MANAGEMENT INFORMATION SYSTEM (MIS)

Definition
An organized approach to the study of the information needs of an organization's management at
every level in making operational, tactical, and strategic decisions. Its objective is to design and
implement procedures, processes, and routines that provide suitably detailed reports in
an accurate, consistent, and timely manner.
In a management information system, modern, computerized systems continuously
gather relevant data, both from inside and outside an organization. This data is then processed,
integrated, and stored in a centralized database (or data warehouse) where it is constantly updated and
made available to all who have the authority to access it, in a form that suits their purpose.

Contemporary Approaches to Information Systems

Although information systems are a collection of electrical and mechanical devices, they require the
organization, and the people that work within the organization for them to be successful.
1. Technical Approach
The technical approach uses mathematical models to test the capabilities of information systems.
These disciplines include:
 Computer Science - concerned with methods of computability, computation, and data
storage and access.
 Management Science - emphasized the development of models for decision making, and
management practices.
2. Operations Research - focuses on mathematical techniques for optimizing selected parameters of
organizations (inventory control, transaction costs).
3. Behavioural Approach
Behavioural changes can occur within the organization during, and after information system
development. The key to this approach is to find the solution to the behaviour, which is not a
technical issue.
 Deals with behavioural issues that arise in the development, and long term maintenance of the
information system.
 Different disciplines, such as psychologists, sociologists, Economists, study information
systems, and the impacts they have in the organizational environment.

The Challenge of Information Systems: Key Management Issues

1. The Information Systems Investment Challenge
Too often managers look at their technological investments in terms of the cost of new hardware or
software. They overlook the costs associated with the non-technical side of technology. Is
productivity up or down? What is the cost of lost sales opportunities and lost customer confidence
from a poorly managed e-commerce or e-business Web site? How do you determine if your
management information system is worth it?
Many brick-and-mortar companies have seriously struggled with e-commerce Web sites because of
the drain on corporate resources for which they weren't prepared. As successful as Wal-Mart is in
the traditional retailing sense, their Web site, Walmart.com has at times resembled a yo-yo more
than a successful e-commerce venture. The site has been reinvented, reworked, and reintroduced
more times than a second-rate rock band. Information systems should be part of the solution and
not part of the problem.
2. The Strategic Business Challenge
Companies spend thousands of dollars on hardware and software only to find that most of the
technology actually goes unused. "How can that be?" you ask. Usually because they didn't pay
attention to developing the complementary asset associated with the full integration of the
technology into the organization. Merely buying the technology without exploiting the new
opportunities it offers for doing business smarter and better doesn't make you a digital firm. Think
 and rethink everything you do, and figure out how you can do it better. Information must be
managed just as you would any other resource.
3. The Globalization Challenge
The world becomes smaller every day. Competition increases among countries as well as
companies. A good management information system meets both domestic and foreign
opportunities and challenges. How does DaimlerChrysler integrate its organizations and cultures
into one — or almost one?
4. The Information Technology Infrastructure Challenge
You have to decide what business you are in, what your core competencies are, and what the
organization's goals are. Those decisions drive the technology, instead of the technology driving
the rest of the company. Purchasing new hardware involves more than taking the machine out of
the box and setting it on someone's desk. Remember the triangle of hardware, software, and
persware; take care of the people and they will take care of the rest! Information architecture is the
description of how technology is incorporated into the mainstream processes in which the business
is involved. How will the new information system support getting the product produced and
shipped? How will the information system help the Advertising and Marketing department know
when to launch ad campaigns? How will Accounting know when to expect payment using the
information system?
5. The Responsibility and Control Challenge
Remember, humans should drive the technology, not the other way around. Too often we find it
easier to blame the computer for messing up than to realize it's only doing what a human being told
it to do. Your goal should be to integrate the technology into the world of people. Humans do
control the technology, and as a manager, you shouldn't lose sight of that fact.

Strategic Planning in MIS

Strategic information systems are those computer systems that implement business strategies;
They are those systems where information services resources are applied to strategic business
opportunities in such a way that the computer systems have an impact on the organization’s products
and business operations. Strategic information systems are always systems that are developed in
response to corporate business initiative. The ideas in several well-known cases came from
information Services people, but they were directed at specific corporate business thrusts. In other
cases, the ideas came from business operational people, and Information Services supplied the
technological capabilities to realize profitable results.

