Management Information System (MIS) – Objectives, Characteristics and Application

• MIS are designed for providing information to important personnel in the organization.
• Use already processed transaction data and generate information reports after processing data. Example are personnel information system, marketing information system, sales information system.
• The output of Management Information System (MIS) takes form of summary report and exception reports. A bank manger gets summary report listing the total amount of deposits and withdraw made.
• Its main purpose is to draw attention of the middle management to any significant difference between actual and performance and excepted performance.

Objectives of MIS

• Management Information System have become the main tool used by the managers in decision making. Managers perceive information as the driving source to achieve success in any business.
• MIS is useful for very efficient and effective planning and controlling functions of the management.
• Reports give an idea about the performance of men, materials, machinery, money and management.
• MIS is helpful in controlling cost by giving information about idle time, labor turnover, wastages and losses and surplus capacity.
• By making the comparison of actual performance with the standard and budgeted performance, variance are brought to the notice of the management by MIS.
• MIS brings to notice of the management strength of the organization, to take advantage of opportunities available.
• MIS reports on production statistics regarding rejection, defective and spoilage and their effect on costs and quality of the products.

Characteristics of Management Information System (MIS)

• Management- oriented: must address management needs, mission and goals of the business organization.
• Integrated: development of information must be integrated so that all the operational and functional information sub system should be worked together as a single entity.
• Common data flow: The integrated approach towards data management will result in avoiding the duplication of data, data redundancy, and will help to simplify operations.
• Strategic planning oriented: It ensures Management Information System being built serve the organization for next five to ten years.
• System approach: System approach implies holistic approach to study the system and its performance to achieve the objective for which it was formed.
• Need based: MIS design and development must be as per the information needs of managers at different levels.
• Understandable: The summarized information must be understood by the receiver so that he will interpret it correctly.
• Relevant: information should be pertinent and meaningful to the decision makers and should be in his area of responsibility.
• Complete: Should contain all the facts necessary for the decision makers.
• Available: Must be accessible in the desired form, when it is needed.
• Reliable: Information should be accurate, consistent with facts and verifiable.
• Concise: Information should be to the point and just enough, no more, no less.
• Timely: Information must be delivered at the right time and the right place to the right person.
• Cost- effective: The cost of gathering and processing information must be weighted against the benefits derived from using such information.
• Accuracy: Accuracy of information determines the usefulness of information.

Application of Management Information System (MIS)

• Planning: To plan need specific information which is available from the specific MIS.
• Recording: It helps to produces regular reports for every level of management in a company and recorded accordingly.
• Controlling: with the help of information it is easy to move between securely in each and every operation in a control manner.
• Measuring: Business measures the performance metrics by collecting and analyzing given data, cost of manufacturing and profit earned.
• Decision making: Managerial decision making needs information.
• Analyzing: from the numerous data we can process and analyze to obtain different operational information for specific use.
• Policy making: Different information is needed to form the policy of the organization.
• Strategy forming: MIS supports the formation of organizational strategic planning of an organization to be competitive, effective and efficient among different organization.
• Managing: Management Information System helps top level management to manage the organization successfully.

Benefits of Management Information System (MIS)

• MIS facilitates planning.
• MIS minimize information overload.
• MIS encourages decentralization.
• MIS bring coordination.
• MIS makes control easier.
• MIS is a process.
• MIS increases Productivity.
• MIS enhances the quality of Decision making.
• MIS improves communication and helps to develop team work.
• MIS can facilitates organizational transformation.

Limitation of Management Information System (MIS)

• Improper Design does not serve the management and hence is irrelevance.
• MIS cannot replace managerial judgement in decision making. It is just a tool.
• The quality of output of MIS is directly proportional to the quality of input and processes.
• It is required to analyze the information before decision making.
• In fast changing and complex environment MIS may not have enough flexibility to update itself quickly.
• MIS only takes only quantities factor in account.
• MIS is less useful in non programmed decisions.
• MIS is less effective in organization where information is not being shared with others.
• Less effective due to frequent changes in top management, organizational structure and operational staff.
• MIS implementation can be very expensive for organizations looking to mange their operation more effectively
• Highly sensitive requires constant monitoring
• Lots of time required to construct or prepare MIS.

Approach of Management Information System (MIS) development

A systematic strategy is required during the creation of a Management Information System (MIS) to guarantee that it successfully satisfies organizational needs. Here is a detailed description of the methodology for MIS development.

