MANAGEMENT INFO SYS - INTRO.pdf

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UNIT I

INTRODUCTION

1.1 CONCEPTS OF DATA AND INFORMATION1.2 DEFINITION OF A MANAGEMENT INFORMATION SYSTEM

1.3 CONCEPTS OF DECISION MAKING

1.4 CONCEPTS OF SYSTEM

1.5 INFORMATION SYSTEMS AS A SYSTEM

1.5.1 ORGANIZATIONAL FUNCTION SUBSYSTEMS

1.5.2. ACTIVITIES SUBSYSTEMS

1.6 MIS AND OTHER DISCIPLINES

1.7 NEED FOR COMPUTER-BASED INFORMATION SYSTEM

1.8 THE ROLE OF A SYSTEMS ANALYST

1.9 EVOLUTION OF MANAGEMENT INFORMATION SYSTEMS

1.10

BUSINESS CASES

SUMMARY

REVIEW QUESTIONS

After reading this unit you could able to understand,

The distinction between data and information

Concepts of system and its classification

Concepts of information

Definitions of management information systems

Need for computer based information system

Functional and hierarchy levels of management

Evolution of Management information system



1.1 CONCEPTS OF DATA AND INFORMATION

Data the raw material for information is defined as groups of non random symbols

such as ₤ and which represent quantities, actions, objects etc. data items in information

systems are formed from characters. These alphabetic, numeric or special symbols areorganized for processing purposes into data structures, file structures and databases. Data

relevant to processing of information and decision making may also be in the form of text

images or voice. However, information generally defined as data that is meaningful or useful

to the recipient Data items are therefore the raw material for producing information.

For instance when I want to take decision of “purchasing of bike” mileages, pickup is

information where as kilometre from destination1 to destination 2 will be useful in

calculating the mileage and helps in taking decision termed data. The terms “information”

and “data” are frequently used interchangeably.

1.2 DEFINITION OF A MANAGEMENT INFORMATION SYSTEM

A definition of management information system, as the term is generally understood,

is an integrated, user – machine system for providing information to support operations,

management, and decision – making functions in an organization. The system utilizes

computer hardware and software; manual procedures; models for analysis, planning, control

and decision making; and a database. The fact that it is an integrated system does not mean

that it is a single, monolithic structure; rather, it means that the parts fit into an overall

design. The elements of the definition are highlighted below:

A management information system is an integrated user machine system for providing

information. To support the operation, management, analysis, and decision making function

in an organization

The system utilizes computer hardware and software manual procedures model for analysis,

planning, control and decision making and a database.

INTEGRATED SYSTEMS

Management information system is an integrated base for organizational individual

subsystems which is developed for and by users of various levels of organization. If the

system is not integrated, the individual applications may be inconsistent and incompatible.Data may not be compatible across applications that same data may be specified differently.

There may be chance for redundant modules when actually a single application serves more

than one need. A user wanting to perform analysis using data from two difficult applications

may find the task very difficult any sometimes impossible.

The first step to integrate diverse information system applications is to prepare an

overall information system plan which determines how they fit in with other functions. In

sort, the information system is designed as a planned federation of small individual sub

systems.

Information system integration is also achieved through standards, guidelines, and procedures set by the MIS functions. The enforcement of such standards and procedures



permits diverse applications to share data, meet audit and control requirements, and be shared

by multiple users. For instance an application may be developed to run on a particular small

computer. Standards for integration may dictate that the equipment selected be compatible

with existing computers and that the application be designed for communication with the

centralized database.

In the design of information system data and application is aparted. The separate

database is maintained while the integration is across many applications and to a variety of

users.

IMPORTANCE OF A DATABASE

The underlying concept of a database is that data needs to be managed in order to be

available for, processing and have appropriate quality. This data management includes both

software and organization. The software to create and manage a database is a database

management system.

