DEVELOPMENT OF MANAGEMENT INFORMATION SYSTEM

Development of Long Rate Plans of the MIS

Any kind of business activity calls for long range plans for success, the same being true for MIS. The plan for development and its implementation is a basic necessity for MIS. In MIS the information is recognized as a major resource like capital, time and capacity. And if this resource is to be managed well, it calls upon the management to plan for it and control it for the appropriate use in the organization. Most of the organizations do not recognize `Information' as a resource. They have looked at information as one of the many necessities for conducting the business activity. Hence, due regard is often not given for its planned development and use. Many organizations have spent financial resources on computers purely to expedite the activity of data collection and processing. Many organizations have purchased computers for data processing and for meeting the statutory requirements of filing the returns and reports to the Government. Computers are used mainly for computing and accounting the business transactions and have not been considered as a tool for information processing. The organizations have invested in computers and expanded its use by adding more or bigger computers to take care of the numerous transactions in the business. In this approach the information processing function of the computers in the organization never got it s due regard as an important asset to the organization. In fact, this function is misinterpreted as data processing for expeditious generation of reports and returns, and not as information processing for management action and decisions. However, the scheme has been changing since late eighties when the computers became more versatile, in the function of Storage, Communication, Intelligence and Language. The computer technology is so advanced that the barriers of storage, distance, understanding of language and speed are broken. With the advancement of computer technology, it is now possible to recognize information as valuable resources like money and capacity. In short, we need a Management Information System flexible enough to deal with the changing information needs of the organization. It should be conceived as an open system continuously interacting with the business environment with a built-in mechanism to provide the desired information as per the new requirements of the management. The designing of such as open system is a complex task. It can be achieved only if the MIS is planned, keeping in view, the plan of the business management of the organization.

The plan of MIS is concurrent to the business plan of the organization. The information needs for the implementation of the business plan should find place in the MIS. To ensure such an alignment possibility, it is necessary that the business plan strategic or otherwise, states the information needs. The information needs are the traced to the source data and the systems in the organization which generate such a data. The plan of development of the MIS is linked with the steps of the implementation in a business development plan. The system of information generation is so planned that strategic information is provided for the strategic planning, control information is provided for a short term planning and execution.

Contents of the MIS Plan

A long range MIS plan provides direction for the development of the systems, and provides a basis for achieving the specific targets or tasks against a time frame. The plan would have the following contents which will be dealt by the designer under a support from the top management.

MIS Plan is linked to the Business Plan

MIS goals and objectives: It is necessary to develop the goals and objectives for the MIS
which will support the business goals. The MIS goals and objectives will consider management philosophy, policy constraints, business risks, internal and external environment of the organization and the business. The goals and the objectives of the MIS would be so stated that they can be measured.

The typical statements of the goals are as under:

Provide on-line information on the stocks, markets and the accounts balances. The query processing should not exceed more than three seconds. The focus of the system will be on the end user computing and access facilities. Information support will be the first in the strategic areas of management such as marketing or service or technology.

Table: Business Plan versus MIS Plan

Such statements of the goals and objectives enable the designer to set the direction and design implementation strategies for the MIS.

Strategy for the plan achievement: The designer has to take a number of strategic
decisions for the achievement of the MIS goals and objectives. They are:

a. Development strategy: An online, a batch, a real time. b. System Development Strategy: An approach to the system development
Operational versus Functional; Accounting versus Analysis; Database versus Conventional Approach; Distributed versus Decentralized processing; one Database versus Multiple database SSAD vs. OOT.

c. Resource for System Development: In-house versus external, customized

development versus the use of packages.

Functional Information
The functional information is defined as a set of information required by the functional head in conducting the administration and management of the function. This information is purely local to that function and by definition, does not have a use elsewhere. This information is used by a manager to plan and control his function. Functional information is largely factual, statistical and detailed in multi-dimensions of the function. For example, if you take the sales information, it can be processed in seven ways, viz. the product, the product groups, the market segment, the geographic zones, the locations, the customer, and the sales organization structure. The functional information is normally generated at equal time intervals; say monthly, quarterly, etc. for understanding the trend and making comparisons against the time scale. Such as information is used for planning, budgeting and controlling the operations of the function. The functional information can be accessed on the following three parameters the work design, the responsibility and the functional objectives.