Top Down Approach

• Define the objective of organization, the kind of business it is in, the activities or function for which information is required.
• The crucial strategic and tactical decisions are also defined and the decisions necessary to operate the activities are specified.
• This approach develops a model of information flow in the organization, which acts as a guide for designing the information system.
• By using the model of information flow, various information sub-systems may be defined.
• Top management takes the initiative in formulating major objectives, policies and plans in a comprehensive manner and communicates them down the line to middle and supervisory management levels for translating them into performance results.
• Managers other than those at top levels have little role in planning, they have to only concentrate on implementation and day to day control.

Bottom Up Approach

• The development of information system under this approach starts from the identification of life stream systems.
• Life stream systems are those systems, which are essential for the day to day business activities. The examples of life stream systems include payroll, sales order, inventory control and purchasing etc.
• The next step is towards the integration of data kept in different data files of each information system.
• The next step under bottom up approach may be the addition of decision model and various planning models for supporting the planning activities involved in management control.

Integrative Approach

• It is for overcoming the limitations of the above two approaches.
• Top level management identifies the structure and design the MIS suitable to the concern.
• This design id further presented to lower level management for their views and modifications.
• The revised design is drawn and evaluated by the top level and sent down again in a modified form for further considerations if required.
• This evaluation, modifications, and approval process continues until a final design is achieved, that is suitable for all levels.

Implementation of Management Information System (MIS)

Implementation of a system is as much important as the creation of it. Implementation can easily destroy the good work done in the earlier phases and bring the system to a standstill. 
 Implementation is also a process that has a series of sequential steps which culminates in making operational the new system.
In order to help them perform this task of implementation smoothly, a series of predefined steps are followed. These implementation tasks are as follows:

Implementation Plan

• It is the series of action-oriented steps planned for making the implementation smooth. It normally involves the following steps:
• Creating a master schedule of the implementation activities
• Setting timelines for critical and non-critical activities
• Identifying major bottlenecks and their solutions
• Communication of the plan.

Organizing the Management Information System (MIS) Department

• The MIS department will be the custodian of the new system.
• Organization of the department is therefore necessary before the new system becomes operational.
• The roles of each member of the MIS department have to be clearly laid out before the new system becomes operational.
• Effort is made to ensure that the role of the MIS staff is understood by each member of the organization.
• Training is provided to those who need training on the new system so that they in turn can help others. 

Selection and Procurement of Hardware

• This step of the implementation process is an important step as it involves huge investments.
• Proper care is taken to ensure that the organization gets the best deal from such selection and procurement of the hardware. 
• -a list of reliable vendors is prepared.
• the implementation team must prepare the request for proposal document based on their understanding of the hardware requirement of the new system.
• after the RFP is prepared it is sent by some mode of communication to the enlisted set of vendors. 
• based on the evaluation a single vendor or a select set of vendors are chosen for delivery of hardware.

Procurement of Software

• The new system being implemented will have been created based on assumptions of operating environment of the organization.
• Procurement of system software is done on similar lines as the procurement of hardware.
• The implementation team need not prepare the specification for the system software. They only need to procure the system software that the new system is designed to run on.

Creating the Database

• In modern systems, data stores are databases. These databases are relational database management systems, which is a separate application software package.
• The database has to be created and structures inside the database have to be created in order to enable it to store data.
• The implementation team creates the database, its structures and rules so that the application system being implemented can be plugged into the database and start working.

Training of Users

• The new system may get installed but without proper training of users, it may not be of good use.
• A training program is planned and the required training given to users. This is an important part of the implementation process and helps in reducing the resistance to change related behavior among the user community.
• The training also helps users to appreciate the new features of the new system and helps build trust and appreciation for the new system.

Creating Physical Infrastructure

• The new system being implemented may require a physical infrastructure.
• The implementation team must ensure that the system performance must not suffer due to infrastructure bottlenecks.
• The implementers will have to use their persuasive skills and convince the management of the organization to create the required physical infrastructure so that it does not affect the performance of the new system.

Transition to the New System

• The transition if done wrongly leads to a lot of pain. Hence, it is necessary to move slowly on the transition front.
• Normally, after the new system is installed and ready, the new system and the old system are both used for a period to ensure that the company performance does not suffer due to transition problems.
• Slowly when the users gain more capability to handle the new system the old system is phased out.