When all access to and use of the database is controlled through a database

management system. All applications utilizing a particular data item access the same data

item which is stored in only one place. A single updating of the data item updates it for all

uses. Integration through a database management system requires a central authority for the

database. The data can be stored in one central computer or dispersed among several

computers; the overriding requirement is that there be an organizational function to exercise

control.

UTILIZATION OF MODELS

Data need to be processed to attain the decision in the business. To do this, processing

of data items is based on a decision model. For instance, an investment decision relative to

new capital expenditures might be processed in terms of capital expenditure decision model.

Decision model can be used to support different stages in the decision-making

process. “Intelligence” models can be used to search for problems and / or opportunities.

Models can be used to identify and analyze possible solution. Choice models such as

optimization models may be used to find the most desirable solution.

1.3 CONCEPTS OF DECISION MAKING

The word decision has been derived form the Latin word ‘decidere’ which means ‘a

cutting away or a cutting off. Thus, a decision involves a cut of alternatives between those

that are desirable and those that are not desirable. The decision is a kind of choice of a

desirable alternative. Decision making is a process to arrive at a decision; the process by

which an individual or organisation selects one position or action from several alternatives.

Shull et al have defined decision making as follows:

“Decision making is a conscious process involving both individual and social

phenomena based upon factual and value premises which conclude with a choice of one

behavioural activity from among one or more alternatives with the intention of moving

toward some desired state of affairs.”



Managers’ life is filled with making decisions after decisions. Looking at the role of

decision making in management, William Moore has equated it with management when he

says that “management means decision making.” In fact, decision making permeates all

managerial functions and classical management theorists have viewed it as the centre of

managerial activities. Though this classical view on decision making is not exactly true,

decision making is one of managers more challenging roles. This is the reason whyinformation systems designers have focused their maximum attention on designing systems

that help managers communicate and distribute information for decision making.

Decisions may be classified into various categories, which are,

Routine and non – routine.

Programmed and non – programmed

Strategic and tactical or operational decisions.

Programmed / structured and non - programmed / unstructured are mutually

exclusive. Strategic decisions are non - programmed and non - routine while tactical or

operational decisions are mostly routine and programmed. Therefore, understanding of programmed and non - programmed decisions is important.

PROGRAMMED DECISION OR STRUCTURED DECISION

Is routine decision which is made within the organizational system governing

policies and rules. These policies and rules are established well in advance to solve recurring

problems in the organisation. The factors affecting decision making are static and well –

structured. For example, the problem relating to recruitment of employees is solved by

recruiting those employees who meet selection criteria. These criteria are established by

recruitment policy and the managers have just to decide which employees meet selection

criteria and the decision is made accordingly. Programmed decisions are comparatively

easier to make as these relate to the problems which are solved by considering internal

organizational factors. Decisions are made by lower levels managers in the organization.

NON - PROGRAMMED DECISION OR UNSTRUCTURED DECISION

Is relevant for solving unique / unusual problem in which various alternatives cannot

be decided in advance. For such a decision, the situation is not well - structured and the

outcomes of various alternatives cannot be arranged in advance. For instance if an

organisation wants to take actions for expansion, it may have several alternative routes likegoing for a taking over or acquisition of an existing company. In each situation, the managers

evaluate the likely outcomes of each alternative to arrive at a decision consider ing various

factors, many of which lie outside the organisation. Non - programmed decisions are novel

and non-recurring. Therefore, readymade solutions are not available. Since these decisions

are of high importance because of their long - term consequences, these are made by

managers at higher levels in the organisation.

DECISION - MAKING CONDITIONS

The decision maker makes today’s decision for future conditions whose Impact is

known in future period. The future conditions for a decision vary along a continuum rangingfrom criteria of perfect certainty to condition of complete uncertainty.



In each of these conditions, knowledge of outcome of the decision differs. An

outcome defines what will happen if a particular alternative or course of action is chosen and

implemented. Knowledge of outcome of each decision alternative is important when there

are multiple alternatives and only one alternative is to be chosen. In the analysis for decision

making, three types of knowledge with respect to outcomes are usually distinguished asshown in Table.

