Information
 Data
 A “given,” or fact; a number, a statement, or an image
 Represents something (quantities, actions and objects) in the real
world
 The raw materials in the production of information
 Information
 Data that have meaning within a context
 Data that has been processed into a form that is meaningful to the
recipient and is of real or perceived value in the current or in the
prospective actions or decisions of the recipient.

Data Manipulation
Example: customer survey
 Reading through data collected from a customer survey with questions
in various categories would be time-consuming and not very helpful.
 When manipulated, the surveys may provide useful information.
Types and classification of Information

Information classification
Action v/s no-action
Recurring v/s non recurring
Internal v/s external
Planning Information: standards, norms, specifications
Control information – reporting the status of an activity thru feedback mechanism
Knowledge information – library reports, research studies
Characteristics of Useful Information
Information Presentation (An Art)
Data may be collected in the best possible way and processed
analytically, however, if not presented properly, it may fail
to communicate any value to recipient. Communication of
Information is affected by the methods of transmission,
the manner of information handling and the limitations &
constraints of recipients.
The methods used to improve communication are:
a) Summarization: Too much information causes noise and
distortion i.e confusion, misunderstanding and missing of
purpose. Summarization suppresses the noise and
distortion.
b) Message routing: The principal here is to distribute
information to all those who are accountable for the
subsequent actions in any manner. This is achieved by
sending the copies of the reports or documents to all the
concerned people or users.
System
System: A set of components that work together to
achieve a common goal. Computer-based Information
Systems take data as raw material, process it, and
produce information as output.
Contents
 Data, Information and System
 Information – a critical resource
 Data and Information
 Types and Characteristics of useful Information
 System
 Information System (IS)
 Components of an IS
 Types of IS
 Interrelationship among systems
 Management Information System (MIS)
 Broader Definitions and concepts
 Output of MIS
 Functional View
 Impact of MIS
 MIS Planning and Development
 MIS Development outlook
 Pointers for MIS Design
 MIS Planning
 Software Development Life Cycle
 Software Development Methodologies: Approaches
Components of an Information System
A Networked Information System:
Three-Tier Architecture
Corporate Corporate Mainframe
Databases Headquarters Divisional
Minicomputers
with Divisional
Databases

Marketing
and Sales Finance Production

Divisional
Databases

Regional
Office
Work-
stations Plant Minicomputers

Salesforce
Notebooks Local Area Network: Telecommunications
PCs with Local Databases Link
Types of Information Systems
Types of Information Systems
 Operational-level systems support operational managers
by keeping track of the elementary activities and
transactions of the organization, such as sales, receipts,
cash deposits, payroll, credit decisions, and the flow of
materials in a factory.
 Management-level systems serve the monitoring,
controlling, decision-making, and administrative activities
of middle managers. The principal question addressed by
such systems is this: Are things working well?
 Strategic-level systems help senior management tackle
and address strategic issues and long-term trends, both in
the firm and in the external environment.
Types of Information Systems
Transaction Processing System
Transaction Processing Systems (TPS):
 Basic business systems that serve the operational level
 A computerized system that performs and records the daily
routine transactions necessary to the conduct of the
business
Management Information System
 Serve middle management
 Structured and semi-structured decisions
 Provide reports on firm’s current performance, based
on data from TPS
 Past and Present Data
 Internal Orientation
 Provide answers to routine questions with predefined
procedure for answering them
 Typically have little analytic capability
Decision Support System
 Serve middle management
 Support non-routine decision making
 E.g. What is impact on production schedule if
December sales doubled?
 Often use external information as well as
information from TPS and MIS
 Processing is interactive in nature
 Output in form of Decision analysis
 Example: Contract Cost Analysis
Executive Support Systems
 Support senior management – Strategic Level
 Address non-routine decisions requiring judgment,
evaluation, and insight
 Incorporate data about external events (e.g. new tax laws
or competitors) as well as summarized information from
internal MIS and DSS
 User "seductive" interfaces; Users' time is a premium
 What if capabilities abound
 Input in form of Aggregate data
 Processing is interactive and output in form of projections
 Examples
 ESS that provides minute-to-minute view of firm’s financial
performance as measured by working capital, accounts receivable,
accounts payable, cash flow, and inventory.
 5-year operating plan
Interrelationship Among Systems