Work Design: For example, for the customer order scrutiny the available stock, the price,
the terms of payment and the probable delivery is an information set evolved out of the work design of customer order processing.

Responsibility: The managers in the functional areas of management are responsible for
achieving the targets and accomplishing the goals and objectives. It is, therefore, necessary to inform and update the information on targets at regular intervals to enable him to make or change decisions in his domain of operations. Most of these targets are business targets such as the turnover, production, utilization, stocks and so on. For example, the marketing manager has a monthly target of $ 1 million order booking, half a million invoicing, and not more than two months receivables. Since, he is responsible for achieving the targets, it would be necessary to inform him on these aspects at regular intervals. This information is used for the responsibility accounting and decision making for achieving the targets. The manager would be assessed on the basis of responsibility he discharges in conducting the business.

Knowledge Information
The information creates an awareness of those aspects of business where the manager is forced to think, decide and act. Such information shows the trend of the activity or a result against the time scale. For example, whether the sales are declining and the trend is likely to continue in the next quarter. The product is failing continuously on one aspect and the reason of failure is the process of manufacturing. Such information pin-points the area or entity and forces the manager to act. It highlights the deviations from the norm or standard and also any abnormal developments which are not in congruence with the forecasts or expectations. Such information gives rise to business decision, which will affect the process of business significantly. In some situations the strategic decisions may be necessary to solve the problem. The knowledge information may cut across the functional boundaries of the organization. The action or decision may fall in other functional areas of business operations, the decision may fall in the domain of top management or the middle management. Knowledge information is tracked continuously and reported in a fixed format, for consistency and at fixed intervals for updating the knowledge base. The nature of this information is analytical and relates to the past, the current and the future. The knowledge information is reported in graphic formats for a quick grasp and managerial response. It contains business results and comparative analysis of the performance.

Operational Information
This information is required by the operational and the lower levels of the management. The main purpose of this information is fact finding and taking such actions or decisions which will affect the operations at a micro level. The decisions may be to stay on overtime, draw additional material, change the job from one machine to the other, and send a reminder to the supplier for the supply of material. These decisions are such that they make the routine administration of the business smooth and efficient. These decisions do not fall in the category of the managerial decisions. The sole purpose of the MIS is to produce such information which will reduce uncertainly in a given situations. The moment what is unknown becomes known, the decision maker's problem becomes simple. Methods have been evolved to handle the degree of uncertainty the management is expected to deal with.

The difficulty to determine a correct and complete set of information is on account of the factors given below: The capability constraint of the human being as an information processor, a problem solver and a decision maker. The nature and the variety of information. Reluctance of decision makers to spell out the information for the political and the behavioral reasons. The ability of the decisions makers to specify the information.

Analyzing the Critical Factors

Every business organization performs successfully on the basis of certain critical factors. Other factors are important and play a support role in the functioning of the organization. Many times a function is singularly critical to the successful functioning of a business organization. For example, in a high technology business, the management of the technology becomes the critical function. Or in a service organization, the management of service becomes a critical factor. In a consumer industry, marketing and service become critical functions. The information requirements of such organizations largely relate to these critical factors. The analysis of these functions of factors will determine the information requirements.

MANAGEMENT OF QUALITY IN MANAGEMENT INFORMATION SYSTEM

Information is a corporate resource, as important as the capital, labor, know-how, etc. and is being used for decision making. Its quality, therefore, is required to be very high. Low quality information would adversely affect the organizational performance as it affects decision making. The quality of information is the result of the quality of the input data, processing design, system design, system procedure which generate such a data, and the management of the data processing function. Quality, unlike any other product, is not an absolute concept. Its level is determined with reference to the context and its use, and the user. Perfect quality just as perfect information is non-achievable and has cost benefit implications. However, it is possible to measure the quality of information on certain parameters. All these parameters need not have a very high value in terms of the unit of measure. Some parameters may have lesser importance in the total value on account of their relevance in the information and its use.

