MANAGEMENT INFORMATION SYSTEM

Implementing MIS in an organisation :::

MIS is a distinct methodology in conceiving, creating, planning and implementing of all managerial functions. An effective MIS helps to supply accurate relevant and timely information to the management of the organisation and that of a poor MIS provide inaccurate irrelevant and obsolete information, which becomes too expensive or fatal to an organisation. MIS comprises three basic elements such as Management, Information and System. Management is the technique of getting things done through people through an effective planning, organizing, staffing, directing and controlling process.

MIS is a system, which provides information support for decision-making in the organisation. It is an integrated system of men and machines for providing the information to support the operations, management and decision making functions in the organisation. It can also be said as a system based on the database to the organisation evolved for the purpose of providing information to the people in the organisation. Therefore MIS can be explained as computer based information system.

The main ingredients of MIS are that the concept and value of information such as planning, implementation and controlling, the management functions associated with the information, further the MIS incorporates the dynamism associated with its operations as well as implementation in an integrated frame work of system approach.

Systems are an integrated set of components or entities that interact to achieve a particular function or goal. It has got the characteristics such as boundaries, outputs, inputs, and methods of converting inputs into outputs and system interfaces.

The technological advancement has created a challenge to the Management. Traditional Management used to think how to manage resources such as Money, Materials, Men and Machines. Now it must also manage a resource known as information. Manager in the organization is the translator or transducer of information into decision-making body.

As businesses are gradually moving their orientation from production perspective to customer perspective, they are expected to dynamically adjust their production methodology to suit market and trend demands. This requires a highly reliable management system to support overall business processes. Business can no longer compromise with inefficiency and inaccuracy caused by either human or system factors.

It is found in today’s life, business means competition rather cut-throat competition. Competition becomes the essence to survive or it is the elixir to the life of business. Every business will contend to produce not only a better and more reliable product but also providing a better customer service. In the mean time, they are enforced to minimize their production costs as well as their overhead costs. These can only be achieved through developing a better information system, a highly reliable infrastructure and a more efficient management system.

The process of Management is segmented into two main divisions such as: Planning & Control - means deciding what to do and assuring that desired results are obtained. Therefore MIS aids in the functions of Strategic planning, Management control and also Operational control.

Here Strategic planning – is the process of deciding on objective of the organization such as changed objectives and policies that govern acquisition, use and disposition of resources. While Management control – is the assurance of the manager that these resources are obtained and utilized efficiently in the accomplishment of organization objective. Operational control - is method of assuring that defined tasks are carried out very benevolently and effectively.

The various functions of management planning and control are production, marketing, finance and personal.

The decision making process can be broken down into three stages as:

1) Intelligence: In this particular stage decision maker recognizes that there may be problem or opportunity that compels him to make a decision.

2) Design: This stage helps to determine alternative action that could resolve the problem or create advantage of opportunity.

3) Choice: This phase is concerned with the process by which one of the alternative created in stage – 2 to be singled out to be perused.

There are many factors influencing successful use of MIS in an Organizations

1. Involvement of top management in computerization efforts explaining the role of computer in achieving the goals of the organization. Unless the top management spends time to involve into the efforts the total functions will be bifurcated and delivered to various hands and there can be conflict of ideas which causes the failure of entire system.

2. Selection of manager who has practical skills in choosing areas of application, identification of information needs and designing reports. The information should reach at the right place and at the right time. Unless the practical skills are utilized at the right time it will be waste of energies and capital.

3. An acceptable level of spending on hardware and software. Investment on hardware and software should be in accordance with the equilibrium where both sides should go together. The excess investment on one side will be loss of capital, as the expected outcome will not be achieved.