The various types of systems in the organization have interdependencies. TPS are major producers of information
that is required by many other systems in the firm, which, in turn, produce information for other systems. These
different types of systems are loosely coupled in most business firms, but increasingly firms are using new
technologies to integrate information that resides in many different systems.
Contents
 Data, Information and System
 Information – a critical resource
 Data and Information
 Types and Characteristics of useful Information
 System
 Information System (IS)
 Components of an IS
 Types of IS
 Interrelationship among systems
 Management Information System (MIS)
 Broader Definitions and concepts
 Output of MIS
 Functional View
 Impact of MIS
 MIS Planning and Development
 MIS Development outlook
 Pointers for MIS Design
 MIS Planning
 Software Development Life Cycle
 Software Development Methodologies: Approaches
MIS - Definition and Concept
Right Information
To the right person
At the right place
At the right time
In the right form
At the right cost
The three sub-components
Management, Information and System
- together bring out the focus clearly & effectively.
System emphasizing a fair degree of integration and a holistic
view;
Information stressing on processed data in the context in which it is
used by end users;
Management focusing on the ultimate use of such information
systems for managerial decision making.
MIS – Definition and Concept
A management information system (MIS) is system of
collecting, processing, storing, disseminating and utilizing
data in the form of information needed to carry out the
functions of management.

Today, the term is used broadly in a number of contexts and

includes (but is not limited to):
 Decision support systems,
 Resource and people management applications,
 Enterprise Resource Planning (ERP),
 Supply Chain Management (SCM),
 Customer Relationship Management (CRM),
 project management and database retrieval applications.
Difference between management information
systems and information systems
The terms MIS and IS are often confused. IS may include systems
that are not intended for decision making. In effect, MIS must
not only indicate how things are going, but why they are not
going as well as planned where that is the case

 Information system applied to management context is called MIS.

IS can be applied to any area of business while MIS is applicable
for managerial decision-making.
 IS means use of hardware and software for any business. MIS can
be used in any form - even manual reports, which aid decision-
making
 MIS is used to analyze other information systems applied in
operational activities in the organization.
 MIS summarize and report on the company’s basic operations.
The basic transaction data from TPS are compressed and reported
Outputs of MIS
 Scheduled reports
 Produced periodically, or on schedule (daily,
weekly, monthly)
 Key Indicator Report
 Summarizes the previous day’s critical
activities
 Demand Report
 Gives certain report at manager's request
 Exception Report
 Automatically produced when a situation is
unusual or requires management action
MIS – Functional View
How MIS Obtain Data from TPS:
How MIS Obtain their Data from the Organization’s TPS:

In the system illustrated by this diagram, three TPS supply

summarized transaction data to the MIS reporting system at the
end of the time period. Managers gain access to the organizational
data through the MIS, which provides them with the appropriate
reports.
Sample MIS Report

This report, showing summarized annual sales data, was produced by the MIS in previous slide
Impact of MIS
 Management of marketing, finance, production and personnel becomes
more efficient, the tracking and monitoring becomes easy
 Helps in understanding of business itself, MIS begins with definition of
data and its attributes – uses data dictionary and brings common
understanding of terms and terminology in organization
 MIS calls for systemization of business operations – leads to streamlining
of operations, brings discipline in its operations everyone is required to
follow
 Since the goals of MIS are driven from organization goals, it helps
indirectly pulling everyone in organization towards corporate goals by
providing relevant information to the people in organization
 MIS helps to monitor results and performances
 MIS provides alerts, in some cases daily, to managers at each level of the
organization, on all deviations between results and pre-established
objectives and budgets.
 IT enabled MIS is partly responsible for the PARADIGM shift (A change, a
new model,) from support to contributing to an organizations profitability
Contents
 Data, Information and System
 Information – a critical resource
 Data and Information
 Types and Characteristics of useful Information
 System
 Information System (IS)
 Components of an IS
 Types of IS
 Interrelationship among systems
 Management Information System (MIS)
 Broader Definitions and concepts
 Output of MIS
 Functional View
 Impact of MIS
 MIS Planning and Development
 MIS Development outlook
 Pointers for MIS design
 MIS Planning
 Software Development Life Cycle
 Software Development Methodologies: Approaches
 MIS Development Outlook

Security

Corporate
Corporate Internal
Strategy
Strategy Internal
Systems Systems
MIS
Development Operations
Strategy
and Plan Implementation
Ethics/
Ethics/ Outsourced Outsourced
Privacy
Privacy Systems Systems
Development Operations

Infrastructure
Pointers for MIS Design
 To take care for data problems (bias and error) by high level validations,
checking and controlling the procedures.
 Due regard to the communication theory of transmitting the information
from the source to the destination.
 Handling of noise and distortion by summarization and message routing
 Ensuring that no information is suppressed or over emphasized
 To provide specific attention to quality parameters – Utility, Satisfaction,
Error and Bias
 By controlling inputs to the MIS on the factors of impartiality, validity, reliability,
consistency and age
 Should make a distinction between the different kinds of information for
the purpose of communication. Say an action, a decision oriented
information should be distinguished from a non action/knowledge-oriented
information.
 To recognize some aspects of human capabilities as a decision maker.
Capabilities differ from manager to manager and the designer should
skillfully deal with them.
 It should meet the needs of the total organization.
 Recognizing that the information may be misused if it falls into wrong
hands, the MIS design should have the features of filtering, blocking,
suppressions, and delayed delivery.
MIS Planning
A very important fundamental concept of MIS planning is that the
organization's strategic plan (Business Plan) should be the basis
for MIS strategic plan.
Alignment of MIS strategy with organizational strategy is one of the
central problems of MIS planning.

