MANAGEMENT INFORMATION SYSTEM

A management information system (MIS) focuses on the management of information technology to provide efficiency and effectiveness or strategy decision making. The concept may include systems termed transaction processing systemdecision support systemexpert system, or executive information system. The term is often used in the academic study of businesses and has connections with other areas, such as information systemsinformation technologyinformaticse-commerce and computer science; as a result, the term is used interchangeably with some of these areas.

Management information systems (plural) as an academic discipline studies people, technology, organizations, and the relationships among them.[1] This definition relates specifically to “MIS” as a course of study in business schools. Many business schools (or colleges of business administration within universities) have an MIS department, alongside departments of accounting, finance, management, marketing, and may award degrees (at undergraduate, master, and doctoral levels) in Management Information Systems.

MIS professionals help organizations to maximize the benefit from investments in personnel, equipment, and business processes

HISTORY

Kenneth and Aldrich Estel identify six eras of Management Information System evolution corresponding to the five phases in the development of computing technology:

  1. mainframeand minicomputer computing,
  2. personal computers,
  3. client/servernetworks,
  4. enterprise computing, and
  5. cloud computing.

The first era (mainframe and minicomputer) was ruled by IBM and their mainframe computers; these computers would often take up whole rooms and require teams to run them—IBM supplied the hardware and the software. As technology advanced, these computers were able to handle greater capacities and therefore reduce their cost. Smaller, more affordable minicomputers allowed larger businesses to run their own computing centers in-house / on-site / on-premises.

The second era (personal computer) began in 1965 as microprocessors started to compete with mainframes and minicomputers and accelerated the process of decentralizing computing power from large data centers to smaller offices. In the late 1970s, minicomputer technology gave way to personal computers and relatively low-cost computers were becoming mass market commodities, allowing businesses to provide their employees access to computing power that ten years before would have cost tens of thousands of dollars. This proliferation of computers created a ready market for interconnecting networks and the popularization of the Internet. (NOTE that the first microprocessor — a four-bit device intended for a programmable calculator — was introduced in 1971 and microprocessor-based systems were not readily available for several years. The MITS Altair 8800 was the first commonly known microprocessor-based system, followed closely by the Apple I and II. It is arguable that the microprocessor-based system did not make significant inroads into minicomputer use until 1979, when VisiCalc prompted record sales of the Apple II on which it ran. The IBM PC introduced in 1981 was more broadly palatable to business, but its limitations gated its ability to challenge minicomputer systems until perhaps the late 1980s to early 1990s.)

As technological complexity increased and costs decreased, the need to share information within an enterprise also grew—giving rise to the third era (client/server), in which computers on a common network access shared information on a server. This lets thousands and even millions of people access data simultaneously. The fourth era (enterprise) enabled by high speed networks, tied all aspects of the business enterprise together offering rich information access encompassing the complete management structure. Every computer is utilized.

The fifth era (cloud computing) is the latest and employs networking technology to deliver applications as well as data storage independent of the configuration, location or nature of the hardware. This, along with high speed cellphone and Wi-Fi networks, has led to new levels of mobility in which managers may access the MIS remotely with laptopstablet computers and smartphones.

TYPES AND TERMINOLOGY

The terms management information system (MIS), information systementerprise resource planning (ERP), and information technology management (IT) are often confused. Information systems and MIS are broader categories that include ERP. Information technology management concerns the operation and company of information technology resources independent of their purpose.

  • Management information systems, produce fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systemsto middle and operational level managers to identify and inform semi-structured decision problems.
  • Decision support systems(DSS) are computer program applications used by middle and higher management to compile information from a wide range of sources to support problem solving and decision making. A DSS is used mostly for semi-structured and unstructured decision problems.
  • Executive information systems(EIS) is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting, human resources and operations.
  • A Marketing Information Systemsare Management Information Systems designed specifically for managing the marketing aspects of the business
  • Accounting information systemsare focused accounting
  • Human resource management systemsare used for personnel aspects.
  • Office automation systems(OAS) support communication and productivity in the enterprise by automating workflow and eliminating bottlenecks. OAS may be implemented at any and all levels of management.
  • School Information Management Systems(SIMS) cover school administration, and often including teaching and learning materials.
  • Enterprise resource planningfacilitates the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.