4. Computer personnel with inter-disciplinary skills in management and operation research are required to be engaged.

There are number of strategies for the Plan achievement

The designer has to take a number of strategic decisions for the achievement of the MIS goals and objectives, such as;

a. Development strategy: An online, a batch, and a real time.

b. System development strategy: An approach to the system development- Operational versus Functional; Accounting versus Analysis; Database versus Conventional approach; Distributed versus Decentralized processing; One Database versus Multiple databases.

c. Resource for system development: In-house versus external, customized development versus the use of packages.

d. Manpower composition: Analyst, programmer skills and know-how.

The selection of the architecture, the approach to the information system development and the choice of hardware and software are the strategic decision in the design and development of the MIS in the organization. Unless these basic aspects are considered very seriously, such organisation may have to suffer from over-investment, under utilization and are not able to meet the critical information requirements.

During the implementation of MIS it is important to note the following points:

1. The organization’s strategic plan should be the basis for the MIS strategic plan.

2. The information system development schedule should match with the implementation schedule of the business plan.

3. The choice of information technology is a strategic business decision and not a financial decision.

There are numerous classes of Information

Ascertaining the information needs of the Management for the business execution is a complex task. The complexity can be handled if the information is classified on the basis of its application and the user, which becomes the basis for the ascertainment.

a. Organizational: - This information includes the number of employees, products, services, locations, the type of business, turn over and variety of the details of each one of these entities.

b. Functional: - Another class of information is functional which includes Purchases, sales, production, stocks, receivables, payables, outstanding, budgets, statutory information.

c. Knowledge:- Knowledge is yet another class of information. It consists of the trend in sales, production technology, the deviations from the budgets, targets, norms etc. competitor’s information, industry and business information plan performance and target; and its analysis.

d. Decision: - Status information on a particular aspect, such as utilization, profitability standard, requirement versus a availability. Information for problem solving and modeling. Quantitative information on the business status. Non-moving inventory, overdue payments and receivables. This is mainly used by the middle management.

e. Operational: -Yet another class of information is Operational. Information on the production, sales, purchase, dispatches, consumption, etc. in the form of planned versus actual. This information is required for monitoring of execution schedules. This class is mainly used by the supervisor section

The design of the MIS should consider the class of information as a whole and provide suitable information system architecture to generate the information for various users in the Organization.

Determining the Information Requirement:-

The sole purpose of the MIS is to produce such information, which will reduce uncertainty in a given situation. Understanding the main problem and finding the root cause of each problem etc are very relevant. Therefore the moment what is unknown becomes known, the decision maker’s problems become simple. Methods have to be evolved to handle the degree of uncertainty; the Management is expected to deal with.

The difficulty to determine a correct and complete set of information is on account of the factors are due to the capability constraint of the human being as an information processor, a problem solver and a decision maker, The nature and the variety of information, the reluctance of decision makers to spell out the information for the political and the behavioral reasons and due to the ability of the decision makers to specify the information.

The uncertainty has to be handled by using some methods. The low level of uncertainty in the Operations management are by asking questions but the precise probabilistic knowledge in the middle management can be by determining from the existing systems and methods of decision making and problem solving. The uncertainties which is not able to determine in probabilistic terms precisely or Very risky are handled middle and top management. The method is to determine through the critical success factors, decisions parameters and decision methodology. The high or the total uncertainty matters are handled by Top management by determining through modeling and sensitivity analysis, experimentation etc.

The four methods of determining the information requirements are (a) by asking or interviewing (b) by determining from the existing system (c). by analyzing the critical success factors and (d) by experimentation and modeling.

The choice of the system or the sub-system for Implementation of MIS depends on its position in the total MIS plan, the size of the system, the user’s understanding of the system and the complexity and its interface with other systems. The designer first develops systems independently and starts integrating them with other systems, enlarging the system scope and meeting the varying information needs. Determining the position of the system in the MIS though easy the real problem is the degree of structure and formalization in the system and procedures, which determine the timing and duration of development of the system. Higher the degree of structuredness and formalization, greater is the stabilization of the rules, the procedures, decision-making and the understanding of the overall business activity. Here, it is observed that the user’s and the designer’s interaction is smooth, and each other’s needs are clearly understood and respected mutually. The development becomes a methodical approach with certainty in inputs-process and outputs.

