MODULE 31 MANAGEMENT INFORMATION SYSTEMS

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1 MODULE 31 MANAGEMENT INFORMATION SYSTEMS Content Writer/Author: id: Mrs. RENU ARORA Structure of Module/Syllabus of module(define Topic of Module and its subtopics) Management Information Management Information Systems (MIS), Need, Objectives Systems (MIS) and functions of MIS, MIS development process, MIS Types, costs, advantages and disadvantages, MIS in LIC 1. DESCRIPTION OF THE MODULE Subject Name Paper Name Module Name/Title Module Id Pre-requisites Objectives Keywords Description of the Module Library and Information Science Library and Information Centres Management Management Information Systems (MIS) LIS/LICM/31 Levels of Management, Functions of LIC Managers, Information requirements of Managers, To learn the need, purpose and role of MIS in a library and information organisation Management Information Systems, MIS, Libraries and Information Organisations MIS, Levels of Management- MIS, 2. OBJECTIVES After reading this module, you will be able to: Describe the need, purpose and role of MIS in an information organisation; Understand characteristics of MIS; Get an insight into the MIS process; Explain the types of MIS and the problems solved by MIS; Develop MIS reports; Explain the advantages and disadvantages of MIS; and Enumerate the skill of an MIS manager. 3. INTRODUCTION The management process in every organisation requires a lot of data and information for execution of various activities and plans. As modern information organisations have become more technology oriented, the information managers are required to be up-to-date not only about various operations of the information organisation but also in other related areas and technologies. The information managers become more efficient if they are not only well informed but have more knowledge, experience and analytical skills to be able to face 1

2 various decision-making situations. With this in view, the library and information managers too have recognised the requirement of management information systems (MIS) in information organisations. Information managers, with the help of MIS, can have access to timely, accurate and latest information about various activities related to library operations. With help of MIS, best solutions to problems in information organisations are available and this leads to efficiency in performance. Presently, a good MIS support is essential and modern management systems rely on MIS as MIS aids in decision-making process. Due to the use of MIS in an organization, all the levels of management are able to get timely, prompt, accurate, reliable and economical information. Before taking any decision, every manager can check the latest information available on computer with the help of MIS. In this module, we will discuss the role of MIS in modern information organisations. The need for MIS for all levels of management is highlighted. The MIS process necessitates solving all kinds of problems in carrying out management activities smoothly. Also discussed are cost related to MIS, advantages and disadvantages of MIS in information organisations. 4. MANAGEMENT INFORMATION SYSTEMS (MIS) Managers in very organization, including information organisations, require information for planning, policy making and decision-taking. Managers of all the levels need information for varied purposes. The levels of management are depicted in the figure below: The three levels of management, namely, the top, middle and the lower level of management require information all the time for performing the activities. The MIS must thus produce information for managers on three levels: 1. Strategic long term decisions that will affect the future of the organisation 2

3 2. Tactical decisions that have a short to medium term effect 3. Operational day-to-day decisions In view of the levels of management, the functions of a manager are: 1. Planning the direction an organisation takes e.g. diversifying, where to operate. 2. Organising - resources such as people, space, equipment and services. 3. Coordinating - the activities of various departments. 4. Decision-making - about the organisation, products or services, the employees, use of information technologies. 5. Controlling - monitoring and supervising the activities of others. The role of a management information system (MIS) is to provide a manager with sufficient information to make informed decisions to help him to carry out the above functions. 4.1 Definition An MIS can be defined as any system that provides all levels of management with relevant information they need for taking appropriate decisions for the total control of an organisation. It is considered to be one of the best monitoring techniques in the management of any organisation where key members are provided with manual and automated data/information used in its various operations. Other definitions of MIS as given by various management experts are: a) The MIS is defined as a system which provides information support for decision making in the organization. b) The MIS is defined as an integrated system of man and machine for providing information to support the operations, the management and the decision making function in the organisation. c) The MIS is defined as a system based on the database of the organization evolved for the purpose of providing information to the people in the organization. The best definition of an MIS thus is: The role of a management information system is to convert data from internal and external sources into information that can be used to aid in making effective decisions for planning, directing and controlling. 3