TABLE 1.1

Conditions Outcome Knowledge of outcome

Certainty Only one outcome of each

alternative.

Complete and accurate

knowledge of the outcome of

each alternative

Risk Multiple outcomes for eachalternative

Probability of occurrence can be attached to each outcome.

Uncertainty Multiple outcomes for each

alternative

No knowledge of the

probability to be attached to

each outcome.

Table :-OUTCOMES IN DIFFERENT DECISION - MAKING CONDITIONS

Decision making strategy differs, based on the variation in the knowledge ofoutcomes of different alternatives in different decision – making conditions. The degree of

structuring in a decision can be seen in terms of continuum in which degree of structuring

varies as shown in table.

TABLE 1.2

Management

level

Nature of

decision

Level of

structuring

Support systems required

Strategic information systems

Expert systems

Executive support systems

Decision Support System

Management information

systems

Top

Lower

Strategic

Operational

Low

High

Transaction processing

systems

Office Automation system



TABLE: - MANAGERIAL DECISIONS, LEVEL OF STRUCTURING AND

SUPPORT SYSTEMS

As we move upward in managerial hierarchy, we find that the degree of structuring in

decision making gets gradually reduced and support systems required for decision makinggradually tend to be unstructured. After clarifying the concept of decision and decision

making as well as type of decisions, let us understand the decision making process by which

a decision is arrived.

DECISION - MAKING PROCESS FIGURE 1.1

Decision is the outcome of a dynamic process which is

consist of various steps and involves various factors. Process of

decision making process has been shown in Figure.

Choosing an

alternative

Implementation

Problem

identification

Alternative

generation

Process presented is more relevant for non - programmed

decisions. Problems that occur infrequently are unstructured

and are characterized by a great deal of uncertainty regarding

the outcomes of various alternatives; require the managers to

utilize the entire process. For frequently occurring structured

problems, it is not necessary to consider the entire process

because decision rules are developed to handle such problems

and it is not necessary to develop and evaluate various

alternatives each time such a problem arises.

PHASES IN DECISION - MAKING PROCESS

PROBLEM IDENTIFICATION

In this phase of decision-making process involves searching the environment for

conditions calling for decisions. the problem is identified and formulated. A problem is the

difference between current state of affairs and expected state of affairs on the subject matter

of decision.

For instance, in organizational scenario, a problem will be found when there is

diversion outcome from the desired results. Manager develop the suitable model and tries to

identify the problem existence.

Without formulating the problem the identified problem seems to vague. At this

stage, the problem identified earlier, is more precisely defined and complexity get clarified.

MacGrimmon and Taylor have suggested four strategies for reducing complexity and

formulating a problem:

1. Determining the boundaries (clearly identifying what is included in the problem).



2. Examining changes that may have precipitated the problem.

3. Factoring the problem into smaller sub-problems.

4. Focusing on controllable elements.

ALTERNATIVE GENERATION

In this phase, decision maker generates possible alternatives through which the

problem can be solved. If there is only one way of solving a problem, no question of decision

arises. So, the decision maker must try to find out the various alternatives available in order

to get the most satisfactory result of a decision. Identification of various alternatives not only

serves the purpose of selecting the most satisfactory one, but It also avoids bottlenecks in

operation as alternatives are available if a particular decision goes wrong. However, it should

be borne in mind that it may not be possible to consider all alternatives either because some

of the alternatives cannot be considered for selection because of obvious limitations of the

decision maker or information about all alternatives may not be available. Therefore, while

generating alternatives, the concept of limiting, factor should be applied.

A decision maker can use several sources for identifying alternatives - his own past

experience; practices followed by others, using creative forecasting and statistical techniques,

research.