Different Types of Management Information Systems

Management information systems are those systems that allow managers to make decisions for the
successful operation of businesses. Management information systems consist of computer resources,
people, and procedures used in the modern business enterprise. The term MIS stands for management
information systems.MIS also refers to the organization that develops and maintains most or all of the
computer systems in the enterprise so that managers can make decisions. The goal of the MIS
organization is to deliver information systems to the various levels of corporate managers. MIS
professionals create and support the computer system throughout the company. Trained and educated
to work with corporate computer systems, these professionals are responsible in some way for nearly
all of the computers, from the largest mainframe to the desktop and portable PCs.
Management information systems can be used as a support to managers to provide a competitive
advantage. The system must support the goals of the organization. Most organizations are structured
along functional lines, and the typical systems are identified as follows:
1. Accounting management information systems: All accounting reports are shared by all levels of
accounting managers.
2. Financial management information systems: The financial management information system
provides financial information to all financial managers within an organization including the chief
financial officer. The chief financial officer analyzes historical and current financial activity,
projects future financial needs, and monitors and controls the use of funds over time using the
information developed by the MIS department.
3. Manufacturing management information systems: More than any functional area, operations
have been impacted by great advances in technology. As a result, manufacturing operations have
changed. For instance, inventories are provided just in time so that great amounts of money are not
spent for warehousing huge inventories. In some instances, raw materials are even processed on
railroad cars waiting to be sent directly to the factory. Thus there is no need for warehousing.
4. Marketing management information systems: A marketing management information system
supports managerial activity in the area of product development, distribution, pricing decisions,
promotional effectiveness, and sales forecasting. More than any other functional area, marketing
systems relies on external sources of data. These sources include competition and customers, for
example.
5. Human resources management information systems: Human resources management
information systems are concerned with activities related to workers, managers, and other
individuals employed by the organization. Because the personnel function relates to all other areas
in business, the human resources management information system plays a valuable role in ensuring
organizational success. Activities performed by the human resources management information
systems include, work-force analysis and planning, hiring, training, and job assignments.

Decision Support Systems for Supply Chain Management

1. Demand Planning
 Accurate demand forecasts are critical for the efficiency of the entire supply chain.
 Uses statistical tools
 Demand forecast is part of the input for most of the supply chain decision support systems.
 We will start discussing forecasting today.
2. Logistics Network Design
 Determines
 Warehouse and factory locations
 Assignment of retailers or customers to warehouses
 Input:
 Candidate locations
 Transportation costs
 Aggregate demand forecasts
3. Inventory Deployment
 Determines which inventory to keep at what level, in which warehouses, and at what times.
 Input:
 Transportation costs
 Demand forecasts
 Inventory holding costs
4. Sales and Marketing Region Assignment
 Determines assignments of sales representatives to marketing regions so that both the
customers and the sales representatives are happy while sales are maximized.
 Input:
 Customer locations
 Demand forecasts
5. Distribution Resource Planning (DRP)
 Determines the routes and the inventory policies for a set of warehouses and retailers.
 Input:
 Warehouse and retailer locations
 Transportation costs
 Demand forecasts
6. Material Requirements Planning (MRP)
 Uses a products bill of materials (BOM) and component lead times to plan when manufacturing
of a particular product should begin.
 Very popular in the industry
  BUT often creates impossible schedules because it does not take production capacities into
account .
 Decision maker creates a feasible schedule by modifying the MRP output.
7. Inventory Management
 Inventory management is complicated when many different items are present
 Proposes inventory policies with low cost and high customer service.
 Input:
 Transportation costs
 Inventory holding costs
 Lead times
 Demand forecasts
8. Production Location Assignment and Facility Deployment
 Given a network of production facilities being capable of producing particular products,
suggests possible assignments of products to manufacturing facilities.
 Input:
 Transportation costs
 Inventory holding costs
 Lead times
 Demand forecasts
9. Fleet Planning
 Determines how to send out products with a firms own truck fleet and/or commercial carriers.
 Difficulties:
 Complex rate structures (e.g. TL vs LTL)
 Usually a dynamic decision making problem
 Two examples:
 Mobil: 77% of routes are different than a manual system and saves $1 million annually
 CSX: Computer aided routing and scheduling (CARS) generates routes very similar to the
manually generated ones without taking into account all the business rules. BUT this also
implies that it is not very cost effective.
10.Lead Time Quotations
 Sales representatives need to quote delivery lead times in real time while taking orders.
 Usually quoted lead times are longer than necessary to guarantee delivery by the promised date.
 Determines accurate lead times by taking the current production schedules, manufacturing
times, and delivery times into account.
11. Production Scheduling
 Proposes a manufacturing sequence and schedule by considering:
 Products
 Processes
 Due dates
 Precedence relationships.
12.Workforce Scheduling
 Proposes a possible employee schedule to ensure necessary labor is available at all time by
considering:
 Production schedules
 Labor costs
 Set of work rules
 FEDEX used such a system during negotiations on work rules with its pilots.