4 The definition thus implies that an MIS in an information organisation: Can be applied to all the three levels of management, Is capable of being linked to any organisational subsystem, Functions to measure performance Monitors progress Evaluates alternatives or provide knowledge for change, and Is flexible both internally and externally 4.2 Meaning MIS is a planned system of collecting, storing and disseminating data in the form of information needed to carry out the functions of management. The term is popularly used to refer to the group of information management activities linked with computerised/automated activities or support for human decision making, e.g. Decision Support Systems, Expert Systems, and Executive Information Systems. MIS or Management Information Systems involves three aspects, namely, Management, Information and Systems. Here, Management: It is art of getting things done through and with the people in formally organized groups. The basic functions performed by a manager in an organization are: planning, controlling, staffing, organizing, and directing. Management thus takes decisions regarding planning, operating and controlling. Information: Information is considered as valuable component of an organization. Information is data that is processed and is presented in a form which assists decision makers and consists of orderly data used for making decisions, and 4

5 Systems: A system is defined as a set of elements which are joined together to achieve a common objective. The elements are interrelated and interdependent. Thus every system is said to be composed of subsystems. A system has one or more subsystems. In other words, a system is for integration of all activities of an organisation through exchange of information 5 NEED FOR MIS Management Information Systems improve the effectiveness of decision making, by providing decision makers with information related to the decision for which they are responsible. Thus, appropriate information is made available for appropriate persons at different levels for making decisions of different kinds. Some of the other reasons why we require MIS is the technological developments and information overload. 5.1 Role of MIS in an Information Organisation An 'MIS' is a planned system of the collection, processing, storage and dissemination of data in the form of information needed to carry out the management functions. In a way, it is a documented report of the activities that were planned and executed. MIS systems can be used to transform data into information useful for decision making. Computers can provide financial statements and performance reports to assist in the planning, monitoring and implementation of strategy. MIS systems provide a valuable function that can deliver reports from unmanageable volumes of data that would otherwise be useless to decision makers Sources of Information for MIS Internal information - generated by the organization. Examples are inventory levels, cash flow, customers, orders, personnel, sales. Entered into system by keyboard operators or through the use of scanners. External information - information about market trends, the economy, competitors, mailing lists of potential customers available from news sources, company publications, industry magazines, and increasingly through the world wide web. Not stored permanently in an organisation s MIS Features of an MIS Be flexible - allowing for different ways of analysing data and evaluating information. Be able to support a range of skills and knowledge. Provide interpersonal communication with other people in the organisation. Not require extensive periods of concentration as managers switch between different tasks. Make it easy to interrupt the work and return to it at a later time Protect a manager from information overload 5

6 5.1.3 Functions of MIS An effective MIS has the following functions: The main function of MIS is to help the managers and the executives in the organization in decision making. Large quantities of data like users information, competitor s information, and personnel records, sales data, accounting data, etc. is collected from internal sources like the organisation s records and external sources like annual reports and publications. The collected data is organized in the form of a database. The data from the database is processed and analysed by using different tools and techniques. The result of the analysis is properly presented to the information managers at various levels to help them in decision making. In order to get a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points: Handling of a voluminous data. Confirmation of the validity of data and transaction. Complex processing of data and multidimensional analysis. Quick search and retrieval. Mass storage. Communication of the information system to the user on time. Fulfilling the changing needs of the information. The management information system uses computers and communication technology to deal with these points of supreme importance. 6. OBJECTIVES OF MIS Management Information Systems (MIS) is the study of people, technology, and organizations. An effective MIS has the following objectives: To capture data from various internal and external sources of information organisation. Data capturing may be manual or with help of computers. The captured data is processed to convert the same into required format as required by the information manager. Processing of data is carried out by analysing, sorting, classifying, summarising, sorting, tabulating, etc. 6

