What is the role of Management Information System (MIS) in sustaining efficiency and effectiveness of an organization?

What is the role of Management Information System (MIS) in sustaining efficiency and effectiveness of an organization? Explain with the help of the prevailing MIS in an organization known to you. Briefly describe the organization along with its reporting relationships.


A management information system (MIS) is a system that provides information needed to manage organizations effectively. Management information systems are regarded to be a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.
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. According to Philip Kotler "A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers."
Applications of MIS ---------With computers being as ubiquitous as they are today, there's hardly any large business that does not rely extensively on their IT systems. However, there are several specific fields in which MIS has become invaluable.
 Strategy Support While computers cannot create business strategies by themselves they can assist management in understanding the effects of their strategies, and help enable effective decision-making.
 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 in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually.
 MIS systems can also use these raw data to run simulations - hypothetical scenarios that answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product. These Decision Support Systems (DSS) enable more informed decision making within an enterprise than would be possible without MIS systems.
Data Processing
Not only do MIS systems allow for the collation of vast amounts of business data, but they also provide a valuable time saving benefit to the workforce. Where in the past business information had to be manually processed for filing and analysis it can now be entered quickly and easily onto a computer by a data processor, allowing for faster decision making and quicker reflexes for the enterprise as a whole.
Management by Objectives
While MIS systems are extremely useful in generating statistical reports and data analysis
they can also be of use as a Management by Objectives (MBO) tool.
MBO is a management process by which managers and subordinates agree upon a series
of objectives for the subordinate to attempt to achieve within a set time frame. Objectives
are set using the SMART ratio: that is, objectives should be Specific, Measurable, Agreed, Realistic and Time-Specific.
The aim of these objectives is to provide a set of key performance indicators by which an
enterprise can judge the performance of an employee or project. The success of any MBO objective depends upon the continuous tracking of progress.
In tracking this performance it can be extremely useful to make use of an MIS system.
Since all SMART objectives are by definition measurable they can be tracked through the
generation of management reports to be analyzed by decision-makers.
Benefits of MIS
The field of MIS can deliver a great many benefits to enterprises in every industry.
Expert organisations such as the Institute of MIS along with peer reviewed journals such
as MIS Quarterly continue to find and report new ways to use MIS to achieve business
objectives.
1. Core Competencies
Every market leading enterprise will have at least one core competency - that is, a function they perform better than their competition. By building an exceptional management information system into the enterprise it is possible to push out ahead of the competition. MIS systems provide the tools necessary to gain a better understanding of the market as well as a better understanding of the enterprise itself.

2. Enhance Supply Chain Management
Improved reporting of business processes leads inevitably to a more streamlined production process. With better information on the production process comes the ability to improve the management of the supply chain, including everything from the sourcing of materials to the manufacturing and distribution of the finished product.

3. Quick Reflexes
As a corollary to improved supply chain management comes an improved ability to react to changes in the market. Better MIS systems enable an enterprise to react more quickly to their environment, enabling them to push out ahead of the competition and produce a better service and a larger piece of the pie.

4. Significant cost benefits, time savings, productivity gains and process re- engineering
opportunities are associated with the use of data warehouse for information processing.
5. Data can easily be accessed and analysed without time consuming manipulation and processing.

6. Decisions can be made more quickly and with confidence that the data are both time-relevant and accurate.
7. Integrated information can be also kept in categories that are meaningful to profitable operation
Further information about MIS can be found at the Bentley College Journal of MIS and the US Treasury’s MIS handbook, and an example of an organisational MIS division can be found at the Department of Social Services for the state of Connecticut.
MIS in Banking Sector (AXIS BANK)
Axis Bank, previously called UTI Bank, was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I), Life Insurance Corporation of India (LIC), General Insurance Corporation Ltd., National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation and United Insurance Company Ltd. UTI-I holds a special position in the Indian capital markets and has promoted many leading financial institutions in the country.
For example, using MIS strategically can help a company to become a market innovator.
By providing a unique product or service to meet the needs of customers, a company can
raise the cost of market entry for potential competitors and thus gain a competitive
advantage. Another strategic use of MIS involves forging electronic linkages to customers and suppliers. This can help companies to lock in business and increase switching costs. Finally, it is possible to use MIS to change the overall basis of competition in an industry. For example, in an industry characterized by price wars, a business with a new means of processing customer data may be able to create unique product features that change the basis of competition to differentiation.
Relevance of Data Warehousing and Data Mining for banks in India. Banking being an information intensive industry, building a Management Information System within a bank or an industry is a gigantic task. It is more so for the public sector banks which have a wide network of bank branches spread all over the country.
At present, banks generate MIS reports largely from periodic paper reports/statements submitted by the branches and regional/zonal offices. Except for a few banks which have been using technology in a big way, MIS reports are available with a substantial time lag. Reports so generated have also a high margin of error due to data entry being done at various levels and the likelihood of varying interpretations at different levels. Though computerization of bank branches has been going on at a good pace, MIS requirements have not been fully addressed to. It is on account of the fact that most of the Total Branch Computerization (TBC) software packages are transaction processing oriented. They have been designed primarily for day-to-day operations at the branch level and day-end balancing of books
Need for building MIS
The need for building MIS at the corporate level has increased considerably during the last few years because of the following reasons:
 Regulatory requirements indicated by the RBI for preparation of Off-site Monitoring Surveillance (OSMOS) Reports on a regular basis in electronic format
 Regulatory requirement of filing of statutory returns such as the one under Section 42 of the Reserve Bank of India Act, 1934 for working out Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) obligations in electronic format
 Asset Liability Management (ALM) guidelines for banks being implemented by the RBI w.e.f. April 1, 1999 with the stipulation that the banks should capture 100 percent of their business through the ALM system by April 1, 2000.
 Need for timely submission of Balance Sheets and Profit & Loss Accounts
 Focus on transaction costing and a need for relating the service charges levied on the customers to be based on cost of servicing
 Need for Inter-Branch Reconciliation of Accounts within a definite time frame
 Need to meet the stipulations made by the Central Vigilance Commission (CVC) to computerise at least 70 percent of banking business by January 1, 2001.
 Need to undertake risk management strategies and for this purpose build up appropriate sets of data and market intelligence reports

