Management information systems tutorial, Thesis of Computer Science

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About the Tutorial

Management Information System (MIS) is a planned system of collecting, storing, and disseminating data in the form of information needed to carry out the functions of management. This tutorial covers the concepts related to information and provides a detailed coverage on MIS and other major enterprise-level systems. You will also learn how these systems help in the decision-making process, which is critical to any business enterprise.

Audience

This tutorial has been prepared for the beginners as well as advanced learners who want to learn the basics of Management Information System. This tutorial is very useful for the undergraduate students of computer science, engineering, business administration, management, science, commerce and arts where an introductory course on Management Information System is a part of the curriculum.

Prerequisites

Knowledge of computers is not a prerequisite to follow the contents of this tutorial. This tutorial does not require a background in computers or computer programming, though a basic knowledge of computer terminologies will help in understanding the given concepts very easily.

Copyright & Disclaimer

 Copyright 2014 by Tutorials Point (I) Pvt. Ltd. All the content and graphics published in this e-book are the property of Tutorials Point (I) Pvt. Ltd. The user of this e-book is prohibited to reuse, retain, copy, distribute or republish any contents or a part of contents of this e-book in any manner without written consent of the publisher. We strive to update the contents of our website and tutorials as timely and as precisely as possible, however, the contents may contain inaccuracies or errors. Tutorials Point (I) Pvt. Ltd. provides no guarantee regarding the accuracy, timeliness or completeness of our website or its contents including this tutorial. If you discover any errors on our website or in this tutorial, please notify us at [email protected]

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• Characteristics of MIS····························································································································
• Characteristics of Computerized MIS ·····································································································
• Nature and Scope of MIS ·······················································································································
• 7. MIS ─ ENTERPRISE RESOURCE PLANNING··········································································
  • Why ERP? ··············································································································································
  • Features of ERP ·····································································································································
  • Scope of ERP ·········································································································································
  • Advantages of ERP ································································································································
  • Disadvantage of ERP ·····························································································································
• 8. MIS ─ CUSTOMER RELATIONSHIP MANAGEMENT ·····························································
  • Why CRM? ············································································································································
  • Scope of CRM ········································································································································
  • Advantages of CRM ·······························································································································
  • Disadvantages of CRM ··························································································································
• 9. MIS ─ DECISION SUPPORT SYSTEM ····················································································
  • Programmed and Non-programmed Decisions ······················································································
  • Attributes of a DSS ································································································································
  • Characteristics of a DSS ·························································································································
  • Benefits of DSS ······································································································································
  • Components of a DSS ····························································································································
  • Classification of DSS ······························································································································
  • Types of DSS ··········································································································································
• 10. MIS ─ KNOWLEDGE MANAGEMENT SYSTEM ·····································································
  • What is Knowledge? ······························································································································
  • Sources of Knowledge of an Organization ·····························································································
  • Definition of KMS ·································································································································· iv
  • Purpose of KMS ·····································································································································
  • Activities in Knowledge Management ···································································································
  • Level of Knowledge Management ·········································································································
• 11. MIS ─ CONTENT MANAGEMENT SYSTEM ··········································································
  • Functions of Content Management ·······································································································
  • Content Management Workflow···········································································································
  • Advantages of CMS ·······························································································································
• 12. MIS ─ EXECUTIVE SUPPORT SYSTEM ··················································································
  • Examples of Intelligent Information ······································································································
  • Features of Executive Information System ····························································································
  • Advantages of ESS ·································································································································
  • Disadvantage of ESS ······························································································································
• 13. MIS ─ BUSINESS INTELLIGENCE SYSTEM ············································································
  • Characteristics of BIS ·····························································································································
  • Benefits of BIS ·······································································································································
  • Approaches of BIS ·································································································································
  • Capabilities of BIS··································································································································
• 14. MIS ─ ENTERPRISE APPLICATION INTEGRATION ································································
  • Characteristics of EAI·····························································································································
  • Need for Enterprise-wise Integration ····································································································
  • Challenges of EAI ···································································································································
  • Types of EAI ··········································································································································
• 15. MIS ─ BUSINESS CONTINUITY PLANNING···········································································
  • Objectives of BCP ··································································································································
  • Phases of BCP ········································································································································ v
  • Project Management and Initiation·······································································································
  • Business Impact Analysis ·······················································································································
  • Recovery Phase ·····································································································································
  • BCP Development Phase ·······················································································································
  • Final Phase ············································································································································
• 16. MIS ─ SUPPLY CHAIN MANAGEMENT ················································································
  • Objectives of SCM ·································································································································
  • Features of SCM ····································································································································
  • Scope of SCM ········································································································································
  • SCM Processes ······································································································································
  • Advantages of SCM ·······························································································································
• 17. MIS ─ STRATEGIC BUSINESS OBJECTIVES ···········································································
  • Operational Excellence ··························································································································
  • New Products, Services, and Business Models ······················································································
  • Customer and Supplier Intimacy ···········································································································
  • Improved Decision Making ····················································································································
  • Competitive Advantage and Survival ·····································································································
• 18. MIS ─ SYSTEM DEVELOPMENT LIFE CYCLE ·········································································
  • Planning and Requirement Analysis ······································································································
  • Defining Requirements ·························································································································
  • Designing System Architecture ··············································································································
  • Building or Developing the System ········································································································
  • Testing the System ································································································································
  • Deployment of the System ····················································································································
  • System Evaluation and Maintenance ····································································································
• 19. MIS ─ DEVELOPMENT PROCESS ························································································· vi
  • Planning for MIS ····································································································································
  • Information System Requirements ········································································································
  • Information System Analysis and Design ·······························································································
  • Technology for Information Systems ·····································································································
  • System Test Planning and Execution ·····································································································
  • System Operation ·································································································································
  • Factors for Success and Failure ··············································································································
• 20. MIS ─ MANAGERIAL DECISION-MAKING ············································································
  • Concept of Decision-Making ··················································································································
  • Decision-Making Process ·······················································································································
  • Process and Modeling in Decision-Making ····························································································
  • Dynamic Decision-Making ·····················································································································
  • Sensitivity Analysis ································································································································
  • Static and Dynamic Models ···················································································································
  • Simulation Techniques ··························································································································
  • Operations Research Techniques ··········································································································
  • Heuristic Programming ··························································································································
  • Group Decision-Making ·························································································································
• 21. MIS ─ SECURITY AND ETHICAL ISSUES ···············································································
  • Security of an Information System ········································································································
  • Information Systems and Ethics ············································································································
  • The ACM Code of Ethics and Professional Conduct················································································
  • The IEEE Code of Ethics and Professional Conduct ·················································································
• 22. MIS ─ SUMMARY ···············································································································