CHOOSING AN ALTERNATIVE

In this phase, the best alternative is chosen to solve the problem. Evaluation of

various alternatives presents a clear picture as to how each of these contributes to solution of

the problem. A comparison is made among likely outcomes of the various alternatives and

the most appropriate one is chosen. Choice aspect of decision making is, thus, related to

deciding the most acceptable alternative which fits with the organisational objectives. It may

be seen that the chosen alternative should be acceptable in the light of organisational

objectives, and it is not necessary that the chosen alternative is the best one. However, all

alternatives available for decision making will not be taken for detailed evaluation because of

the obvious limitations of managers in evaluating all alternatives.

IMPLEMENTATION

Even though the actual process of decision making ends with the choice of an

alternative through which the objectives can be achieved, this phase will help manager to rknow what way their choice has contributed. The implementation of decision may be seen as

an integral aspect of decision.

Implementation of a decision requires the communication to subordinates, getting

acceptance of subordinates over the matters involved in the decision, and getting their

support for putting the decision into action. The decision should be effected at appropriate

time and in proper way to make the implementation more effective. The effectiveness of

implementation is important because it is only effective action through which organisational

objectives can be achieved. When a decision is put into action, it brings certain results. These

results provide indication whether decision making and its implementation is proper.

Therefore, managers should take follow-up action in the light of feedback received from theresults. If there is any deviation between objectives and results, this should be analyzed and



factors responsible for this deviation should be located. The feedback may also help in

reviewing the decision when conditions change which may require change in the decision.

METHODS OF DECIDING AMONG ALTERNATIVES

There are different methods to evaluate various alternatives through which a problemcan be solved. In evaluating alternatives, an attempt is made to find out the likely outcome of

each alternative so that the alternative which is likely to provide maximum outcome is

chosen. In evaluating the likely outcomes of various alternatives, generally, following

methods are used:

1.

Optimization techniques.

2. Pay-off matrices.

3. Decision tree.

4. Decision table.

5. Game theory.

6.

Elimination by aspects.7. Decisional balance sheet

1.4 CONCEPTS OF SYSTEM

DEFINITION

Systems can be abstract or physical. An abstract system is an orderly arrangement of

interdependent ideas or constructs. For example, a Weapons system is an orderly

arrangement of the equipment, procedures, and personnel which make it possible to use a

Weapon. Accounting system consists of the records, rules, procedures, equipment, and

personnel which operate to record data, measure income, and prepare reports. Circulatory

system involves the heart and blood vessels which move blood through the body.

A physical system is a set of elements which operate together to accomplish an

objective. Computer system consists of several subsystems which functions together to

accomplish computer processing. Computer system is demonstrated as a simple system

model in the following figures.

FIGURE 1.2

Process

Input Output

System model



FIGURE 1.3

External

Interfaces

Processing Subsystem

memory

units

Input Subsystem

OutputCPU

Output Subsystem

Input

Storage Subsystem

Figure: Computer as system

DETERMINISTIC AND PROBABILISTIC SYSTEMS

A deterministic system produces output in a predictable in nature. The interaction

between the subsystems will have the elements with certainty. When you describe system

based on the state of the system at a given point in time its and operation, the next state of the

system will be produced exactly, without error. An example is a correct combination of

elements and solution in the specified constraint will produce exactly known output.

The probabilistic system is named based on it probabilistic nature; so there are chance

for error on the prediction of the output of the system. A pricing system (for instance share

market price) is a probabilistic system which involves prediction of demand and market. But

the exact value at any given time is not known.

CLOSED AND OPEN SYSTEMS

A closed system is defined as a system of self-contained which does not exchange

material, information, or energy with its external environment. For instance, atom

radioactivity reaction in a insulated sealed, container is a closed systems will becomedisorganized at the end.



Open systems exchange information, material, energy with the environment. For

instance, humans and organizational systems are examples of open systems. Open system

will react to the changes in the external environment and surveys in the environment.