7 MIS stores the processed or unprocessed data for future use. If any information is not immediately required, it can be saved in the MIS database for future use. MIS retrieves information from its database as and when required by various levels of management personnel of the information organisation. Information, report or data, which is a finished product of MIS is disseminated to the users of the information organisation. It may be provided periodically or online through INTRANET or as and when requested by the information manager. Facilitate the decision - making process by furnishing information in the proper time frame. This helps the decision - maker to select the best course of action. Provide requisite information at each level of management to carry out their functions. Help in highlighting the critical factors to the closely monitored for successful functioning of the organization. Support decision-making in both structured and unstructured problem environments. Provide a system of people, computers, procedures, interactive query facilities, documents for collecting, sorting, retrieving and transmitting information to the users. 7. CHARACTERISTICS OF MIS Information managers in modern information organisations have a variety of activities to manage. For this, an effective MIS should have the following characteristics: The design of MIS is management oriented as it takes care of the needs of the managers in the information organization. The MIS is usually designed from the top to work downwards. It does not mean that the system is designed to provide information directly to the top management. Other levels of management are also provided with relevant information. Information organizations have various departments like collection development, reference, online access to information, marketing and sales, publications, maintenance, etc. Each of these departments function individually and also in relationship with other departments. Information is available in abundance. MIS aids in integrating the information generated by various departments of the organization. MIS has to be a system that is management directed. Because of management orientation of MIS, it is necessary that management should actively direct the system development efforts. In order to ensure the effectiveness of designed system, management should continuously make reviews. MIS should be involved in identifying a proper mechanism of storage of data. The data is maintained in such a way that the unnecessary duplication of data is avoided. MIS has to help in establishing mechanism to eliminate redundancies in data. 7

8 MIS as a system can be broken down into sub systems. Each such sub system may be programmed. This results in easy access of data, accuracy of data and information. It helps in maintaining the consistency of data. An MIS takes a long time to be established. It usually takes 2 to 4 years to establish it successfully in an organization. Hence, long-term planning is required for MIS development in order to fulfil the future needs and objectives of the organization. The designer of an information system should therefore ensure that it will not become obsolete before it actually gets into operation. MIS should not merely provide past historical information, rather it should provide information on the basis of future projections on the actions to be initiated. Each MIS has to be integrated. For this, it has to consider various sub-systems, their objectives, information needs, and recognize their interdependence, that these subsystem have amongst themselves, so that common areas of information are identified and processed without repetition and overlapping. It must have flexibility and ease of use so that it readily accessible to the wide range of users within the organisation with easy usability. 8. MIS DEVELOPMENT PROCESS MIS process involves steps consisting of information gathered from various sources, processing Inputs to an MIS are internal data sources and external data sources. The internal data sources include the in-house databases; data warehouses and specific functional areas throughout information organisation. The external data sources are the other related information organisations, users community of the information organisation, competitors, and the Internet. It has to be reiterated here that although a computer is not a prerequisite to MIS, the modern MIS are completely based on computer technologies. Factors Responsible for the development of MIS There are many factors responsible for the development of MIS and have been of concern to both management researchers and practitioners. While deciding about the criteria for MIS development and the associated technologies, both internal and external factors must be taken into account. The following are the factors responsible for development of MIS: a) External b) Internal a) External Factors : External Factors are conditions that exist in organization s external environment. The factors can be found at the organisation s parent body level or in national policies. i. Parent body level : At the parent body level, characteristics like the degree of application of certain technologies, the availability of external know-how, the kind of services available, the requirements imposed by major users of 8