The MIS is generally used by medium and larger scale organizations. The small organizations are yet to understand its application though there is dire need to build up computer culture by properly disseminating information about computer applications and its benefits.

The various methods of Implementation of MIS are as follows:-

a) Direct approach

Direct installation of the new system with immediate discontinuance of the old existing system is referred as ‘cold turnkey’ approach. This approach becomes useful when these factors are considered.

1. The new system does not replace the existing system. The implementation should be slow and study and should not be a substitute for the earlier one. Any such attempt will be creating serious problems in the organizations.

2. Old system is regarded absolutely of no value. When a direct approach is used the system which was followed upto date will become no more useful to the organisation.

3. New system is compact and simple. Since the new system is clear, and simple the use of the same will become more convenient.

4. The design of the new system is inexpensive with more advantages and less risk involved. Compare to the earlier versions the new system will be more cheaper and economic.

b) Parallel approach: Another approach for implementing the MIS in an organisation is the parallel approach.

The selected new system is installed and operated with current system. This method is expensive because of duplicating facilities and personnel to maintain both the systems. In this approach a target date must be fixed when the operations of old system cease and new one will operate on its own otherwise both the systems will be overlapping due to which there is likely hood of total collapse of the entire system.

c) Modular approach

This is generally recognized as ‘Pilot approach’, means the implementation of a system in the Organization on a piece – meal basis. The method in fact the way of introducing the MIS step by step so as to regularize the entire existing system in a slow way.

This approach has got its own advantages compare to other methods.

1. The risk of systems failure is localized. Since the introduction of system is on installment basis or on step-by-step basis the risk of systems failure is low.

2. The major problem can be easily identified and corrected before further implementation. Any problem traced during an interval after the implementation of the first stage, can be corrected or rectified before going to the implementation of the next stage.

3. Operating personnel can be trained before system is installed in a location. The introduction is on step-by-step model the required personnel for operating the system can be trained before the new system is installed.

d) Phase – in – implementation

This approach is similar to modular method but is differs because of segmentation of system, however, not the Organization. It has advantages that the rate of change in a given Organization can be totally minimized and the date processing resource can be acquired gradually over a period of time. System exhibits certain disadvantages such as limited applicability, more costs incurred to develop interface with old system and a feeling in the Organization that system is never completed.

The procedures to Implement MIS are as follows:-

(a) Planning the implementation

After designing the MIS it is essential that the Organization should plan carefully for implementation. The planning stage should invariably include the following:

1. Identification of tasks for implementation: Planning the implementation activities, acquisition of facilities, procedure development, generating files and forms, testing the system and evaluating and maintenance of the system.

2. Relationship establishment among the activity: Network diagram must be prepared to correlate concurrent and sequential activities.

3. Establishing of MIS: For monitoring the progress of implementation and for proper control of activities, efficient information system should be developed.

(b) Acquisition of facilities:-

For installation of new system or to replace current system the Manager should prepare a proposal for approval from the Management by considering space requirement, movement of personnel and location for utility outlets and controls.

(c) Procedure development:-

This is an important step for implementation of the system including various activities such as evaluation, selection of hardware, purchase or development of software, testing and implementation strategies. The valuation of the information system is very much required to know and verify the required output in the system. The selection of hardware is also much important for the simple reason that any failure of selected hardware will be causing the complete failure of the entire system. Like that yet another important aspect is the purchase or development of software. The software purchased should be tested to verify the required standard before using the same in the organisation or the software should be developed in such a fashion that it satisfies the requirement of the organisation.

(d) Generation files and formats

The MIS manager should generate files and formats for storing actual data. Each information and data should be stored in a separate file so that the same can be utilized or used by simply calling the particular data only without going through the entire file. The file should be created in such a format. This requires checklist data, format data, storage forms and other remarks in database.

