BUSINESS INFORMATION SYSTEM

(Module I)

Management Information System: Data, Information &

Knowledge

Information Technology & Communication technology

- Role of Information & Communication technology in
Business

Management Information System , Meaning ,

Concepts, Purpose & Features of MIS, Basic structural
concepts
Data
Data are raw facts or observation typically about a physical
phenomenon. Any raw facts used for processing is called data.

Information
The processed data are called information. Information will have
logical connection and it is meaningful.

Difference between data and information

Data Information
Raw facts and figures Processed data
unprocessed
Data is sometimes unrelated Information will have some
to one another. logical connection.
It may or may not be It is always meaningful
meaningful
It cannot directly used for Always used in decision
decision making. making process.
Unorganized structure. Organized structure.
No value. Have value.

Characteristics of information
1. Accuracy
2. Completeness
3. Timeliness
4. Relevance
5. Reliability
Types of information
1. Strategic information
This information used by the top level management. It is used
for long term purpose. This information is useful to the broad
objectives and policies of organizations.
2. Tactical information
This information is used by middle level management for effective
utilization of resources of the firm.
3. Operational information
This information is used by lower level management. This type
of information used for short term purpose.

Knowledge
Knowledge plays a vital role in day to day operation of running an
organisation. Knowledge can referred to as acquiring and
remembering a set of facts or the use of information to solve
problems.
Features of knowledge:
1. Knowledge is infinite.
2. Dynamic
3. Continuous and ever expanding.
4. Becomes obsolete.
5. Provisional, subject to criticism.
6. Contradiction, change or modification.
Types of knowledge
1. Explicit knowledge
It is the most basic form of knowledge that can be easily passed
on to others. When data is processed, organized, structured and
interpreted, the result is explicit knowledge.
2. Tactic knowledge
Tactic knowledge is personal knowledge that may or may
not be expressed by an individual.

Information and Communication Technology (ICT)

ICT is defined as the combination of informatics
technology with other related technologies, specifically
communication technology.
Information Technology
It is the study or use of systems for storing, retrieving and
sending information.
Types of communication devices
 Telephone
 Telegraph
 Telex
 E-mail
 Television
 Audio conferencing
 Video conferencing
 Document imaging
 Mobile phones
 Voice mail
Applications of ICT
1. ICT in business
2. ICT in financial services
3. ICT in entertainment
4. ICT in public service
5. ITC in education
Role of ICT in business / Significance of IT in business
 Global reach
 Productivity
 Commercial advantage
 Monitoring
 E-commerce
 Teleconference
 Communication
 Inventory management
 Image scanning
 Customer relationship management
Information System Ethics
It is a branch of ethics that focuses on the relationship
between creation, organisation, dissemination and use of
information, and the ethical standards and moral codes
governing human conduct in society.
Ethical issues in IT
 Misuse of personal information
 Misinformation
 Lack of oversight and acceptance of responsibilities
 Autonomous technology
Management Information System (MIS)
According to Gerome Kanter, “A system that aids
management in making, carrying out and controlling
decisions.”
Characteristics/ features of MIS
1. Management oriented
2. Management directed
3. Integrated concept
4. Common data base
5. Avoid redundancy in database
6. Heavy planning
7. Subsystem concept
8. Common data flow
9. Flexibility and ease of use
Basic concepts of MIS
 User-machine system
 Integrated system
 Need for database
 Utilization of models
Basic components of MIS
1. Data gathering
2. Data entry
3. Data transformation
4. Information utilization
Elements of MIS
 Management
 Information
 System
Purpose/Objectives of MIS
1. To manage effectively
2. To reduce cost
3. To produce reports
4. To provide statistics
5. To provide information for decision making
6. To improve efficiency and productivity
7. To improve decision
8. Protection of crucial information
Functions of MIS
 Data capture and collection
 Storage
 Information processing
 Distribution and dissemination of information

MIS and other academic discipline

1. MIS and management accounting
2. MIS and management science
3. MIS and management theory
4. MIS and information technology

Advantages of MIS
 It facilitate planning
 It minimize information overload
 It encourage decentralization
 It brings coordination
 It makes control easier
 It helps in strategic planning
 It increase efficiency of business
 It helps in comparison of business performance
Disadvantages of MIS
 Lack of quality of output
 Not a Substitute for judgement
 No tailor made package
 Lack of flexibility
 Costly affair
 Hording of information
 Ignoring non-quantitative factors
 Greater chance for failure
 Frequent changes to top management
Basic structural concept of MIS
1. Public information system
It is a part of an organization and all the relevant persons
have knowledge about the information system and
everyone has access.
2. Private information system
It is maintained by privately where certain piece of
information are not available to others and there is a
discrimination in file accessing.
3. Formal information system
There is a certain well prescribed rules and procedures to
be followed processing and data dissemination.
4. Informal information system
There is no rules and procedures for data processing and
sharing.
5. Formal public information system
Management information system with its specified rules
and procedures is a part of formal public system
6. Informal public information system
Strict rules and procedures may not be found in this
information system.
7. Formal private information system
Besides these formal and informal system, there are also
formal and informal private system in an organization.
8. Private informal information system
Many individuals may maintain their own private
information system for discharging their duties more
effectively.
Multiple approaches to the MIS structure
1. MIS structure based on operating elements.
2. MIS structure based on decision making.
3. MIS structure based on management activity.
4. MIS structure based on organizational functions.
1. MIS structure based on operating elements.
The structure of management information system can be
viewed in terms of its operating elements. The various
elements necessary for the operation of MIS is known as
its operating elements. Operating elements of MIS
consists of
a) Physical components.
b)Processing functions.
c) Output for uses.
a) Physical components:
Hardware, Software, Database, procedures and operating
personnel are the important physical component required
for the implementation of MIS in an organisation.
Hardware: All physical components of computer system
is called computer hardware. Important components
includes CPU, input output device, storage unit and
communication devices.
Software: Software provides the interface between users
and information system. It refers to the instruction given to
the hardware to perform various operations. Software can
be divided in to two- system software and applications.
 System software- It comprises of operating system,
utility programs and special purpose programs.
 Application- These are developed to accomplish a
specific task.
Database: It is a centrally controlled collection of
organized data.
Procedures: Procedures are the operating instructions for
the people who use an information system.
Operating Personnel: People are needed for the operation
of all information systems. The personnel in MIS include
computer operators, programmers, system analyst and
managers.
b. Processing function
An information system can also be described in terms of
processing function. The important processing functions
are
a. Process transactions
b. Maintain master files.
c. Produce reports.
d. Process enquiries.
e. Process interactive support applications.
c. Output for users
Output is considered to be a major factor of an information
system. It can be classified as
a. Transaction documents
Documents produced by transaction processing system
are called transaction documents.
 Action documents- These document initiate an action
or transaction on the part of the recipient. Eg:
Purchase order.
 Information documents- These documents relates,
confirm or prove to their recipients that transaction
have occurred. Eg: sales receipts, sales order
confirmation.
 Investigational documents- Reports of exceptions,
errors or other conditions may be require investigation.
b. Preplanned reports
These have a regular format and content. These reports
are produced at regular intervals. Eg; Inventory balance and
sales analysis.
c. Preplanned enquiry response.
Enquiries are handled on line which means the enquiry is
made and the response is received immediately via
terminal.
d. Ad hoc reports.
These reports are produced at irregular intervals and the
information content and its format has not been
preplanned.
e. User machine dialogue.
It is essentially a way in which a user can interact with a
model to arrive at an analysis or solution.
2. MIS structure based on decision making
The ultimate purpose of MIS is to make decision at all
levels of operations based on information flow. The habit
of making decisions is based on the problem solving
process.
Decisions making involves the following 4 stages:
 Intelligence phase: This stage consists of
identifying and understanding the problem
occurring in an organisation.
 Design phase: In this stage decision makers
evaluate all possible causes of action.
 Choice phase: Under this stage, manager select
most favourable cause of action from different
alternatives.
 Implementation: In this stage, decision is putting to
effect.
 Programmed decision (Structured decision)
It is the one in which decision rules are applied. These
decisions are routine and repetitive. It is also called
structured decision.

Characteristics / Features of programmed decisions

1. These decisions are well defined.
2. These decisions are repetitive and routine in nature.
3. Cost of taking decision is low.
4. Decision can be done with the help of computers.
5. Decision can be delegated to lower level employees.
6. Predetermined decisions rules are used.
Non-programmable decision (Unstructured decision)
These types of decisions are occasional and unique in
nature. There are no predefined procedures available to
solve the problem for each occurrence. It is also called
unstructured decisions.
Characteristics / features of non-programmable decisions
1. These are occasional and unique in nature.
2. These are not repetitive.
3. No predefined procedures.
4. These decisions cannot be delegated.
5. Cost of taking decision is high.
3. MIS structure based on management activity
MIS provides useful information to different levels of
management for discharging their functions more
effectively and efficiently.
a. Strategic management: The first decision area of
management is strategic planning level or top level
management. It consists of board of directors and other
chief executives. They make the organizational goal,
objectives, strategies, policies etc.
b. Tactical management: Management control level or
middle level management decisions involve financial
or personal
 consideration. They develop medium range plans
and defining objectives of their departments.
c. Operational management: Operational
management or lower level management deals with
routine activities. They make short term plans to
carry day to day activities more effectively and
efficiently.
4. MIS structure based on organizational functions
MIS is typically an integrated combination of functional
information system that is designed to meet information
requirement of the functional sub divisions of an
organisation. Functional sub systems:
 Production
 Marketing
 Human resource
 Finance and accounting
 Logistics
 Information processing.