The quality of the parameters is assured if the following steps are taken:
All the input is processed and controlled. All updating and corrections are completed before the data processing begins. Inputs (transactions, documents, fields and records) are subjected to validity checks. The access to the data files is protected and secured through an authorization scheme. Intermediate processing checks are introduced to ensure that the complete data is processed right through, I.e., run to run controls. Due attention is given to the proper file selection in terms of data, periods and so on. Back-up of the data and files are taken to safeguard corruption or loss of data. The system audit is conducted from time to time to ensure that the computer system specification is not violated. The system modifications are approved by following a set procedure which begins with authorization of a change to its implementation followed by an audit. Systems are developed with a standard specification of design and development. Computer system processing is controlled through programme control, process control and access control.

Proper people organization is basic to the management of any activity or function. The same thing is true for the development of the MIS. The principle of the organization and structuring the organization to the specific needs of the function is a prime necessity. When we talk with reference to the MIS a number of issues come up and they are not the same in all the organizations. Hence, the organization structure of the MIS would differ from one organization to the other. The type, the size and the structure of corporate organization becomes the basis for the MIS organization for handling the MIS function and management alternatives. The major issues involved are: Whether the function should be handled as a centralized or decentralized activity. The allocation of the hardware and software resources. The maintenance of the service level at an appropriate level. Fitting the organization of the MIS in the corporate organization, its culture and the management philosophy.

The question of centralization versus decentralization is resolved by assessing the status of information resource in the organization, i.e., whether the status is the information system management or the information resource management. In a centralized set, the responsibility of acquisition of the data, of providing the information to the users, becomes the centralized function. The centralized organization is also recommenced when the information needs are more or less static. Depending upon the situation, hardware and software solutions are available. In a decentralized set-up the allocation the hardware is a centralized decision but the collection of data and its processing becomes the user's responsibility. Training, problem solving and system development, however, is a centralized function. In all such situations, the information processing is based on the database management system. Therefore, the management of the database becomes the centralized responsibility and its use becomes the responsibility of users. The MIS functions in any organization would vary on account of the issues mentioned earlier and too that extent the variations of these two models would be the organization of the MIS.

MIS - The factors of Success and Failure

Many organizations use MIS successfully, others do not. Though the hardware and the software is the latest and has appropriate technology, its use is more for the collection and storage of data and its elementary processing. There are some factors which make the MIS a success and some others, which make it a failure. These factors can be summarized as follows:

Factors Contributing to Success

If a MIS is to be success then it should have all the features listed as follows: The MIS is integrated into the managerial functions. It sets clear objectives to ensure that the MIS focuses on the major issues of the business. An appropriate information processing technology required to meet the data processing and analysis needs of the users of the MIS is selected. The MIS is oriented, defined and designed in terms of the user's requirements and its operational viability is ensured. The MIS is kept under continuous surveillance, so that its open system design is modified according to the changing information needs. MIS focuses on the results and goals, and highlights the factors and reasons for non achievement. MIS is not allowed to end up into an information generation mill avoiding the noise in the information and the communication system. 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. 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 information and its non-use. The MIS is easy to operate and, therefore, the design of the MIS has such features which make up a user-friendly design.

Factors Contributing to Failures

Many a times MIS is a failures. The common factors which are responsible for this are Listed as follows: The MIS is conceived as a data processing and not as an information processing system. The MIS does not provide that information which is needed by the managers but it tends to provide the information generally the function calls for. The MIS then becomes an impersonal system. Underestimating the complexity in the business systems and not recognizing it in the MIS design leads to problems in the successful implementation. 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. The MIS is developed without streamlining the transaction processing systems in the organization. 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. 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. A belief that the computerized MIS can solve all the management problems of planning and control of the business. Lack of administrative discipline in following the standardized systems and procedures, wrong coding and deviating from the system specifications result in incomplete and incorrect information. The MIS does not give perfect information to all the users in the organization.