9 information organisation and overall levels of competition and technology sophistication in other information organisations. ii. National Policies : For the external factors the national policies also affect the organisation that indirectly affects the subsystems of the organization. b) Internal Factors : Internal factors internal of the information organisation that may affect the development of MIS can be grouped into three categories: i. Past Experience with Technology : The organization s past experience about the technology in terms of exposure and organizational learning ultimately affects its future in developing technologies required for the MIS process. ii. Organizational Characteristics : An organization s characteristic like size, influence the influence the adoption of MIS application in organization. The adoption of certain technologies may appear more appropriate for the larger organisations. Smaller organisations are less affected by organizational inertia and show a greater degree of involvement by managers especially top management during implementation. iii. Organizational Pursued strategy : Internal factors deal with the organization s pursued strategy on both orientation and technology policy. An organization s strategy reflects its action with trends and technology. Besides the above, some other factors are: Information Manager Satisfaction- Development of MIS is affected by manager satisfaction. Managers using the MIS facility should be satisfied by the presented system. Effective- Development should be effective in terms of organizational benefit and user satisfaction. Efficient- Development should efficiently use all the resources that the organization values. The MIS implementation process involves a number of sequential steps: 1. Establish information needs of management. For example, for general management of information organisation or financial management or human resources management. Within these decision areas there will be factors relevant to the management decision areas, e.g., general management will be concerned about its relationship with the governing board or parent body, information organisation-user relationships and information to be provided to the staff. This will then lead the design team to ask what information units will be needed to monitor the identified factors of concern. Information managers requiring information for decision making will then be identified. 9

10 2. Formulate broad systems objectives so as to delineate important decision areas in view of the above identified information needs of managers at various levels. 3. Develop a general description of a possible MIS as a coarse design. This design will have to be further refined by more precise specifications. For efficient management of information processing, the MIS should be based on a few databases related to different sub-systems (divisions) of the organization. 4. Once the required information units are determined and a systems design is developed, decide how information will be collected. Various MIS personnel are then allocated responsibility for generating and packaging the information. A detailed design is thus prepared that is to be refined and expanded. This involves detailed description of desired management reports and flow of information. A database or list of all data to be maintained in files must be prepared. Here, a procedures manual must be prepared to show how the particular MIS works and what the responsibilities of involved MIS personnel. At this stage, the computer centre supporting the MIS has to be designed and software to provide MIS has to be made available. 5. Develop a network diagram showing information flow. 6. The new MIS is now ready for operation. Test the system until it meets the operational requirements, considering the specifications stipulated for performance and the specified organizational constraints. 7. Recheck that all the critical details and data pertaining to various divisions of the information organisation and for the organization as a whole are fully selected, collected and processed. Ensure that information is generated in a timely manner. 8. Monitor and maintain actual implementation of the MIS and its functioning from time to time. 9. KINDS OF PROBLEMS SOLVED BY MIS Structured problems - clearly defined problems, procedures are known for solving them, and information needed for solution is easy to identify. Can usually be solved using information and tools available in an information system. Kinds of problems solved by information workers and supervisors. Semi-structured problems- are less routine than structured problems. The procedure for solving such a problem may involve some subjective judgment. Some of the information needed may not be available. Unstructured problems - require human intuition as the basis for decision making. Relevant information may be missing and Information systems provide lesser degrees of help as we move from structured to unstructured problems. Information systems provide lesser degrees of help as we move from structured to unstructured problems. 10

11 10. TYPES OF MIS There are 6 major types of Management Information Systems in an organization: 1. Executive Support Systems 2. Management Support Systems 3. Decision Support Systems 4. Knowledge Work Systems 5. Office Automation Systems, and 6. Transaction Processing Systems. These 6 types of MIS serve the different levels of functionality of an organization Decision Support Systems (DSS) A Decision Support System (DSS) is an umbrella term used to describe any computer application that enhances the user s ability to make decisions. More specifically, the term is usually used to describe a computer-based Management Information system designed to help decision-makers use data, knowledge and communications technology to identify problems and make decisions to solve those problems 11. COSTS RELATED TO MIS MIS is a computer-based system for collecting, storing, processing, and providing access to information used by library managers for effective decision making in an information organization. MIS evolved from early electronic data processing systems and support managerial decision making by providing regular structured reports on organizational operations. The MIS needs to be a cost-effective and efficient system for gathering information. As most of the MIS are developed internally, their creating costs have to be borne by the parent institution and as the users are employees of the organization, these cannot be passed to users. Developing an MIS costs lot of money. The costs of MIS, however, are usually greater than they are visible. This is due to the fact that most of the MIS costs are not otherwise visible. The major costs associated with MIS are: One-time costs, and Recurring costs One-time costs are for installation of hardware, software, communication infrastructure and miscellaneous costs. Whereas, the recurring costs are towards annual maintenance charges, charges payable to service provider, cost of manpower, outsourcing of services, etc. The costs of MIS are thus in the following four areas: a) Hardware 11