(e) Testing of the system

Test should be performed in accordance with the specifications at the implementation stage consisting of component test, sub-system test and total system test. Once all the tests are finalized and a final data for storing is ready the same should be stored in required format by giving a specific name or by giving separate pass word so as keep the secrecy of data.

(f) Evaluation and maintenance of system

The performance should be evaluated in order to find out cost effectiveness and efficacy of the system with minimum errors due to designs, environmental changes or services. The periodical evaluation of system is required to safeguard the system from causing any corruption to the data.

Software maintenance

The proper maintenance is the enigma of the system development and it holds software industry captive, tying up programming resources. There are some problems in maintenance such as regarding it as non-rewarding, non-availability of technicians and tools, non-cognizance of users about maintenance, problem and cost, lack of standard procedures and guidelines. Most programmers feel maintenance as low-level drudgery. If proper attention is paid over a period of time eventually less maintenance is required.

The maintenance of software are of various types, such as corrective /adaptive/perfective. Among these by corrective maintenance means repairing process or performance failures while by Adaptive maintenance means changing the Programme function, whereas perfective maintenance deals with enhancing the performance or modifying the program.

The activities of a maintenance procedure are the documentation. Maintenance staff receives requests from the authorized users and response should be provided immediately. Programming library should be maintained to deliver the accurate service.

Another important aspect is reduction in maintenance costs. Several Organizations having MIS generally go in for reducing maintenance costs and it consists of three major phases, such as audit through questionnaires and interviews, Software system audit and Software modification.

Evaluation methods

Like the maintenance, the evaluation of the MIS in an Organization is integral part of the control process. There are several evaluation approaches such as quality assurance review, compliances of audits, budget performance review, computer personnel productivity assessment, computer performance evaluation, service level monitoring, user audit survey, post installation review and cost benefit analysis.

The Effectiveness and Efficiency are the two main classes of Evaluation performance measurement. The relationship between effectiveness and efficiency is that the effectiveness is a measure of goodness of out put while the efficiency is a measure of the resources required to achieve the out put.

The Information Resource Management is a concept, an idea and a perspective rather than an entity which attempts to focus attention on the information that is produced by a system rather than the system itself or on the hardware and software components of the system. IRM emphasizes managerial abilities but not technical hence it is an interaction of managers and technicians.

The change over of traditional organization into MIS brings out change in attitudes towards information system. These changes bring distinct perspective.

1. Information is taken as resource but not a by-product of transaction processing.

2. It becomes resource of entire organization but not of a unit.

3. Information from traditional data processing activities change to collection of information from many resources.

The IRM activity comprises of all the information resources of an organization, which include business data processing, date management information centers, end user computing and networking. The major function of IRM is to integrate and co-ordinate all the above activities in the organization.

The implementation of the system is a management process. It brings about organizational change; it affects people and changes their work style. The process evokes a behaviour response, which could be either favourable or unfavourable depending upon the strategy of the system implementation.

In the process of implementation, the system designer acts as a change agent or a catalyst. For successful implementation the designer has to handle the human factors carefully. The guidelines for the systems designer for successful implementation of the system are

1. No question should limit the information need of the user.

2. The designer should not forget that his role is to offer a service and not to demand terms.

3. It should also remembered that the system design is for the use of the user and it is not the designer’s prerogative to dictate the design features. Hence the designer should respect the demands of the user.

4. The designer should remember not to mix up technical needs with the information needs. He should try to develop suitable design with appropriate technology to meet the information needs. The designer should not recommend modifications of the needs, unless technically infeasible.

5. Impress upon the user the global nature of the system design, which is required to meet the current and prospective information needs.

6. Not to challenge the application of the information in decision-making. It is the sole right of the user to use the information the way he thinks proper.

7. Impress upon the user that the quality of information depends on the quality of input, which he provides.

8. Impress upon the user that he is one of the users in the organization and that the information is a corporate resource and he is expected to contribute to the development of the MIS.

9. Ensure that the user makes commitment to all the requirements of the system design specifications. Ensure that he appreciates that his commitments contribute largely to the quality of the information and successful implementation of the system.