SUBSYSTEMS

The system is integration of various subsystems and interfaces between them. This is

a basic concept in analysis and development of systems. A development of complex system

is tedious, so the system is decomposed into subsystems. This process of decomposition of

system is continued until subsystems could be of independent in behaviour and manageable

in size. For instance the funds management system is described in the figure as a combination

of subsystems.

FIGURE 1.4

Funds

Management

s stem

Working

capital

processing

Check

Printing Cash flow

system

processing

Internal fund

flow

processing

1.5 INFORMATION SYSTEM AS A SYSTEM

The information system processes the received inputs of data and produces the

outputs. The basic system model consists of input, process, and output as well as the data

storage. Instead of collecting data and transforming data to information, keeping the storage

will help in subsequent use. This basic information processing model is useful in

understanding not only the overall information processing system but also the individual

information processes applications. Each application may be analyzed in terms of input,storage. Processing and output. The information processing system has functional subsystems

and activities based subsystem.



FIGURE: 1.5

Management

Control

Strategic

Planning


HigherLevel

Management

LowerLevel

Managementand

clerical

Operational

Control

nstructured

Structured

decisions

The management information system has been described as a pyramid structure in

which the bottom layer consists of information for transaction processing, status inquiries,

etc; the next level consists of information recourses in support of day – to – day operation

and control; the third level consists of information system resources to aid in tactical

planning and decision making for management control; and the top level consists of

information resources to support strategic planning and policy making by higher levels of

management. Each level of information processing may make use of data provided for

lower levels; but new data about activities external to the organization may also be

introduced.



FIGURE 1.6

Management

Control & DM(DSS,EIS)

Strategi

cPlannin

Transaction processing & DM(TPS,OAS)

Operational Control & DM

(MIS,DSS)

S A L E S A N D M

A R K E T I N G S U B S Y S T E M S

Integrated database

P R O D U C T I O N S U B S Y S T E M

L O G I S T I C S S U B

S Y S T E M

P E R S O N N E L S U

B S Y S T E M

F I N A N C E A N D A C C O U N T I N G S U B S Y S T E M

Figure: Conceptual frame work of Management Information Systems

SUBSYSTEMS OF AN MIS

Management Information System is comprehension of subsystem. There are two

categories of subsystems. One is based on the organizational functions which they support

and another one is based on managerial activities for which they are used.

1.5.1 ORGANIZATIONAL FUNCTION SUBSYSTEMS

The organizational functions are separable in nature based on the managerial

responsibility. Each functional subsystem has its own characteristic, procedure and models,

etc. Some of the support systems and data used for the subsystem is common for more than

one subsystems Typical major subsystems for a business organization engaged in

manufacturing are:



TABLE 1.3

Functional subsystem Functionality of the subsystem

Marketing

Market research

Market testingDemand forecasting

Sales planning

Manufacturing

Material resource planning

Scheduling

Resource allocation

Cost control

Logistics

Stock analysis

Inventory control

Distribution

Personnel

Human resource Planning

Performance appraisal

Administrative controlPayroll

Finance and accounting

Financial control

Cost analysis

Capital budgeting

Income measurement

1.5.2. ACTIVITIES SUBSYSTEMS

Another approach to understanding the structure of an information system is in terms

of the subsystems which perform various activities. Some of the activities subsystems will beuseful for more than one organizational function subsystem; others will be useful for only

one function. Examples of major activities subsystems are:

TABLE 1.4

Activity subsystem Some typical applications


Processing of orders shipments and

Receipts

Operational control Scheduling, analysis of performance reports

Management control Budget preparation and resource allocation

Strategic planning Formulation of objectives and strategic plans



TABLE 1.5

Level of

management

Definition Comments

Strategic

planning

What will the organization serve

and what will it be like after five

years and beyond? Strategic plan

should include business to be in,

market it should sell to, etc.

Definition of goals, policies,

and general guidelines

charting course for

organization. Determination

of organizational objectives.