System development Life Cycle (SDLC)

• System: An organized collection of independent task and process that is designed to work together in order to accomplish specific objectives.
• SDLC refers to methodology for developing the system. It is a life span of a Information system from its initiation until it is removed or redesigned.
• It provides a consistent framework of task and deliverables needed to develop systems.
• SDLC has different phases:

Requirement Specifications

• An information system requirement specification (SRS) is a description of a system to be developed, lying a functional and non- functional requirements.
• Information system requirement specification establishes the basis for agreement between the customer and contractors or suppliers on what the information product is to do as well as what it is not expected to do.
• To derive the requirements we need to have thorough understanding of the products to be developed or being developed.
• Detailed and continuous planning between project team and customer is required.

Analysis

• System analysis is the process of collecting factual data, understanding the processes involved, identifying the problems and recommending feasible suggestions for improving the system functioning.
• It is more of a thinking process and involves the creative skill of the system analyst.
• It attempts to give birth to a new efficient system that satisfies the current need of the user and has scope for further growth within organizational constraints.
• The result is a logical system design.

Feasibility Study

• Analysis of proposed system from different aspects so that it clears how practical and beneficial the system will be for the organization.
• It deals with economical aspect, technical aspect, operational aspect, behavioral aspect, schedule aspect, legal aspect about the system.
• It determines the future prospective about the new system.
• Feasibility study is the study of whether the system is feasible or not to design.
• The type of feasibility study are:
• Legal feasibility
  Operational feasibility, Economic feasibility, Technical feasibility, Schedule Feasibility

Design

• Based on the user requirements and the detailed analysis of a new system, the new system must be designed.
• The logical system design arrived at as a result of system analysis and is converted into physical system design.
• A detailed description of what is needed to solve original problem, Input , Output, databases, forms, files and processing specifications are drawn in detail.
• Programming language, Hardware, software platform in which new system run are decided.
• Tools and techniques like Algorithm, flowchart, Data flow diagram, data dictionary, Decision table, decision tree are used in system design.

Development

• The system design must be implemented to make it workable system.
• It is a programming phase in which the programmer converts the program specifications to computer instructions.
• Programming tools like compilers, interpreters and language like C++, VB, PHP and java etc. are used for coding with respect to the type of application with the right choice of programming language.

Documentation

• It is written in local understandable language explaining in details about the system.
• This ensures the continuity of a system.
• Generally following two types of documentations are prepared for any system.
• User or Operator documentation
• System documentation

Implementation

• Implementation involves testing the installed system, converting from the old system to the new system to the one and training the users.
• This phase consists of implementation of the system into a production environment, and the resolution of the problem identified in testing phase.
• The major steps involved in this phase are:
• Installation of hardware and software
• Conversion
• User training
• Documentation

Maintenance and Review

• When the system is implemented, maintenance and modification begins.
• If a system is inconsistent with the design specifications, them changes have to be made.
• The software and hardware also requires periodic maintenance so as to keep In tune with design specification and to innovate new ideas into system.

Success and Failure of MIS

The performance of an organization is greatly impacted by the success or failure of a Management Information System (MIS). An examination of the elements that affect MIS success and failure is provided below:

Factors Contributing to the Success of MIS

Clearly defined goals and alignment

Success Factor: The MIS must meet certain business demands and be in line with the organization’s objectives.
As an illustration, a retail business uses a MIS to effectively monitor sales patterns and store inventory, which directly supports revenue targets.

Participation of Users

Success Factor: Involving end users in the design and implementation stages guarantees that the system satisfies their needs.
Example: To ensure usability, users contribute to interface designs.

Strong Management and Leadership Assistance

Success Factor: The MIS project’s proper finance, resources, and prioritization are guaranteed by dedicated leadership.
Example: Top management keeps the project on track by conducting regular progress reviews.

Superior Quality Information

Success Factor: Decision-making is enhanced by fast, accurate, and consistent data.
For instance, well-structured and clean sales data improves the accuracy of demand forecasting.

Factors Contributing to the Failure of MIS

Uncertain Goals

Failure Factor: When objectives are unclear or poorly stated, the system fails to satisfy business requirements.
For instance, underutilization results from implementing a MIS without first defining key processes.

Opposition to Change

Failure Factor: Workers may be reluctant to embrace new technologies out of ignorance or fear of losing their jobs.
Example: Low user acceptance is caused by inadequate training.

Insufficient User Engagement

Failure Factor: A mismatch between system features and user needs may result from excluding users from the development process.
For instance, a system with a complicated user interface deters users from using it.

Low-quality data

Failure Factor: Making poor decisions can result from using inaccurate or insufficient data.
For instance, duplicate entries in sales data distort patterns.

Frequently Asked Questions (FAQ)

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