10. Ensure that the overall system effort has the management’s acceptance.

11. Enlist the user’s participation from time to time, so that he is emotionally involved in the process of development.

12. Realize that through serving the user, he is his best guide on the complex path of development.

13. Not expect perfect understanding and knowledge for the user as he may be the user of a non-computerized system. Hence, the designer should be prepared to change the system specifications or even the design during the course of development.

14. Impress upon the user that the change, which is easily possible in manual system, is not that easy in the computer system as it calls for changes in the programs.

15. Impress upon the user that perfect information is non-existent, his role therefore still has an importance in the organization.

16. Take care that the problems in the organization are resolved first before the system is taken for development.

17. Conduct a periodical user meetings on systems where you get the opportunity to know the ongoing difficulties of the users.

18. Train the user in computer appreciation and systems analysis as his perception of the computerized information system will fall short of the designer’s expectation.

Implementation of the MIS in an organization is a process where organizational transformation takes place. This change can occur in a number of ways.

As suggested by Lewin there are three steps,

(1) Unfreezing the organization to make the people more receptive and interested in the change.

(2) The second step is choosing a course of action where the process begins and reaches the desired level, and

(3) The third step is re-freezing, where the change is consolidated and equilibrium is reinforced. Many a times, this process is implemented through an external change agent, such as a consultant, playing the role of a catalyst. The significant problem in these tasks is the resistance to change. The resistance can occur due to three reasons viz., the factors internal to the users of information, the factors inherent in the design of the system and the factors arising out of the interaction between the system and its users. The problem of resistance can be handled through education, persuasion, and participation. This itself can be achieved by improving the human factors, and providing incentives to the users, and eliminating the organizational problems before implementing the system.

Management of quality in the MIS is another task while implementing the MIS in an organisation.

Information is a corporate resource, as important as the capital, know-how etc. and is being used for decision-making. Its quality, therefore, is required to be very high. A low quality information would adversely affect the organizational performance as it affects decision making. The quality of information is the result of the quality of the input data, processing design, system design, system and procedures, which generates such as data, and the management of the data processing function. Quality, unlike any other product, is not an absolute concept. Its level is determined with reference to the context and its use, and the user. Perfect quality just as perfect information in non-achievable and has cost-benefit implication.

The quality of information can be measured on certain parameters though all the parameters need not have a very high value in terms of the unit of measure. Some parameters may have lesser importance in the total value on account of their relevance in the information and its use. The quality of the important parameters is ensured by conducting a proper systems analysis, designing a suitable computer system and ensuring its maintenance from time to time and also subjecting it to audit checks to ensure the system integrity.

If the necessary steps are taken in right way the quality of the parameters can be assured.

1. All the input is processed and controlled.

2. All updating and corrections are completed before the data processing begins.

3. Inputs (transactions, documents, fields and records) are subjected to validity checks.

4. The access of the data files is protected and secured through an authorization scheme.

5. Intermediate processing checks are introduced to ensure that the complete data is processed right through i.e., run to run controls.

6. Due attentions are given to the proper file selection in terms of data, periods and so on.

7. Back up of the data and files are taken to safeguard corruption or loss of data.

8. The system audit is conducted form time to time to ensure that the computer system specifications are not violated.

9. The system modifications are approved by following a set procedure, which begins with authorization of change to its implementation followed by an audit.

10. Systems are developed with a standard specification of design and development.

11. Computer system processing is controlled through programme control, process control and access control.

Quality parameters

Parameter of quality Purpose

Complete date of all the transactions This achieves integrity of data with respect to the time period.

Valid transaction and input data Ensures the validity of the data and in turn, assures a valid information.

Assures that the results Accuracy and precision Are accurate and precisely correct based on rule, act or law using complete data.

Relevance to the user If the relevance is appropriate, the quality requires is high.

Timely information If the information is received late it becomes useless from a point of view of decision-making.

