MANAGEMENT

INFORMATION
SYSTEM
WE USE
TECHNOLOGY
TO IMPROVE
PEOPLE'S LIVES
WHAT IS
MANAGEMENT
INFORMATION
SYSTEM?
• A COMPUTERIZED INFORMATION-PROCESSING SYSTEM DESIGNED TO
SUPPORT THE ACTIVITIES OF COMPANY OR ORGANIZATIONAL
MANAGEMENT (DICTIONARY.COM)
• IS A PLANNED SYSTEM OF COLLECTING, STORING, AND DISSEMINATING
DATA IN THE FORM OF INFORMATION NEEDED TO CARRY OUT THE
FUNCTIONS OF MANAGEMENT.
WHAT IS MANAGEMENT INFORMATION SYSTEM?

A management information system (MIS) is a computerized database of financial information organized and
programmed in such a way that it produces regular reports on operations for every level of management in a
company

The main purpose of the MIS is to give managers feedback about their own performance; top management
can monitor the company as a whole. Information displayed by the MIS typically shows "actual" data over
against "planned" results and results from a year before; thus it measures progress against goals.

MIS is a collection of systems, hardware, procedures and people that all work together to process, store, and
produce information that is useful to the organization.
 Decision makers need information to make effective
decisions. Management Information Systems (MIS) make this possible.

THE NEED FOR MIS systems facilitate communication within and outside the
organization – employees within the organization are able to easily
MIS access the required information for the day to day operations. Facilitates
such as Short Message Service (SMS) & Email make it possible to
communicate with customers and suppliers from within the MIS system
that an organization is using.

Record keeping – management information systems record all

business transactions of an organization and provide a reference point
for the transactions.
COMPONENTS OF MIS

Business Procedures –
People – people who use Data – the data that the procedures put in place on
the information system information system records how to record, store and
analyze data

Software – these are

Hardware – these include programs used to handle the
servers, workstations, data. These include programs
networking equipment, such as spreadsheet
printers, etc. programs, database software,
etc.
TYPES OF INFORMATION SYSTEMS
Transaction Processing Systems (TPS)
This type of information system is used to record the day
to day transactions of a business. An example of a
Transaction Processing System is a Point of Sale (POS)
system. A POS system is used to record the daily sales.
Management Information Systems (MIS)
Management Information Systems are used to guide
tactic managers to make semi-structured decisions. The
output from the transaction processing system is used as
input to the MIS system.
Decision Support Systems (DSS)
Decision support systems are used by top level managers
to make semi-structured decisions. The output from the
Management Information System is used as input to the
decision support system. DSS systems also get data input
from external sources such as current market forces,
competition, etc.
 Data is the bloodstream of any business
entity.
MANUAL
INFORMATION
SYSTEMS VS
Everyone in an organization needs
COMPUTERIZED information to make decisions.
INFORMATION
SYSTEMS (MIS)
An information system is an organized
way of recording, storing data, and
retrieving information.
 A manual information system does not use any
computerized devices. The recording, storing and
retrieving of data is done manually by the people, who
are responsible for the information system.
MANUAL
INFORMATION
SYSTEM

The following are the major components of a manual

information system
Business Procedures –
Reports –the reports are
these are measures put in
People –people are the Data –these are the Filing system – this is an generated after manually
place that define the rules
recipients of information recorded day to day organized way of storing analyzing the data from the
for processing data, storing
system transactions information filing system and compiling
it, analyzing it and
it.
producing information
  The following are the advantages of manual
information systems
 Cost effective – it is cheaper compared
to a computerized system because there is
ADVANTAGES no need to purchase expensive equipment
such as servers, workstations, printers, etc.
 Flexible –evolving business requirements
can easily be implemented into the
business procedures and implemented
immediately
 Time consuming –all data entries need to be verified before filing, this is a time
consuming task when done by humans. Retrieving data from the filing system also
takes a considerable amount of time

Prone to error – the accuracy of the data when verified and validated by human
beings is more prone to errors compared to verification and validation done by
computerized systems.

Lack of security – the security of manual systems is implemented by restricting

DISADVANTAGES access to the file room. Experience shows unauthorized people can easily gain access
to the filing room
Duplication of data –most departments in an organization need to have access to
the same data. In a manual system, it is common to duplicate this data to make it easy
to accessible to all authorized users. The challenge comes in when the same data
needs to be updated

Data inconsistency – due to the duplication of data, it is very common to update

data in one file and not update the other files. This leads to data inconsistency

Lack of backups – if the file get lost or mishandled, the chances of recovering the
data are almost zero.
  Computerized systems were developed to
address the challenges of manual information
systems. The major difference between a
manual and computerized information system
is a computerized system uses a combination
COMPUTERIZED
of software and hardware to record, store,
INFORMATION
analyze and retrieve information.
SYSTEM
 Fast data processing and information retrieval – this is one of the biggest
advantages of a computerized information system. It processes data and retrieves
information at a faster rate. This leads to improved client/customer service

Improved data accuracy – easy to implement data validation and verification

checks in a computerized system compared to a manual system.

Improved security – in addition to restricting access to the database server, the

ADVANTAGES computerized information system can implement other security controls such as
user’s authentication, biometric authentication systems, access rights control, etc.