12 For developing an MIS, it is often seen that the existing hardware of the organisation are often inadequate. Thus latest, high capacity, high speed and compatible hardware has to be acquired for installation of MIS. b) Software For operating each aspect of MIS, programmes are required and thus an efficient software needs to be developed for operating the MIS hardware. Installing software required lots of testing and is time consuming, therefore plenty of costs are associated with this. c) Personnel A variety of personnel with varied skills are required to manage a computerized MIS. These are information professionals, management personnel, computer specialists and system analysts, technical writers and data entry operators. These personnel are required to interact and coordinate with each other all the time. Thus heavy costs are associated for efficient operation of MIS due to involvement variety of personnel. d) Maintenance As timely and up-to-date information is required by users all the time, the MIS has to operate efficiently and without any bug and errors all the time. For this, maintenance of hardware, software and system is required all the time and this involves heavy costs. Adopting MIS is usually is very costly. Large information organisations usually accumulate huge amounts of data stored in various division/departments before idea of mining those data for decision support was a possibility. These older systems include critical historic data about finances, information product sales, inventory, user of information organisations, and other players in the field. The problem is that these systems are not compatible, often using different approaches to store data. When the organization needs information, the raw data in these disparate, incompatible systems needs to be extracted and migrated to a database designed to organize the raw data and make them available for analysis. Building these databases is both expensive and time-consuming. The other cost considerations show that in the long-run, the costs of not adopting MIS can far exceed the costs of adopting and implementing a system. Therefore, by using MIS to share information across functional areas, redundant efforts can be eliminated. If there is a database that contains information about all the activities and products developed by the organisation that employees can use, this kind of duplication of effort and the resulting confusion can be avoided. The same principle applies to any two divisions/departments of information organisation with overlapping functions. MIS can increase also increase cash flow for the organisation because by putting together relevant information, MIS can help identify ways to improve information products and expand the use base of these products. Usually the organization requires the help of a consultant to develop the system, therefore all the organizational procedures and controls have to be carefully and elaborately spelled out to the consultants. As a strong and positive commitment from all involved is required, active participation and accountability of users and contributors of information at all levels is ensured. Under such conditions, the benefits of the MIS by far outweigh the cost of acquiring and organising the information, including the manpower required and the maintenance cost of the system. 12

13 12. MIS REPORT PRESENTATION Each level of management requires outputs in various forms as per their requirement. MIS reports are presented in the following forms: Reports detailed, summary, progress Interpretations/narrations for decision making Documents that are Quantitative or subjective Briefing documents Consolidated information Statistics, statements, trends, graphs, etc. 13. ADVANTAGES OF MIS To be successful, MIS should have all the following features: a) As the MIS is integrated into the managerial functions, it sets clear objectives to ensure focus is on the major issues of the information organisation. Also adequate development resources are provided and the human and organizational barriers to progress are removed. b) The selected information processing technology is required to meet the data processing that analyses needs of the users (management personnel of the information organisation) of the MIS. c) As every bit of information required for decision making is available, the gaps in information are removed, incomplete information gets completed and incorrect information gets corrected. d) The MIS is oriented, defined and designed in terms of the users requirements and its operational viability is ensured. e) The MIS is kept under continuous surveillance, so that its open system design is modified according to the changing information needs. This results in accurate decision making by removing risks. f) MIS focuses on the results and goals, and highlights the factors and reasons for nonachievement. This is ensured as two way information flow, i.e., downwards and upwards get established. g) MIS is not allowed to end up into an information generation mill avoiding the noise in the information and the communication system. h) 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. 13