Meaningful and complete information Incomplete information forces the user to infer or interpret erroneously leading to a wrong decision.

The assurance of quality is a continuing function and needs to be evolved over a period and requires to be monitored properly. It cannot be assessed in physical units of measures since the user of the information is the best judge of the quality. Utility of information and its relevance are the two other measures of quality.

Proper organization is basic to the management of any activity or function and the same thing is applicable to MIS. The principles of the organization and structuring the organization to the specific needs of the function are a prime necessity. When we talk with reference to the MIS a number of issues come up and they are not the same in all the organizations. Hence, the organization structure of the MIS would differ from one organization to the other. The type, the size and the structure of corporate organization become the basis for the MIS organization for handling the MIS function and management alternatives.

There are number of issues involved in MIS

1. Whether the function should be handled as a centralized or decentralized activity.

2. The allocation of the hardware and software resources.

3. The maintenance of the service level at an appropriate level.

4. Fitting the organization of the MIS in the corporate organization, its culture and the management philosophy.

The factors that help the success of MIS

The success and failure of use of MIS depends on the way the same is used. Many organizations use MIS successfully but many others can’t do it. Though the hardware and the software is the latest and has appropriate technology, its use is more for the collection and storage of data and its elementary processing. There are some factors, which make the MIS a success

If a MIS is to be a success then it should have all the features listed as follows:

• The MIS is integrated into the managerial functions. It sets clear objectives to ensure that the MIS focuses on the major issues of the business. Also adequate development resources are provided and the human and organizational barriers to progress are removed.

• An appropriate information processing technology required to meet the data processing and analysis needs of the users of the MIS is selected.

• The MIS is oriented, defined and designed in terms of the user’s requirements and its operational viability is ensured.

• The MIS is kept under continuous surveillance, so that its open system design is modified according to the changing information needs.

• MIS focuses on the results and goals, and highlights the factors and reasons for non-achievement.

• MIS is not allowed to end up into an information generation mill avoiding the noise in the information and the communication system.

• The MIS Recognizes that a Manager is a human being and therefore, the systems must consider all the human behavioral factors in the process of the Management.

• The MIS recognizes that the different information needs for different objectives must be met with. The globalization of information in isolation from the different objectives leads to too much information and its non-use.

• The MIS is easy to operate and therefore the design of the MIS has such features, which make up a user-friendly design.

• MIS recognizes that the information needs become obsolete and new needs emerge. The MIS design, therefore, has a basic potential capability to quickly meet new needs of information.

• The MIS concentrates on developing the information support to Manager critical success factors. It concentrates on the mission critical applications serving the needs of the top management.

Like the factors, which help the success of MIS, many other factors are there which causes the failure of the MIS system.

• The MIS conceived as a data processing and not as an information processing system.

• The MIS does not provide the information which is needed by the managers but it tends to provide the information generally the function calls for. The MIS then becomes an impersonal system.

• Understanding the complexity in the business systems and not recognizing it in the MIS design leads to problems in the successful implementation.

• Adequate attention is not given to the quality control aspects of the inputs, the process and the outputs leading to insufficient checks and controls in the MIS.

• The MIS is developed without streamlining the transaction processing systems in the Organization.

• Lack of training and appreciation that the users of the information and the generators of the data are different, and they have to play an important responsible role in the MIS.

• The MIS does not meet certain critical and key factors of its users such as a response to the query on the database, an inability to get the processing done in a particular manner, lack of user-friendly system and the dependence on the system personnel.

• A belief that the computerized MIS can solve all the management problems of planning and control of the business.

• Lack of administrative discipline in following the standardized systems and procedures, wrong coding and deviations from the system specification result in incomplete and incorrect information.

• The MIS does not give perfect information to all the users in the Organization. Any attempt towards such a goal will be unsuccessful because every user has a human ingenuity, bias, certain assumptions not known to the designer. The MIS cannot make up these by providing perfect information.

These are the ways the Management Information System can be implemented in an organisation.