Management Information System

According to Comptroller’s Handbook May, 1995 Management Information System: is defined

to be a system or process that provides information necessary to manage an organization
effectively. MIS generates information to enhance the long term strategic goals and objectives,
everyday financial accounts system …..Are generally considered essential components of
prudent and reasonable business decisions. It is there to ensure consistent approach to the
development use and review of the management information system.

Communication in organizations Edition .defined Management information system to be a

system that gathers more comprehensive data organizes and summarizes it in a form that is of
value to functional managers, and then provides those same managers with the information the
need to do their work.

Difference between data and information.

Data or raw data is the. Basic facts and figures of operational life. Such as output figure, hours
worked and so, when taken by itself have no meaning.
Information or MIS are the various procedures and methods used to convert the data into useful
information.
 Raw data Management Information System Process Useful
Information

Decisions User Processes
Diagram of the management information system in decision making.

In the diagram above

o Raw data refers to the data in its natural form, it does not make sense.
o MIS process is the translation or conversion of the raw data into understandable
information.
o Useful information this stage is the finished product. Information is ready to be used.
o User processes this is where the information analyzing of the data is done and the useful
information go unto the next stage.
o Decisions it put to the test, it is used for what it was created for.

Useful Information
Useful information can be see as any information communicated that is important to or relates to
a specific topic. Information is only deemed useful if it meets the required need.
Characteristics of useful information:
Timeliness: to simplify prompt decision making, the MIS must be able to provide and distribute
current information to appropriate users. The system should be able to quickly collect, edit data,
summarize results and be able to adjust and correct errors promptly.

Accuracy: a sound automated and manual internal control system must exist throughout all
information system processing activities.

Consistency: because data collection and reporting processes will change overtime, to be
reliable the data should be processed and complied to verify it authenticity.

Completeness: MIS plays an important role in decision making, that decision makers need
complete and pertinent information in a summarized report. Reports should be designed to
eliminate clutter and voluminous details thereby avoiding ‘information overload’.

Relevance: information provided to managers must be relevant (must deal with the matter at
hand). MIS must be appropriate to support the management level using it

The characteristics of useful information, is made useful due to 3 main characteristics:

Time. Information should be readily available.
Content. It must be error proof.
Form. Information should be easily understood.
Goals of the MIS
1. Enhances communication among employees.
2. Deliver complex material through the institution.
3. Provides an objective system for recording and aggregating information.
4. Produce expenses related to labour-intensive manual activities.
5. Support the organization’s strategic goals and directions.

Steps of a Good MIS

The steps to a good MIS must include an organizational planning process inclusive of both
tactical and strategic level.

1. Investigation should be made about the information to determine if the information is

viable and if it can be used.
2. Appropriate data should be gathered.
3. Data must be summarized before the information is used.
4. Data must be analyzed to ensure the best alternative is used.
5. Accurate information transferal to gain best results.
6. Information gathered must be used in the manner suggested to accomplish organizational
objectives.
Advantages of the MIS
1. Allows managers to manipulate ‘the model ‘built into the system.
2. It helps to enhance the company or organization recruitment ability.
3. Provides information for future budgeting.
4. Managers will also be able to check on the implementation for staffing.

Disadvantages of the MIS

1. While data was extensive, it was not necessary constructed in the way that best suit the
users.(past)b
2. Maintenance of information is too expensive.eg the super computer in organization.

Uses of the MIS

1. Problem solving.
2. Decision making.
3. Improving the quality of decision.
4. Planning.
5. Communicating information.
6. Improving the efficiency of operations.
7. Minimizing the duplication of efforts.
8. Controlling activities.
Characteristics of an effective MIS
Managers need to ensure the MIS is developed according to a sound methodology as follows:

Meeting Organizational Objectives:

The long and short term plan must be effective, the system and reports output should support
reinforcement of organizational goals, the annual operating plan and the budgetary process. A
useful business planning initiatives need a supporting long term strategic MIS.

Provide Information Flow:

All information gathered must relate to the organizational structural development corroborative
and more stable informational needs, (all information must support the facts).giving rise to
effective and easily understood tasks.

Delivery of Information:
The right quality and quantity of information must be delivered to allow managers to perform
their duties effectively and in a timely manner.
The process of establishing an effective MIS

Planning: in this process the operations and resources are assisted, to ascertain where the
resources are best useful.

Designing: the analyzing of the correct resources and equipment for the work, the direction as
to how the resources are going to be used.

Implementation: this is where the plan and the design are put into motion. This is where the
true test begins.

Improvement: this is where an organization grows after the implementation; an analysation is

done to see how effective the information system is. The analysis should show where the
systems is lacking and have not worked, so better and effective measures are put into place.

How the MIS enhances decision making.

The MIS supplies decision makers with facts; it supports and enhances the overall decision
making process. MIS enhances the job performance by providing the necessary data and
information to help management make strategic decisions.
MIS as it relates to planning:
The management information system plays a vital role in planning. The information system in
any organization is as important to a business as food is an integral to sustainability of our lives.
This is how vital the management information system is to planning. If managers have no
information as to how to run their businesses and an understanding of the purpose of the
organization. The organization is doomed to failure. The MIS provides information for planning
and sustainable management.

The importance of the MIS in an organizational structure:

Management need to about to allocate the best suited persons for the job and in the right
positions that are available in the organization. Organizational structure and MIS are the veins
of the organization, the placement party it tell who goes where. An organization with out a
structure is chaotic and will lead to the complete destruction of the organization. Worker will
spend more time getting work done and in some case you will find that more that one person
would have completed the same job twice. This will cause time laps and wasting of resources,
increasing the organization expense.
Improvements to MIS
The management information system was originally created between 1954 and 1964 to deal
with the accounting aspect of the organization. All financing information was stored and
continually updated as transaction where made during this period.
Today the MIS with all its technological advancements have increased both the availability and
volume of information. Management and the directors have the information available for both
planning and decision making. Which are the contributing factors of a successful business.

Types of formal information system

Transaction-Processing System:
A system that handles a business’s routine and recurring information transaction. E.g. recorded
changes to individual credit accounts, customer monthly spending bills, credit payments …….

Decision Support System or DSS

A system that automatically searches for, manipulates and summaries information needed by
mangers for use in making specific decisions. A manager might be interested in knowing the
likely effects of a price increase for a particular product sold by the firm. They turn to the DSS
to query and determine the potential outcome for the price increase.
Executive Information System or EIS
A system that meets the special information processing needs of top managers. Because many
top managers lack computer knowledge and because they need highly specialized information
not readily available in conventional system. The EIS was designed to be user friendly to
accommodate them.

Intranet
A communication network similar to the internet but operating within the boundaries of a single
organization. This system enables every business unit within an organization to compile
information about itself and to make it available to employees in the business.

Expert System
An information system created to duplicate and imitate the thought processes of a human expert.
It a system implemented to identify all the ‘if then ’contingencies that pertain to a given
situation.
MARKING SCHEME FOR GROUP ASSIGNMENT
MARKS MARKS AWARDED
RELEVANT CONTENT 15

GROUP COHERENCE 3

TEACHING AIDS 5

LECTURE NOTES 5

OVERALL FINAL SUBMISSION

OF REPORT 7

QUESTION AND ANSWERS

FROM CLASS 5
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