Tactical

planning

Physical implementation of

strategic plans from one to five

years. Reflected in capital

expenditure budget and long - range

staffing plan. What is the optimal

product pricing pattern?

Acquisition of resources

Acquisition tactics, plant

location, new products.

Establishment and monitoring

of budgets.

Operationsplanning

Allocation of tasks to eachorganizational unit in order to

achieve objectives of tactical plan

between one to twelve months.

Yearly budget.

Effective and efficient use ofexisting facilities and

resources to carry out

activities within budget

constraints.

TRANSACTION PROCESSING SYSTEM AND OFFICE AUTOMATION SYSTEM

TPS serve the need of operational level of the organization. It is defined as recording

the daily day to day transactions basis for the conduct of business. It is highly structured.

Transaction processing is performed manually or with mechanical machines; computer-baseddata processing has altered the speed and complexity of transaction processing, but not the

basic function.

TPS are major producers of information for other types of systems available in

various other level of management. Without transaction processing, normal organizational

functioning would be impossible, and the data for management activities would not be

available. For instance, in banking the transaction processing systems supply data to the

organization’s ledger which are responsible for maintaining records of the organization for

analyzing the performance of the organization through balance sheet and so on. TPS can

connect the organization with its stake holders (customers and suppliers).

The transaction processing cycle begins with a transaction which is recorded in some

way. Although hand-written forms are still very common, transactions are often recorded

directly to a computer by the use of an online terminal. Recording of the transaction is

generally the trigger to produce a transaction document. Data from the transaction is

frequently required for the updating of master files; this updating may be performed

concurrently with the processing of transaction document or by a subsequent computer run.



FIGURE 1.7

Valid

Transaction

records

CorrectionInvalid

Records

Conversion

fromForm to

Records

InputValidation

Transactions form

Transactions report

Assemble hatch

Sales or purchase

transactions entry

Control

log

Figure: Transaction processing cycle.

Office automation is a popular term for the application of computer and

communications technology to office functions. It supports not only clerical office work but

also the work of management and professionals. Document preparation, message and

document communications, and public data services are some of the examples of OAS.



Office automation has a number of applications ranging from internal communication to

long-distance external communication. The major applications of office automation are in

following areas:

Word processing.

Desktop publishing.

Videotex.Document imaging.

Electronic mail.

Electronic calendaring.

Video & Audio conferencing.

Facsimile transmission.

Decision support system and executive information system and expert system are

used in middle and top level of management which will be discussed in unit 3.

1.6 MIS AND OTHER DISCIPLINES

Concepts of MIS are found in management accounting, management and organization

theory, operations research, and computer science.

MANAGEMENT ACCOUNTING

Financial accounting and management accounting are the broader categories of

management accounting. Financial accounting deals with the measurement of profit for

accounting period and analysing the financial status at the end of the period. This will be

helpful for the stakeholders. It will have limited decision content towards management. In

contrast management accounting consists methods and concepts which is necessary for

planning, choosing among alternative business actions and control through the evaluation and

interpretation of performances. Here, the management accounting provides inputs for

decision making in the areas of planning and control.

BEHAVIOURAL THEORY

MIS helps in effective functioning of the organization. The fields of management and

behavioural theory helps in understanding the functions of a MIS and behaviour of the

managers in each level of the organization such individual decision making and group

decision making, individual and team motivation, leadership styles and traits of leader,

organizational change management and group dynamics, and organisation structure andculture and so on. The knowledge of these concepts helps the designer of MIS to understand

the behaviour pattern and the types of decisions made by manager at each level of the

organization.

OPERATIONS RESEARCH

Operations research is a quantitative technique in managerial decision theory where

the managers search for the optimum result. In operations research, various mathematical and

decisive models are used for solving the problems. Operations research concepts are helpful

in development of models for “what if” analysis mainly used in DSS, MIS and helps in

computer - based solutions of many types of decision problems. In other word the systematic



approach to problem solving, use of models, and computer-based solutions are generally

incorporated in the decision support system.