Reduced data duplication – database systems are designed in such a way that
minimized duplication of data. This means updating data in one department
automatically makes it available to the other departments

Improved backup systems – with modern day technology, backups can be stored
in the cloud which makes it easy to recover the data if something happened to the
hardware and software used to store the data

Easy access to information – most business executives need to travel and still be
able to make a decision based on the information.The web and Mobile technologies
make accessing data from anywhere possible.
 It is expensive to set up and configure – the organization has
to buy hardware and the required software to run the information
system. In addition to that, business procedures will need to be
revised, and the staff will need to be trained on how to use the
computerized information system.

DISADVANTAGES Heavy reliance on technology – if something happens to the

hardware or software that makes it stop functioning, then the
information cannot be accessed until the required hardware or
software has been replaced.

Risk of fraud – if proper controls and checks are not in place, an

intruder can post unauthorized transactions such as an invoice for
goods that were never delivered, etc.
 Data can be described as unprocessed facts and figures. Plain
collected data as raw facts cannot help in decision making.
However, data is the raw material that is organized,
structured, and interpreted to create useful information
INFORMATION VS systems.
DATA

Information is interpreted data; created from organized,

structured, and processed data in a particular context.
 Accurate – information must be free from errors and mistakes. This is achieved
by following strict set standards for processing data into information.

Complete – all the information needed to make a good decision must be

available. Nothing should be missing.
DEFINITION OF
DATA AND Cost Effective – the cost of obtaining information must not exceed the benefit
of the information in monetary terms.
INFORMATION AND
CHARACTERISTICS User-focused – the information must be presented in such a way that it should
address the information requirements of the target user.
OF GOOD
INFORMATION Relevant – the information must be relevant to the recipient. The information
must be directly related to the problem that the intended recipient is facing.

Authoritative – the information must come from a reliable source.

Timely – information should be available when it is needed.

COMPETITIVE Competitive advantage is a position
ADVANTAGE that makes a business more profitable
than its competitors.
OF
INFORMATION
AND MIS For example, producing products at a
lower cost than your competitors
makes you more profitable.
COMPETITIVE ADVANTAGE OF INFORMATION AND MIS

Operational excellence

• operational excellence seeks to improve the operations of the business.

New business models, products, and services

Improved supplier and customer relations

Improved decision making

 Think of a company such
as Apple Inc.
Why are they successful?
QUESTION?
 Why do customers love
and buy the iPhone?
  The value chain also known as Porter’s Value Chain
Analysis is a business management concept that was
developed by Michael Porter. In his book Competitive
Advantage (1985), Michael Porter explains Value Chain
Analysis; that a value chain is a collection of activities
PORTER’S that are performed by a company to create value for
VALUE CHAIN its customers. Value Creation creates added value
ANALYSIS which leads to competitive advantage. Ultimately,
added value also creates a higher profitability for an
organization.
 Primary activities – these are activities that are related to
MICHAEL PORTER. the creating products/services, marketing and sales, and
support. Primary activities consist of inbound logistics,
operations, outbound logistics, marketing and sales, and
PORTER'S VALUE service.
CHAIN HAS TWO
ACTIVITIES
Support activities – these are activities that support the
primary activities. Support activities consist of procurement
(purchasing), human resource management, technological
development and infrastructure.
PORTER'S VALUE CHAIN
INBOUND  These are all processes that are
involved in the receiving, storing,
LOGISTICS and internal distribution of the
raw materials or basic
ingredients of a product or
service. The relationship with
the suppliers is essential to the
creation of value in this matter.
  These are all the activities (for
example production floor or
production line) that convert inputs
PRODUCTION of products or services into semi-
finished or finished products.
Operational systems are the guiding
principle for the creation of value.
OUTBOUND  These are all activities that
are related to delivering the
LOGISTICS
products and services to
the customer. These include,
for instance, storage,
distribution (systems) and
transport.
  These are all processes related to
putting the products and services in
MARKETING the markets including managing and
generating customer relationships.
AND SALES The guiding principles are setting
oneself apart from the competition
and creating advantages for the
customer.
SERVICE  This includes all activities
that maintain the value of
the products or service to
customers as soon as a
relationship has developed
based on the procurement
of services and products.
  This concerns the support activities
within the organization that enable the
FIRM organization to maintain its daily
INFRASTRUCTURE operations. Line management,
administrative handling, financial
management are examples of activities
that create value for the organization.
HUMAN  This includes the support
activities in which the
RESOURCE development of the workforce
MANAGEMENT within an organization is the key
element. Examples of activities
are recruiting staff, training and
coaching of staff and
compensating and retaining staff.
  These activities relate to the
development of the products and
services of the organization, both
TECHNOLOGY internally and externally. Examples are IT,
DEVELOPMENT technological innovations and
improvements and the development of
new products based on new
technologies. These activities create value
using innovation and optimization.
  These are all the support activities
related to procurement to service
PROCUREMENT the customer from the organization.
Examples of activities are entering
into and managing relationships with
suppliers, negotiating to arrive at the
best prices, making product purchase
agreements with suppliers and
outsourcing agreements.
Organizations use primary and
support activities as building blocks
to create valuable products, services
and distinctiveness.
 How do you apply the
Porter’s Value Chain Analysis
in your work?
ACTIVITY

What are your success

factors for the good Value
Chain Analysis set up?