Information can be defined as meaningfully interpreted data. If we give you a number 1- 212 - 290 - 4700, it does not make any sense on its own. It is just a raw data. However if we say Tel: +1- 212 - 290 - 4700, it starts making sense. It becomes a telephone number. If I gather some more data and record it meaningfully like: Address: 350 Fifth Avenue, 34th floor New York, NY 10118 - 3299 USA Tel: + 1 - 212 - 290 - 4700 Fax: + 1 - 212 - 736 - 1300 It becomes a very useful information - the address of New York office of Human Rights Watch, a non-profit, non-governmental human rights organization. So, from a system analyst's point of view, information is a sequence of symbols that can be construed to a useful message. An Information System is a system that gathers data and disseminates information with the sole purpose of providing information to its users. The main object of an information system is to provide information to its users. Information systems vary according to the type of users who use the system. A Management Information System is an information system that evaluates, analyzes, and processes an organization's data to produce meaningful and useful information based on which the management can take right decisions to ensure future growth of the organization.

Information Definition

According to Wikipedia: "Information can be recorded as signs, or transmitted as signals. Information is any kind of event that affects the state of a dynamic system that can interpret the information. Conceptually, information is the message (utterance or expression) being conveyed. Therefore, in a general sense, information is "Knowledge communicated or received, concerning a particular fact or circumstance". Information cannot be predicted and resolves uncertainty."

Information Vs Data

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 systems. Data is defined as 'groups of non-random symbols in the form of text, images, voice representing quantities, action and objects'.