COMPUTER SCIENCE

Computer science deals with the hardware and software of computer systems. Theknowledge of computer science enables information storage, processing, and retrieval faster.

Computer science covers the concepts of algorithms, computation and data structures which

are important in development of MIS. However, modern MIS is not merely an extension of

computer science but the emphasis in MIS is on the application of the technical capabilities

that computer science has made available. The fundamental processes of management

information systems are more related to organizational processes and organizational

effectiveness then computer algorithms.

Various academic disciplines are contributing to the development of MIS and it is

considered a separate field of study. Other academic disciplines help in designing and

developing MIS.

1.7 NEED FOR COMPUTER-BASED INFORMATION SYSTEM

As long as organizations are small and have limited operational goals manual

information systems are satisfactory. Many trends in the development of industry and

commerce have made computer -based information systems essential to efficiently run

organizations. These are: -

The size of organizations is becoming larger. This is particularly true in India due to

increase in population and rapid rate of industrial development.

Computer - based processing enables the same data to be processed in many ways,

based on needs, thereby allowing managers to look at the performance of an organization

from different angles.

As the volume of data has increased and the variety of information and their

timeliness is now of great importance, computer – based information processing has now

become essential for efficiently managing organizations.

Organizations are now distributed with many branches.Markets are becoming

competitive. To maintain favorable balance of payments in a country, organizations have to be internationally competitive.

The general socio - economic environment demands more up-to-date and accurate

information. Human systems are changing faster than ever before. Governmental regulations

have become complex. Organizations have to interact with many other interested parties such

as consumer groups, environmental protection groups, financial institutions, etc., which did

not exist before.

All the above developments demand decision making based on up-to-date, well

analyzed and presented information rather than thumb rules and hunches of an earlier era.



1.8 THE ROLE OF A SYSTEMS ANALYST

MIS is possible without computer too. When the organization goes for the computer

based information system the role of the system analyst plays a vital role. A systems

analyst’s primary responsibility is to identify information needs of an organization and obtain

a logical design of an information system which will meet these needs. Such an informationsystem will be a combination of manual and computer - based procedures to process a

collection of data, useful to the managers in taking decisions. He must have the knowledge of

the data flow and process of the organization.

The personnel involved in the management information systems are: end users (clerical,

operational and top level managers); professionals (database administrator, programmers).

The systems analyst coordinates the efforts of all these personnel to effectively develop and

operate computer - based information systems.

The requirement must be collected from the users of the system. Users may not bevery familiar with coding terminology. The system analyst must collect the requirement from

the users of the information systems. This is best achieved by having a common meeting with

all the users and arriving at a consensus.

The systems analyst requires good interpersonal relations and diplomacy. He must be able to

convince all the users about the soundness of the group decision and obtain their cooperation.

An analyst studies the problem in depth and helps in choosing the best solutions and the

relative difficulties in implementing each of other alternatives.

An analyst is responsible in obtaining the functional specification; it must be precise and

detailed. it must be non - technical so as users ,clerks, middle level managers and top

managers of organization able to understand.

He is also responsible to design the system which must be understandable, accommodate

changes easily. The analyst must know the latest design tools to assist him in his task. As part

of the design he must also create a system test plan.

A systems analyst must be familiar with all the functions of the organizations. He

must aware of new technological changes since he is responsible for the feasibility analyses.

He must be a good listener,a good communicator, a good diplomat, conflict revolver

,motivator, influencer.

1.9 EVOLUTION OF MANAGEMENT INFORMATION SYSTEMS

Based on the needs and requirements of the organization MIS has been evolving

though the period of time. MIS was manually operational before the invention of computer

application in this area. The following table illustrates the evolution of information system.

TABLE 1.6

Decade Information systems Characteristics of information systems

1951-60 Electronic data processing Collecting, manipulating, storing of data.

No scope for decision making1961-70 Management information Pervasive in all level of the management



system decisions.