MANAGEMENT

There are different areas of concentration with different duties and responsibilities in information system managers starting from the Chief information officer (CIOs), Chief technology officer (CTOs), IT directors and IT security managers. Chief information officers (CIOs) are responsible for the overall technology strategy of their organizations. Basically, they are more of the decision makers and action takers when it comes down to determining the technology or information goals of an organization and making sure the necessary planning to implement those goals is being met.

Chief technology officers (CTOs) are responsible for evaluating how new technology can help their organization. They usually recommend technological solutions to support the policies issued by the CIO.

IT directors including MIS directors are in charge of both their organization’s Information technology departments and the supervision of thereof. They are also in charge of implementing the policies chosen by the other top branches (CIOs, CTOs). It is their role to ensure the availability of data and network services by coordinating IT activities.

IT Security Managers oversee the network and security data as the title implies. They develop programs to offer information and awareness to their employees about security threats. This team is very important because they must keep up-to-date on IT security measures in order to be successful within their organization. Any security violations need to be investigated and supervised by this specific team.

In MIS, the information is recognized as a major resource like capital and time. If this resource has to be managed well, it calls upon the management to plan for it and control it, so that the information becomes a vital resource for the system.

  • The management information system needs good planning.
  • This system should deal with the management information not with data processing alone.
  • It should provide support for the management planning, decision-making and action.
  • It should provide support to the changing needs of business management.

Major challenges in MIS implementation are:

  • Quantity, content and context of information – how much information and exactly what should it describe.
  • Nature of analysis and presentation – comprehensibility of information.
  • Availability of information – frequency, contemporariness, on-demand or routine, periodic or occasional, one-time info or repetitive in nature and so on
  • Accuracy of information.
  • Reliability of information.
  • Security and Authentication of the system.

Information System Analysis and Design

System analysis and design follows the typical System/Software Design Life Cycle (SDLC) as discussed in the previous chapter. It generally passes through the following phases:

  • Problem Definition
  • Feasibility Study
  • Systems Analysis
  • System Design
  • Detailed System Design
  • Implementation
  • Maintenance

In the analysis phase, the following techniques are commonly used:

  • Data flow diagrams (DFD)
  • Logic Modeling
  • Data Modeling
  • Rapid Application Development (RAD)
  • Object Oriented Analysis (OOA) 

Technology  for Information Systems

The technology requirement for an information system can be categorized as:

  • Devices
  • Data center systems – It is the environment that provides processing, storage, networking, management and the distribution of data within an enterprise.
  • Enterprise software – These are software system like ERP, SCM, Human Resource Management, etc. that fulfill the needs and objectives of the organizations.
  • IT services – It refers to the implementation and management of quality IT services by IT service providers through people, process and information technology. It often includes various process improvement frameworks and methodologies like six sigma, TQM, and so on.
  • Telecom services

System Test Planning and Execution

The system should be fully tested for errors before being fully operational.

The test plan should include for each test:

  • Purpose
  • Definition
  • test inputs
  • detailed specification of test procedure
  • details of expected outputs

Each sub-system and all their components should be tested using various test procedures and data to ensure that each component is working as it is intended.

The testing must include the users of the system to identify errors as well as get the feedback.

System Operation

Before the system is in operation, the following issues should be taken care of:

  • Data security, backup and recovery;
  • Systems control;
  • Testing of the system to ensure that it works bug-free in all expected business situations;
  • The hardware and software used should be able to deliver the expected processing;
  • The system capacity and expected response time should be maintained;
  • The system should be well documented including;
    • A user guide for inexperienced users,
    • A user reference or operations manual for advanced users,
    • A system reference manual describing system structures and architecture.

Once the system is fully operational, it should be maintained throughout its working life to resolve any glitches or difficulties faced in operation and minor modifications might be made to overcome such situations.