14 i) 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. j) The MIS is easy to operate and, therefore, the design of the MIS has such features which make up a user-friendly design: High level of use Updating of information is a continuous process, monitoring is easy and immediate corrective measures can be taken. High level of user satisfaction as decision making becomes more accurate, less risky and rather easy. Accomplishment of original objectives Appropriate nature of use Institutionalization of the system Trend analysis and forecasting becomes possible 14. DISADVANTAGES OF MIS Many a times MIS is a failure. The common factors which are responsible for this are listed as follows: a) The MIS is conceived for data processing and not for information processing. It does not provide information which is needed by the information managers for routine activities but it tends to provide the information generally for the functions that involves decision making. The MIS thus becomes an impersonal system. b) Underestimating the complexity in the information systems and not recognizing it in the MIS design leads to problems in the successful implementation. c) 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. d) The MIS is developed without streamlining the transaction processing systems in the organization. e) A major problem arises due to 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. f) 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. 14

15 g) A belief that the computerized MIS can solve all the management problems of planning and control of the information organisation is chief drawback of MIS. h) Lack of administrative discipline in following the standardized systems and procedures, wrong planned approach and deviating from the system specifications result in incomplete and incorrect information. i) 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 assumption not known to the designer. The MIS cannot take these into account while providing perfect information. j) Inadequate analysis - problems, needs and constraints aren t understood in the early stages. k) Lack of management involved in the design wrong expectations of a new system / no-one understands the system. l) Too much emphasis on the computer system Need procedures for handling input and output / select the right hardware and software. m) Concentration on low-level data processing Information must be easily accessible and understood. n) Lack of management knowledge of ICT systems and capabilities managers know what they want from the system but don t understand the technology. o) Lack of teamwork An ICT manager must co-ordinate the accounts, marketing, sales etc. departments and help everyone understand the benefits of the system. p) Lack of professional standards All systems need clear documentation that all users can understand (not just the ICT literate). q) MIS are usually very expensive. 15. SKILLS OF MIS MANAGER The output of MIS is for the benefit of management personnel. In order to prepare the desired output, the MIS manager should have certain skills, which are: Knowledge of the total organisation and its objectives Suitable educational qualifications including technology and analytical skills Communication skills and ability to communicate effectively both orally and in writing Computer handling skills Interpersonal and Managerial Skills including relationship with top management and subordinates 15

16 Knowledge of information processing and data communication techniques Ability to design and judge the design of the system 16. MIS IN LIBRARIES AND INFORMATION ORGANISATIONS Like any other organization, MIS is possible in libraries and information organisations too, but only with dedicated staff and proper computer infrastructure. MIS enables management support, flexibility in carrying out activities, a feedback mechanism and ensures continuous improvement in information organisations. Besides this, cooperation between various levels of management is possible which leads to improved decision making as staff involvement takes place at each step. It helps to improve planning procedure and setting up of service standards. In present times of financial restraint, difficult decisions are to be taken by information managers to meet demands for new services. MIS points to need for better management information on which to base decisions. MIS has also been found to be valuable monitoring technique in libraries. It also helps to develop user focus, leadership traits in managers, continuous improvement and an excellent approach to effective decision making. Lastly, the library automation and trends in communication technologies has also necessitated the need for MIS in library and information organisations. 17. SUMMARY The MIS s function is to provide library managers and staff with data, information, analysis and tools that enhance the effectiveness and efficiency of library services and assist in the decision-making process. It is to be considered only as a supporting tool for management and does not replace managerial judgment. Its main objective is to improve the effectiveness of decisions. The MIS is an environment and a process, not just a piece of software. The objectives of an MIS are to assist staff with the daily decision making process, to maintain better accountability and control of resources, to monitor budget allocations, to improve overall library effectiveness by focusing on outcomes to generate internal and external reports to improve long-term planning and to facilitate performance measures activities. Financial constraints, declining budget, information glut, constant change in IT, web services, customer s expectations for 24 x 7 services, time shortage are compelling MIS to be mandatory. Libraries have now metamorphosed into digital and virtual institutions. More and more libraries must unit, which of course requires a change in the attitude, practices and policies to get the maximum benefit from consortia. The sole purpose of the MIS thus is to produce such information which will reduce uncertainly in a given situations. 16