Application of data warehousing and data mining techniques
Implication of adopting such technology in a bank would be as under
1. All transactions captured at the branch level would get consolidated at a central location. Such a central location could be called the Data Warehouse of the concerned bank
2. For banks with large number of branches, it may not be desirable to consolidate the transaction details at one place only. It can be decentralised by locating the services on regional basis.
3. By way of data mining techniques, data available at various computer systems can be accessed and by a combination of techniques like classification, clustering, segmentation, association rules, sequencing, decision tree (described in detail at Annexure-15), various ALM reports such as Statement of Structural Liquidity, Statement of Interest Rate Sensitivity etc. or accounting reports like Balance Sheet and Profit & Loss Account can be generated instantaneously for any desired period/date
ORGANISATION COMPUTING RESOURCES SOFTWARE RESOURCES
RisKompass : A software system for derivatives valuation and risk management, RisKompass enables clients to manage derivative trades in a further controlled way from the front to back office. Supporting the industry standard FpML (Financial Product Markup Language) protocol, it can manage valuation and risk management of a broad range of derivatives instruments. The system will handle derivatives such as interest rates and foreign exchange for Bank.
ORGANISATION COMPUTING RESOURCES
1. The implementation will provide the bank with an automated system that reduces manual effort to streamline its operations.
2. The benefit envisaged by the bank is that everybody being on the same system, it can be accessed by anyone on the different locations of the bank.
3. The users at the bank would include traders, dealers and risk managers.
4. The solution will result in smoother deal processing, with verifying and online risk monitoring mechanism.
5. It will streamline all operations and the risk mechanism can be monitored centrally
Electronic Clearing Service (ECS Credit)
•Electronic Clearing Service (ECS Credit)
ECS Credit is an electronic clearing system that facilitates paperless transaction through an offline system. Bank facilitates ECS Credit at all ECS designated locations. We accept the electronic file and arrange abstention of settlement date (date of credit to beneficiary account) from RBI/SBI/Local Clearing House as the case may be. The funds gets debited from a centralized account and credit is accorded to the respective beneficiaries as per settlement cycle. A detailed MIS about the transactions is provided to the customer.

NEFT
To establish an Electronic Funds Transfer System to facilitate an efficient, secure, economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India. The customer willing to avail the NEFT facility offered by us shall submit an "NEFT Application Form" authorising the sending bank to debit the sender's account and transfer funds to the beneficiary specified in the NEFT Application Form. The Beneficiary's account will be credited on the same day by crediting the specified account of the beneficiary or otherwise placing funds at the disposal of the beneficiary.
Centralised Service Desk
A dedicated service desk has been started at our Centralised Collection and Payment HUB (CCPH) to ensure that your queries are resolved quickly and efficiently. The Customers can contact CCPH regarding any query about the MIS or the process flow.
• Web CMS Web CMS provides you with all the information at a click. Detailed MIS Like location wise collection and return, product-wise pooling, pooling in pipeline (due credit report) etc. can be viewed and downloaded from web interface through internet
Comprehensive MIS We provide comprehensive MIS reports like daily report, transaction report future credits reports and cheque returned unpaid report. On the payments side we provide daily paid - unpaid status for the demand drafts, cheques or warrants issued by your Organisation.