Factors for Success and Failure

MIS development projects are high-risk, high-return projects. Following could be stated as critical factors for success and failure in MIS development:

  • It should cater to a specific, well-perceived business.
  • The top management should be completely convinced, able and willing to such a system. Ideally there should be a patron or a sponsor for the system in the top management.
  • All users including managers and other employees should be made an integral part of the development, implementation, and use of the system.
  • There should be an operational prototype of the system released as soon as possible, to create interest among the users.
  • There should be good support staff with necessary technical, business, and interpersonal skills.
  • The system should be simple, easy to understand without adding much complexity. It is a best practice, not to add up an entity unless there is both a use and user for it.
  • It should be easy to use and navigate with high response time.
  • The implementation process should follow a definite goal and time.
  • All the users including the top management should be given proper training, so that they have a good knowledge of the content and function of the system, and can use it fully for various managerial activities such as reporting, budgeting, controlling, planning, monitoring, etc.
  • It must produce useful outputs to be used by all managers.
  • The system should be well integrated into the management processes of planning, decision-making, and monitoring.

Concept of Decision-Making

Decision-making is a cognitive process that results in the selection of a course of action among several alternative scenarios.

Decision-making is a daily activity for any human being. There is no exception about that. When it comes to business organizations, decision-making is a habit and a process as well.

Effective and successful decisions result in profits, while unsuccessful ones cause losses. Therefore, corporate decision-making is the most critical process in any organization.

In a decision-making process, we choose one course of action from a few possible alternatives. In the process of decision-making, we may use many tools, techniques, and perceptions.

In addition, we may make our own private decisions or may prefer a collective decision.

Usually, decision-making is hard. Majority of corporate decisions involve some level of dissatisfaction or conflict with another party.

Let’s have a look at the decision-making process in detail.

Decision-Making Process

Following are the important steps of the decision-making process. Each step may be supported by different tools and techniques.

Sensitivity Analysis

Sensitivity analysis is a technique used for distributing the uncertainty in the output of a mathematical model or a system to different sources of uncertainty in its inputs.

From business decision perspective, the sensitivity analysis helps an analyst to identify cost drivers as well as other quantities to make an informed decision. If a particular quantity has no bearing on a decision or prediction, then the conditions relating to quantity could be eliminated, thus simplifying the decision making process.

Sensitivity analysis also helps in some other situations, like:

  • Resource optimization
  • Future data collections
  • Identifying critical assumptions
  • To optimize the tolerance of manufactured parts

Static and Dynamic Models

Static models:

  • Show the value of various attributes in a balanced system.
  • Work best in static systems.
  • Do not take into consideration the time-based variances.
  • Do not work well in real-time systems however, it may work in a dynamic system being in equilibrium
  • Involve less data.
  • Are easy to analyze.
  • Produce faster results.

Dynamic models:

  • Consider the change in data values over time.
  • Consider effect of system behavior over time.
  • Re-calculate equations as time changes.
  • Can be applied only in dynamic systems.

Simulation Techniques

Simulation is a technique that imitates the operation of a real-world process or system over time. Simulation techniques can be used to assist management decision making, where analytical methods are either not available or cannot be applied.

Some of the typical business problem areas where simulation techniques are used are:

  • Inventory control
  • Queuing problem
  • Production planning

Operations Research Techniques

Operational Research (OR) includes a wide range of problem-solving techniques involving various advanced analytical models and methods applied. It helps in efficient and improved decision-making.

It encompasses techniques such as simulation, mathematical optimization, queuing theory, stochastic-process models, econometric methods, data envelopment analysis, neural networks, expert systems, decision analysis, and the analytic hierarchy process.

OR techniques describe a system by constructing its mathematical models.

Group Decision-Making

In group decision-making, various individuals in a group take part in collaborative decision-making.

Group Decision Support System (GDSS) is a decision support system that provides support in decision making by a group of people. It facilitates the free flow and exchange of ideas and information among the group members. Decisions are made with a higher degree of consensus and agreement resulting in a dramatically higher likelihood of implementation.