1. MIS ─ Basic Information Concepts

Information can be classified in a number of ways and in this chapter, you will learn two of the most important ways to classify information.

Classification by Characteristic

Based on Anthony's classification of Management, information used in business for decision-making is generally categorized into three types:  Strategic Information: Strategic information is concerned with long term policy decisions that defines the objectives of a business and checks how well these objectives are met. For example, acquiring a new plant, a new product, diversification of business etc., comes under strategic information.  Tactical Information: Tactical information is concerned with the information needed for exercising control over business resources, like budgeting, quality control, service level, inventory level, productivity level etc.  Operational Information: Operational information is concerned with plant/business level information and is used to ensure proper conduction of specific operational tasks as planned/intended. Various operator specific, machine specific and shift specific jobs for quality control checks comes under this category.

2. MIS ─ Classification of Information

Classification by Application

In terms of applications, information can be categorized as:  Planning Information: These are the information needed for establishing standard norms and specifications in an organization. This information is used in strategic, tactical, and operation planning of any activity. Examples of such information are time standards, design standards.  Control Information: This information is needed for establishing control over all business activities through feedback mechanism. This information is used for controlling attainment, nature and utilization of important processes in a system. When such information reflects a deviation from the established standards, the system should induce a decision or an action leading to control.  Knowledge Information: Knowledge is defined as "information about information". Knowledge information is acquired through experience and learning, and collected from archival data and research studies.  Organizational Information: Organizational information deals with an organization's environment, culture in the light of its objectives. Karl Weick's Organizational Information Theory emphasizes that an organization reduces its equivocality or uncertainty by collecting, managing and using these information prudently. This information is used by everybody in the organization; examples of such information are employee and payroll information.  Functional/Operational Information : This is operation specific information. For example, daily schedules in a manufacturing plant that refers to the detailed assignment of jobs to machines or machines to operators. In a service oriented business, it would be the duty roster of various personnel. This information is mostly internal to the organization.  Database Information: Database information construes large quantities of information that has multiple usage and application. Such information is stored, retrieved and managed to create databases. For example, material specification or supplier information is stored for multiple users.

Information processing beyond doubt is the dominant industry of the present century. Following factors states few common factors that reflect on the needs and objectives of the information processing:  Increasing impact of information processing for organizational decision making.  Dependency of services sector including banking, financial organization, health care, entertainment, tourism and travel, education and numerous others on information.  Changing employment scene world over, shifting base from manual agricultural to machine-based manufacturing and other industry related jobs.  Information revolution and the overall development scenario.  Growth of IT industry and its strategic importance.  Strong growth of information services fuelled by increasing competition and reduced product life cycle.  Need for sustainable development and quality life.  Improvement in communication and transportation brought in by use of information processing.  Use of information processing in reduction of energy consumption, reduction in pollution and a better ecological balance in future.  Use of information processing in land record managements, legal delivery system, educational institutions, natural resource planning, customer relation management and so on. In a nutshell:  Information is needed to survive in the modern competitive world.  Information is needed to create strong information systems and keep these systems up to date.

Implications of Information in Business

Information processing has transformed our society in numerous ways. From a business perspective, there has been a huge shift towards increasingly automated business processes and communication. Access to information and capability of information processing has helped in achieving greater efficiency in accounting and other business processes. A complete business information system accomplishes the following functionalities:  Collection and storage of data.  Transform these data into business information useful for decision making.  Provide controls to safeguard data.