The Information Master Plan establishes a framework for all detailed

information system planning.
Information Master Plan typically has one long-range plan for three to five
years (or more) and one a short-range plan for one year.
The long-range portion provides general guidelines for direction and short-
range portion provides a basis for specific accountability as to operational
and financial performance.
In general, plan contains four major sections:
 Information system goals, objectives and architecture (assessment of
organizational context);
 Inventory of current capabilities;
 Forecast of development affecting the plan;
 The specific plan.
Systems Development Life Cycle
(SDLC)
Activities that go into production of an MIS to an organizational
problem or opportunity:
 Project definition Determines whether or not the organization
has a problem and whether or not the problem can be solved by
launching a system project.
 Systems study Analyzes the problems of existing systems,
defines the objectives to be attained by a solution and evaluates
various solution alternatives.
 Design Logical and physical design specifications for the
systems solution are produced.
 Programming Specifications from design stage translated into
program code.
 Installation The final steps required to put a system into
operation or production: testing, training and conversion.
 Post-implementation System is used and evaluated while in
production and is modified to make improvements or meet new
requirements.
SDLC
Project definition & Systems study
Systems Analysis (study)
The analysis of a problem that the organization will try to solve with an
information system; describes what a system should do.

 Feasibility study A way to determine whether the solution is achievable,

given the organization's resources and constraints.

 Technical feasibility Determines whether a proposed solution can be

implemented with available hardware, software, and technical resources.

 Economic feasibility Determines whether the benefits of a proposed

solution outweigh the costs.

 Operational feasibility Determines whether a proposed solution is

desirable within the existing managerial and organizational framework.

 Information requirements A detailed statement of the information

needs that a new system must satisfy; identifies who needs what
information, and when, where and how the information is needed
Systems Design
Phase of detailing how a system will meet the information requirements
determined by the systems analysis. This phase is broken into two sub
phases:
1. Logical design 1st phase, lays out the components of the information
system and their relationship to each other as they would appear to
users.

2. Physical design 2nd phase, the process of translating the abstract

logical model into the specific technical design for the new system

Tools and Techniques used for designing:

Flow Chart Dataflow Diagrams (DFDs)
Data Dictionary Structured English
Decision Table Decision Tree

Design specifications include: Output, Input, User interface, Database

design, Manual procedures , Documentation etc..
Construction (Programming &
Testing)
 Programming
The process of translating the system specifications prepared during the
design stage into code
 Test plan
Prepared by the development team in conjunction with the users; it
includes all of the preparations for the series of tests to be performed on
the system.
 Testing
The exhaustive and thorough process that determines whether the system
produces the desired results under known conditions.
 Unit testing
The process of testing each program separately in the system. Sometimes called
program testing.
 System testing
Tests the functioning of the information systems as a whole in order to
determine if discrete modules will function together as planned.
 Acceptance testing
Provides the final certification that the system is ready to be used in a production
setting.
 Documentation
Descriptions of how an information system works from both the technical
and the end-user standpoint.
Installation
 Conversion
The process of changing from the old system to the new system.
 Conversion plan
Provides a schedule of all activities required to install a new system.
 Parallel strategy
A safe and conservative conversion approach where both the old system
and its potential replacement are run together for time until everyone is
assured that the new one functions correctly.
 Direct cut-over
A risky conversion approach where the new system completely replaces
the old one on an appointed day.
 Pilot study
A strategy to introduce the new system to a limited area of the
organization until it is proven to be fully functional; only then can the
conversion to the new system across the entire organization take place.
 Phased approach
Introduces the new system in stages either by functions or by
organizational units.
Post-implementation

 Production
The stage after the new system is installed and
the conversion is complete; during this time the
system is reviewed by users and technical
specialists to determine how well it has met its
original goals.
 Maintenance
Changes in hardware, software, documentation,
or procedures to production system to correct
errors, meet new requirements, or improve
processing efficiency
Software Development
Methodology: Approaches
The software development methodology is
an approach used by organizations and
project teams to apply the software
development methodology framework.
 Development Approach – Waterfall
Model
STAGES END PRODUCTS
Planning/definition Project proposal report
Study/analysis System proposal report
Design Design specifications

Programming Program code

Installation Testing and installation

Maintenance
Milestone 2 Postimplementation audit
Design
solution Milestone 4 Production
decision decision

OPERATIONS
Milestone 1 Milestone 3 Design
Project initiation specification sign-off
Year 1 Year 2 3-8 year lifespan
Development Approach – Waterfall
Model
Sequential development approach, in which development is seen as flowing
steadily downwards (like a waterfall).

Advantages
 Simple and easy to use.
 Easy to manage due to the rigidity of the model – each phase has specific
deliverables and a review process.
 Phases are processed and completed one at a time.
 Works well for smaller projects where requirements are very well
understood.
Disadvantages
 Adjusting scope during the life cycle can kill a project
 No working software is produced until late during the life cycle.
 High amounts of risk and uncertainty.
 Poor model for complex and object-oriented projects.
 Poor model for long and ongoing projects.
 Poor model where requirements are at a moderate to high risk of
changing.
Development Approach – Incremental
Model
Development Approach – Incremental
Model
The incremental model is an intuitive approach to the waterfall
model. Multiple development cycles take place here, making the life cycle
a “multi-waterfall” cycle. Cycles are divided up into smaller, more easily
managed iterations. Each iteration passes through the requirements,
design, implementation and testing phases.
Advantages
 Generates working software quickly and early during the software life
cycle.
 More flexible – less costly to change scope and requirements.
 Easier to test and debug during a smaller iteration.
 Easier to manage risk because risky pieces are identified and handled
during its iteration.
 Each iteration is an easily managed milestone.
Disadvantages
 Each phase of an iteration is rigid and do not overlap each other.
 Problems may arise pertaining to system architecture because not all
requirements are gathered up front for the entire software life cycle.
Development Approach - Spiral Model
Development Approach – Spiral Model
The spiral model is similar to the incremental model, with more
emphasis placed on risk analysis. The spiral model has four
phases: Planning, Risk Analysis, Engineering and Evaluation. A
software project repeatedly passes through these phases in
iterations (called Spirals in this model). The baseline spiral,
starting in the planning phase, requirements are gathered and risk
is assessed. Each subsequent spirals builds on the baseline spiral.

Advantages
 High amount of risk analysis
 Good for large and mission-critical projects.
 Software is produced early in the software life cycle.
Disadvantages
 Can be a costly model to use.
 Risk analysis requires highly specific expertise.
 Project’s success is highly dependent on the risk analysis phase.
 Doesn’t work well for smaller projects.
Development Approach :
Prototyping
Prototype: Preliminary working version of information system for demonstration,
evaluation purposes

Prototyping: Process of building experimental system quickly for demonstration and

evaluation. Small-scale mock-ups of the system are developed following an iterative
modification process until the prototype evolves to meet the users’ requirements

 Advantages:
 Useful in designing system’s end user interface
 Often faster
 Attempts to reduce inherent project risk by breaking a project into smaller
segments and providing more ease-of-change during the development process
 User is involved throughout the development process, which increases the
likelihood of user acceptance of the final implementation.

 Problems:
 Omission of basic requirements.
 Lack of documentation, testing.
 Prototyping tools may not be capable of developing complex systems.
Alternative Methodology: Object-
Oriented Development:
 Uses the object as the basic unit of systems
analysis and design
 Objects combine data, and processes used on the
data
 Use class and inheritance to group objects and
apply common embedded procedures
 Development is iterative and incremental
 Analysis identifies objects, classes of objects, and
behavior of objects.
Alternative Methodology:
End-User Development
 Development by end users with little or no
help formal assistance from technical specialist
 Allows users to specify their own business
needs
 Doesn’t require IT staff so is more rapid
 Appropriate mainly for smaller applications
 Generally not well designed, easily maintained
or efficient software
 Creates islands of software in firm, and
redundancies
Alternative Methodology:
Acquiring Software Packages
Commercial Off the Shelf (COTS) Packages
 Set of prewritten application software
programs that are commercially available
 Modification of software package to meet
organization’s needs may be required
 Customization:
 “Tailor and off the rack suit”
 Great if you are a close fit
 Ends up more trouble than worth if you aren’t
close fit..
Alternative Methodology :
Outsourcing
The purchase of an externally produced good or
service that was previously produced internally
 Advantages
 Economy
 Predictability
 Frees up human resources
 Disadvantages
 Loss of control
 Vulnerability of strategic information
 Dependency
Thank You