Management Information System (MIS)
Management Information System is a systematic process of providing relevant information in the right time in the right format to al level of users in the organization for effective decision making. MIS also defined to be a system of collection, processing, retrieving and transmission of data to meet the information requirement of different level of managers in an organization.
According to CIMA-
“MIS is a set of procedures designed to provide managers at a different level in the organization with information for decision making, and control of those parts of the business for which they are responsible.”
MIS comprises of three elements: Management, Information and System. The concept of MIS is better understood if each element of the term MIS is defined separately.
Management: A manager may be required to perform the following activities in an organization:
i. Determination of organizational objectives and developing plans to achieve them.
ii. Securing and organizing human being and physical resources so as to achieve the laid down
iii. Exercising adequate control over the function performed at the lower level.
iv. Monitoring the result to ensure that accomplishment are proceeding according to plans.
Thus, management comprises of the processes or activities that describe what managers do while working in their organization. They in fact plan, organize, initiate, and control operations. In other words, management refers to a set of functions and processes designed to initiate and coordinate group effort in an organized setting directed towards the promotion of certain interests, preserving values and pursuing certain goals. It involves mobilisation, combination, allocation and utilisation of physical, human and other needed resources in a judicious manner by employing appropriate skills, approaches and techniques.
Information: information is data that have been organized into a meaningful and useful context. It has been defined by Davis and Olson – “Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in the current or progressive decision”. For example, data regarding the sale by various salesman can be merged to provide information regarding total sale through sales personnel. This information is of vital performance to making manager who is trying to plan for future sale.
Information is the substance on which business decision is based. Therefore, the quality of information determines the quality of action or decision. The management plays the part of converting the information into action through the familiar process of decision-making. The information has come to occupy a very important position in the survival of a business.
System: System may be defined as a composite entity consisting of a number of elements which are interdependent and interacting, operating together for the accomplishment of an objective. One can find many examples of a system. The human body is a system, consisting of various part such as head, heart, hands, legs, and so on. The various body parts are related by means of connecting networks of blood vessels and nerves. This system has the main goal which we may call “living”. Thus, a system can
described by specifying its parts, the way in which they are related, and the goals which they are expected to achieve. A business is also a system economic resources such as people, money, material, machines, etc. are transformed by various organization processes (such as production, marketing, finance, etc.) into goods and services.
Thus MIS can be defined as a network of information that supports management decision making. The role of MIS is to recognise information as a resource and then use it for effective and timely achievement of organizational objectives.
The potential impact of computers and MIS on a different level of management
The potential impact of computers on top-level management may be quite significant. An important factor which may be accountable for the change is the fast development in the area of computer science. It is believed that in the future the computer would be able to provide simulation models to assist top-level management in planning their work activities. For example, with the help of a computer, it may be possible in future to develop a financial model by using simulation technique, which will facilitate executive to test the impact of ideas and strategies formulated on future profitability and in determining the needs for funds and physical resources. By carrying sensitive analysis with the support of computers, it may be possible to steady and measure the effect of variation of individual factor to determine the final result. Also, the availability of a new class of experts will facilitate effective communication with computers. Such experts may also play a useful role in the development and processing of models. In brief, the potential impact of computer would be more in the area of planning and decision making.
Futurists believe that top management will realise the significance of technique like simulation, sensitivity analysis and management science. The application of these techniques to business problems with the help of computers would generate accurate, reliable, timely and comprehensive information to top management. Such information will be quiet useful for the purpose of management planning and decision making, Computerised MIS will also influence the development, evaluation, and implementation of a solution to a problem under the decision-making process.
The potential impact of computers and MIS on middle management level will also be significant. It will bring a marked change in the process of their decision making. At this level, most of the decision will be programmed and thus will be made by the computer, thereby drastically reducing the requirement of middle-level managers. For Example, in the case of the inventory control system; Computer will carry records of all items in respect of their purchase, issue and balance. The reorder level, reorder quantity etc. for each item of material will also be stored in the computer after its predetermination. Under such a system, as soon as the consumption level of a particular item of material will touch the reorder level, the computer will inform for its purchase immediately. The futurists also foresee the computer and the erosion of middle management as the vehicle for a major shift to re-centralisation. The new information technology will enable management to view an operation as a single entity whose effectiveness can only be optimised by making the decision that takes into account the entity and not the individual parts.
The impact of Computer and MIS today at supervisory management level is maximum. At this level, managers are responsible for routine, day-to-day wok decision and activities of the organization which do not require much judgement and discretion. In a way, supervisory manager’s job is directed more towards control functions, which are highly respective to computerisation. For control, such managers are provided with accurate, timely, comprehensive and suitable reports. A higher percentage of information requirements of executives is met out at this level.
The potential impact of Computer and MIS on the supervisory level will completely revolutionise the working at this level. Most of the controls in future will be operated with the help of computers. Even the need of supervisory managers for controlling the operation will be substantially reduced. Most of the operations/activities now performed manually will be either fully or partially automated.