Mobile Alert Service
The CMS clients availing our collection products now have the facility to subscribe to Mobile Alert Service for receiving alerts on registered mobile phone numbers instantly after the funds are pooled. To avail this facility, please visit nearest CMS designated branch or log on to our Web CMS to download the form online and send it to our branch where your account is maintained.

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Explain the concept of Management Information System.

Explain the concept of Management Information System. Describe various control processes being used in your organization or any organization you are familiar with, Assess the effectiveness of these controls and highlight critical deviations.

MANAGEMENT INFORMATION SYSTEM:-
MIS is a formal method of making available to management the accurate and timely information necessary to facilitate the decision making process and enable the organization’s planning control, and operational functions to be carried out effectively. The system provides information about the past, present, and projected future and about relevant events inside and outside the organization.
Organizations have always had some kind of management information system, even if it was not recognized as such. In the past, these systems were highly informal in setup and utilization. When registrar office staff kept transcripts on handwritten charts, they were using an information system. Not until the advent of computers, with their ability to process and condense large quantities of data, did the design of management information systems become a formal process and a field of study.
The growth of EDP departments spurred managers to focus more on planning their organization’s information systems. These efforts led to the emergence of the concept of computer – based information systems (CBIS), which became better known as computer – based MIS – or simply MIS, As the EDP departments
functions expanded beyond routine processing of masses of standardized date, they began to be called MIS departments.

8. CHAPNED METALS:-
Some control techniques being adopted by a company chapner metals are:-

(A) 1. FINANCIAL CONTROLS:-
Managers in Chapner Metals use a series of control methods and systems to deal with the differing problems and elements of their organizations. The methods and systems can take many forms and can be intended for various groups. Financial Controls have a special prominence, since money is easy to measure and tally.

2. FINANCIAL STATEMENTS:-
Financial statements are used to track the monetary value of goods and services unto and out of the organizations. They provide a means for monitoring three major financial conditions of an organization:

(i) Liquidity: the ability to convert assets into cash in order to meet current financial needs and obligations.
(ii) General Financial Condition: the long-term balance between debt and equity (the assets left after liabilities are deducted).
(iii) Profitability: the ability to earn profits steadily over an extended period of time.
Financial statements are widely used managers, shareholders, financial institutions, investment analysts, unions and other stakeholders to evaluate the organizations performance managers, for example, could the organizations current
financial statements to past statements and to those of competitors as one measure of how well the organization is doing over time. They might be able to see trends that require corrective action. Bankers and Financial analyst on the other hand will use the statements to decide whether they should invest in the firm.

3. BALANCE SHEET:-
The message of a balance sheet is “Here show this organization stacks up financially at this particular point in time”. In its simplest form, the balance sheet describes the company in terms of its assets, liabilities, and net worth. A company’s assets range from money in the bank to the goodwill value of its name in the market place. The left side of the balance sheet lists these assets in descending order of liquidity. A distinction is made between current assets and fixed assets.

4. INCOME STATEMENT:-
While the balance sheet describes a company’s financial condition at a given point in time, the income statement summarize the company’s financial performance over a given interval of time. The income statement, then says “Here’s how much money I’ve made over a given period” instead of “Here’s how much money wve’re worth now”
Income statements, start with a figure for gross receipts or sales and then subtract all the costs involved in realizing those sales, such as the cost of goods sold, administrative expenses taxes, interest, and other operating expenses. What is left
is the net income available for stockholder’s dividends or renitent in the business.

(B) BUDGETARY CONTROL METHODS:-
Budgets are formal quantitative statements of the resources get aside for carrying out planned activities over given periods of time. As such, they are widely used means for planning and controlling activities at every level of the organization. There are a number of reasons for their wide usage.
• First, budgets are stated in monetary terms, which are easily used as a common denominator for a wide variety of organizational activities hiring and training personnel, purchasing equipment, manufacturing, advertising and selling.
• Second, the monetary aspect of budgets means that they can directly convey information on a key organizational resource-capital and on a key organizational goal – profit. They are heavily favored by profit – oriented companies.
Sometimes, the significance of budgetary control is not properly understood, either too much or too little emphasis is given to the budgetary control. this leads to certain dangers which are:-

1. Too much emphasis on budgeting may bring about rigidity in the enterprise. It may deprive the managers of the flexibility they require in managing their departments.
2. A budget which allows liberal expenditure may be used to hide inefficiency.
3. Sometimes, budgets are treated as an end in themselves.
These problems are often faced by chapner metals.
9. AUDITING:-
To much of the general public, the term auditing is associated with detecting fraud. Although the discovery of fraud is, one important facet of auditing, it is far from the only one. Auditing has many important uses, from validating the honesty and fairness of financial of statements to providing a critical basis of management decisions. Two ways of auditing are external audit and internal audit.

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