4. MIS ─ Information Need and Objective

 Automate and streamline reporting. The following list summarizes the five main uses of information by businesses and other organizations:  Planning - At the planning stage, information is the most important ingredient in decision making. Information at planning stage includes that of business resources, assets, liabilities, plants and machineries, properties, suppliers, customers, competitors, market and market dynamics, fiscal policy changes of the Government, emerging technologies, etc.  Recording - Business processing these days involves recording information about each transaction or event. This information is collected, stored, and updated regularly at the operational level.  Controlling - A business need to set up an information filter, so that only filtered data is presented to the middle and top management. This ensures efficiency at the operational level and effectiveness at the tactical and strategic level.  Measuring - A business measures its performance metrics by collecting and analyzing sales data, cost of manufacturing, and profit earned.  Decision-making - MIS is primarily concerned with managerial decision-making, theory of organizational behavior, and underlying human behavior in organizational context. Decision-making information includes the socio-economic impact of competition, globalization, democratization, and the effects of all these factors on an organizational structure. In short, this multi-dimensional information evolves from the following logical foundations:  Operations research and management science  Theory of organizational behavior  Computer science: o Data and file structure o Data theory design and implementation o Computer networking o Expert systems and artificial intelligence  Information theory Following factors arising as an outcome of information processing help speed up of business events and achieve greater efficiency:  Directly and immediate linkage to the system  Faster communication of an order  Electronic transfer of funds for faster payment  Electronically solicited pricing (helps in determining the best price)

Enterprise applications are specifically designed for the sole purpose of promoting the needs and objectives of the organizations. Enterprise applications provide business-oriented tools supporting electronic commerce, enterprise communication and collaboration, and web-enabled business processes both within a networked enterprise and with its customers and business partners.

Services Provided by Enterprise Applications

Some of the services provided by an enterprise application includes:  Online shopping, billing and payment processing  Interactive product catalogue  Content management  Customer relationship management  Manufacturing and other business processes integration  IT services management  Enterprise resource management  Human resource management  Business intelligence management  Business collaboration and security  Form automation Basically these applications intend to model the business processes, i.e., how the entire organization works. These tools work by displaying, manipulating and storing large amounts of data and automating the business processes with these data.

Most Commonly Used Enterprise Applications

Multitude of applications comes under the definition of Enterprise Applications. In this section, let us briefly cover the following applications:  Management information system (MIS)  Enterprise Resource Planning (ERP)  Customer Relationship Management (CRM)  Decision Support System (DSS)  Knowledge Management Systems (KMS  Content Management System (CMS)  Executive Support System (ESS)

5. MIS ─ Major Enterprise Applications

 Business Intelligence System (BIS)  Enterprise Application Integration (EAI)  Business Continuity Planning (BCP)  Supply Chain Management (SCM)

 Processing Data: The captured data is processed into information needed for planning, organizing, coordinating, directing and controlling functionalities at strategic, tactical and operational level. Processing data means: o making calculations with the data o sorting data o classifying data and o summarizing data  Information Storage: Information or processed data need to be stored for future use.  Information Retrieval: The system should be able to retrieve this information from the storage as and when required by various users.  Information Propagation: Information or the finished product of the MIS should be circulated to its users periodically using the organizational network.

Characteristics of MIS

Following are the characteristics of an MIS:  It should be based on a long-term planning.  It should provide a holistic view of the dynamics and the structure of the organization.  It should work as a complete and comprehensive system covering all interconnecting sub-systems within the organization.  It should be planned in a top-down way, as the decision makers or the management should actively take part and provide clear direction at the development stage of the MIS.  It should be based on need of strategic, operational and tactical information of managers of an organization.  It should also take care of exceptional situations by reporting such situations.  It should be able to make forecasts and estimates, and generate advanced information, thus providing a competitive advantage. Decision makers can take actions on the basis of such predictions.  It should create linkage between all sub-systems within the organization, so that the decision makers can take the right decision based on an integrated view.  It should allow easy flow of information through various sub-systems, thus avoiding redundancy and duplicity of data. It should simplify the operations with as much practicability as possible.  Although the MIS is an integrated, complete system, it should be made in such a flexible way that it could be easily split into smaller sub-systems as and when required.  A central database is the backbone of a well-built MIS.

Characteristics of Computerized MIS

Following are the characteristics of a well-designed computerized MIS:  It should be able to process data accurately and with high speed, using various techniques like operations research, simulation, heuristics, etc.  It should be able to collect, organize, manipulate, and update large amount of raw data of both related and unrelated nature, coming from various internal and external sources at different periods of time.  It should provide real time information on ongoing events without any delay.  It should support various output formats and follow latest rules and regulations in practice.  It should provide organized and relevant information for all levels of management: strategic, operational, and tactical.  It should aim at extreme flexibility in data storage and retrieval.

Nature and Scope of MIS

The following diagram shows the nature and scope of MIS: