Management information system and control

MANAGEMENT INFORMATION SYSTEM AND CONTROL

SUBMITTED TO: SUBMITTED BY:SHAVETA MAM SAKSHA SHARMA

5810, M.COM II

INTRODUCTION• Business performance measurement is a

device which is used mostly to evaluate the business processes and to control the business operations in a manner traditional accounting does not allow.

• Despite the growing use of BPM systems there are a lot of limitations-

• a) excessive diversity in the field of study • b) data quality • c) information integration problem • d) lack of linkage to strategy • e) high levels of change in BPM systems • f) judgment and decision bias etc.

MIS AND BPM• A lot of control techniques which have

been discussed till now can be performed with the help of computer generated information systems.

• E.G.- Vendors that provide different types of control systems:- SAP, SAP AG, QPR, SIMPEL systems etc.

• There is a need to formulate these systems, provide training to use these systems, interact between the different levels to get data, processing of data, decision making, integrating the different types of systems etc.

MIS AND CONTROL• Information is required at every

level either to set up standards, to know the actual performance, to compare the results, find out deviations and to take corrective action, hence there is a need of a management information system.

• It also involves interactive control i.e. communicating with the employees directly and hence information systems play a significant role.

RELATION OF MIS AND BPM• Concept of business performance management

is based upon management control systems. Management control systems are regarded as the subset of the internal control procedures in an organization, which cover the application of people, application , technology and procedure used by the management accountants to solve the business problems such as costing a product, operations or a business wide strategy.

• MIS satisfies diversifies diverse needs through a variety of systems such as query analysis, modeling system, analysis system and decision support system.

RELATIONSHIP•Tracking and monitoring functional targets.•It helps in creating structured database and knowledge base in the organization.• It brings clarity in communication in the organization.• Pull the entire organization in one direction.• Impacts managerial efficiency.• It helps in value creation and differentiation.• It helps in using MBO as an effective measurement tool.

WHAT IS MIS

MANAGEMENT- Art of getting the things done effectively and efficiently with the use of limited resources. It involves doing the right things in a right manner.

INFORMATION- Processed form of data. It conveys a meaning to the user of the same. It has an order, it is organized, precise, and is a result of processing and refining data.

SYSTEM- It is a collection of people, machines, and methods organized to accomplish set of specific tasks. It is a set of components that operate together to achieve a common purpose.

DEFINITIONSData

Raw facts such as an employee’s name and number of hours worked in a week, inventory part numbers or sales orders.

Information

A collection of facts organized in such a way that they have additional value beyond the value of the facts themselves.

DataInformation

$35,000 12 Units $12,000 J. Jones Western Region $100,000 100 Units

35 Units

Data Processing

Salesperson: J. Jones Sales Territory: Western Region Current Sales: 147 Units = $147,000

EVOLUTION OF MIS

Electronic data

processing

Transaction processing

system

Management Information

system

Decision support system

Enterprise resource planning

STEPS TO BUILD A MIS AND REPORTING SYSTEM

• The objective and goal of MIS are guided by the objectives and goals of organization.

Define the mission of the organization• Identify external factors which impinge organization

Determine critical variable• Study organization and responsibility centre

Examine the production process and marketing situation

Study system and record how information flows

Determine the information needs of the organization

Develop information and reporting system

Finalize systems after consulting the users

INFORMATION SYSTEMS IN BUSINESS

TYPES OF INFORMATION SYSTEMS

TRANSACTION PROCESSING SYSTEM

• To record, validate and store transactions that take place in various functional areas. e.g. recording of business transactions.

• Transactions are processed in same way each time. It is a link between organizational and external entities.

MANAGEMENT INFORMATION SYSTEM

• This uses the information obtained from TPS or other ERP systems and provides managers insight into operations to help in decision making.

• It is the collection of various reports which involve key indicators.

• It is inclusive of a feedback making process.

TYPES OF INFORMATION SYSTEMSFINANCIAL MANAGEMENT REPORTING

SYSTEM

• It integrates both financial and operational information from both internal and external systems. E.g. profit/loss and cost accounting etc.

• An imp. Usage is fund management, profit/loss and cost systems and hence use TPS information for enhancing information quality for MIS.

DECISION SUPPORT SYSTEM• Basic function is to track and

record costs and help in it’s reduction. Also provide drill down through data facility.

• It involves what- if analysis, goal seeking analysis, simulation facility for all types of decision makers.

• More flexible than MIS and help in problem solving.

TYPES OF INFORMATION SYSTEMS

EXECUTIVE SUPPORT SYSTEM• It helps executives in strategic

decision making and tracking critical success factors. It is specialized DSS and can be used by employees and even BOD.

• They are tailored for particular executives and involves mainly external or internal data sources.

• Useful in situations having high degree of uncertainty and is future oriented. It is related to value added business processes.

INFORMATION REPORTING SYSTEM• Also called management reporting

system. It obtains inputs from TPS and produces feedback reports on operations. It makes use of multiple information systems for this purpose.

• It is a planned , integrated system for gathering data, converting it into information and supplying to executives for decision making.

• It generated periodic and exception reports which support planning and control function of the organization. It minimizes information overload.

TYPES OF INFORMATION SYSTEM

OFFICE AUTOMATION SYSTEM• Aimed at improving the efficiency and

productivity of office operations, include activities like word processing, electronic filing, dairy management, communication, including electronic mail, telex and fax.

• Activities like word processing, preparing excel spreadsheets, database management, desk-top publishing, graphics, project management, calendar, electronic mails etc. are done through this.

• This reduces the clerical errors and the effort required at rectification.

EXPERT SYSTEMS• It captures and stores the knowledge of

the expert and imitates human reasoning and decision making process for those who have less expertise . It has 2 components – a knowledge base and inference rules.

• They fall under the artificial intelligence branch of computers. They use very specific domain and special programming languages. Mainly useful for problem solving.

• They attempt to process knowledge. It is designed to model problem solving ability of a human expert.

LEVELS OF MIS

NEED OF MIS

•Management Directed•Business Driven•Integrated

•Common Data Flow•Heavy Planning element

•Subsystem Concept•Flexibility and Ease of Use•Data Base