Solution for structured decisions.

1971-80 Decision Support System,

expert system

Analytical models for semi structured

decisions

1981 andabove Artificial intelligence,Executive information

system

Solution for unstructured decision makingthrough advanced graphics

1985 and

above

Knowledge management

system,end user computing

Intelligence workstation for knowledge

work which involves thinking, processing

information and formulating analyses ,

recommendations and procedures

1.10 BUSINESS CASES

All organizations are divided into many departments or sections with each department

having an assigned functional responsibility. Consider for example, an educational institute

such as Anna University. It will typically have besides academic departments a central

administrative office. The administrative office will be divided in to many sections each with

an assigned function. Typically the functions will be student section which will normally deal

with student records, students admission etc. an accounts section, purchase section stores

section, personnel section, medical section and student hostel office. A hierarchical chart of

the sections is shown in figure and their functions in table. A manufacturing organization for

instance will have the functions shown in table division of an organization in to departments

with specified functions is mainly intended to let each department focus on an area of

responsibility. All departments will have to coordinate their activities to meet the overall

objectives of the organization. This coordination normally provided by higher levelmanagement in the organization.Functions of various departments of a University.

TABLE 1.7

Sections Functions

Student section Students’ admission records

Administering admission tests

Students’ academic records

Students’ registration information

Placement

Accounts section University budget

Payroll

General ledger of receipts/ payments

Purchase section Scholarships

Order processing

Stores Vendor selection

Stock register maintenance

Issues



Hostel office Receipts

Mess records

Hostel purchases / stores

Room assignment

Medical centre Residents’ data

Medical records

Works department Medicine purchase/ stores

Building construction

Building maintenance

Supply Maintenance of electrical

installations, water

Personnel Maintenances of roads, gardens

Personnel records (leave, tenure)

Personnel assessment

Miscellaneous Personnel recruitment

Mailing

Telephones

Transport

We looked at two diverse organizations in this section – a University and

manufacturing organization. Functions of various departments of a manufacturing

organization.

TABLE 1.8

Sections Functions

Production Production planning and

control

Maintenance management

Bill of materials processing

Marketing

Finance

Order processing

Advertising

Customer records/follow upSales analyses

Billing, payments

Payroll

Costing

Share accounting

Budget and finance planning

Tax planning

Resource mobilization

Personnel Recruitment

Records

Training

Deployment of laborAssessment/promotions



Stores Stock ledger keeping

Issues/reorder

Receipts

Enquiry processing

Purchase Order processing

Vendor developmentVendor selection

Maintenance Physical facilities

Communication facilities

Electricity and water supply

Research and

development

Production improvement

Product development

Product testing

Product design

We see that there are some common functions such as personnel, purchase, stores and

accounts and there are organization specific functions such as students section in a universityand production section in a manufacturing organization. This is a general observation.

Information processing methods, however, have general features regardless of the

organization for which they are designed.

SUMMARY

The vital role of information in an organization has been discussed. how the

manager should react to the information of external environment and internal environment.

The information systems have become essential for helping organizations deal with changes

in global economies and the business. The kinds of systems built today are very important for

the organization’s overall performance, especially in today’s highly globalize andinformation- based economy. Information systems are driving both daily operations and

organizational strategy. Powerful computers, software and networks, including the internet ,

have helped organizations become more flexile , eliminate layers of management , separate

work from location , coordinate with suppliers and customers, and restructure work flows ,

giving new powers to both line workers and management. Information technology provides

managers with tools for more precise planning forecasting and monitoring of the business. To

maximize the advantages of information technology, there is a much greater need to plan the

organization’s information architecture and information technology infrastructure.

REVIEW QUESTIONS

1. Define Management Information systems.

2. What is system? Discuss some systems you know.

3. Discuss the types of subsystem in each level of the management.

4. Explain the subsystem based on the functionality of the organization.

Documents

MANAGEMENT INFO SYS - INTRO.pdf