Following are the available types of computer based GDSSs:

  • Decision Network:This type helps the participants to communicate with each other through a network or through a central database. Application software may use commonly shared models to provide support.
  • Decision Room:Participants are located at one place, i.e. the decision room. The purpose of this is to enhance participant’s interactions and decision-making within a fixed period of time using a facilitator.
  • Teleconferencing:Groups are composed of members or sub groups that are geographically dispersed; teleconferencing provides interactive connection between two or more decision rooms. This interaction will involve transmission of computerized and audio visual information.

Security of an Information System

Information system security refers to the way the system is defended against unauthorized access, use, disclosure, disruption, modification, perusal, inspection, recording or destruction.

There are two major aspects of information system security:

  • Security of the information technology used – securing the system from malicious cyber-attacks that tend to break into the system and to access critical private information or gain control of the internal systems.
  • Security of data – ensuring the integrity of data when critical issues, arise such as natural disasters, computer/server malfunction, physical theft etc. Generally an off-site backup of data is kept for such problems.

Guaranteeing effective information security has the following key aspects:

  • Preventing the unauthorized individuals or systems from accessing the information.
  • Maintaining and assuring the accuracy and consistency of data over its entire life-cycle.
  • Ensuring that the computing systems, the security controls used to protect it and the communication channels used to access it, functioning correctly all the time, thus making information available in all situations.
  • Ensuring that the data, transactions, communications or documents are genuine.
  • Ensuring the integrity of a transaction by validating that both parties involved are genuine, by incorporating authentication features such as “digital signatures”.
  • Ensuring that once a transaction takes place, none of the parties can deny it, either having received a transaction, or having sent a transaction. This is called ‘non-repudiation’.
  • Safeguarding data and communications stored and shared in network systems.

ADVANTAGES

The following are some of the benefits that can be attained using:

  • Companies are able to identify their strengths and weaknesses due to the presence of revenue reports, employees’ performance record etc. Identifying these aspects can help a company improve its business processes and operations.
  • Giving an overall picture of the company.
  • Acting as a communication and planning tool.
  • The availability of customer data and feedback can help the company to align its business processesaccording to the needs of its customers. The effective management of customer data can help the company to perform direct marketing and promotion activities.
  • MIS can help a company gain a competitive advantage. Competitive advantage is a firm’s ability to do something better, faster, cheaper, or uniquely, when compared with rival firms in the market.
  • MIS report help to take decision and action on certain object with quick time

ENTERPRISE APPLICATION

  • Enterprise systems—also known as enterprise resource planning(ERP) systems—provide integrated software modules and a unified database that personnel use to plan, manage, and control core business processes across multiple locations. Modules of ERP systems may include finance, accounting, marketing, human resources, production, inventory management, and distribution.
  • Supply chain management(SCM) systems enable more efficient management of the supply chain by integrating the links in a supply chain. This may include suppliers, manufacturers, wholesalers, retailers, and final customers.
  • Customer relationship management(CRM) systems help businesses manage relationships with potential and current customers and business partners across marketing, sales, and service.
  • Knowledge managementsystem (KMS) helps organizations facilitate the collection, recording, organization, retrieval, and dissemination of knowledge. This may include documents, accounting records, unrecorded procedures, practices, and skills. Knowledge management (KM) as a system covers the process of knowledge creation and acquisition from internal processes and the external world. The collected knowledge is incorporated in organizational policies and procedures, and then disseminated to the stakeholders

DEVELOPMENT

“The actions that are taken to create an information system that solves an organizational problem are called system development“. These include system analysissystem designcomputer programming/implementationtesting, conversion, production and finally maintenance.

Conversion is the process of changing or converting the old system into the new. This can be done in three basic ways:

  • Direct cut – The new system replaces the old at an appointed time.
  • Parallel implementation – both old and new systems run at the same time until developers are certain the new system is operating correctly.

Pilot study – Introducing the new system to a small portion of the operation to see how it fares. If results are good then the new system expands to the rest of the company.