List of the Steps Involved in Installation of MIS.

Installation of MIS in an organization is not an easy task. This needs the guidance of specialists under whom the need of information at various levels of management has to be recognized and to find out the best available sources to get this information.

List of Steps for the Installation of MIS.

To know the needs regarding information:

First an analytical study of those information is made which are needed for the external parties related to the organization, viz. Government, customers, suppliers, labor unions, etc.

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The needs of information are related with the size of the organization, nature of business, financial position, technical state, government policies, and several other factors. There are two methods to judge the needs of the information.

First, the users of the information may be asked as to how much information they need to accomplish their task. Secondly, they should be asked as to how they take the decision and then judge What information should be provided to them.

To explain the objectives of MIS:

The second step is to clearly define the objectives. Just mentioning, to increase the efficiency is not sufficient. Objective should be clear in terms of what one will do with the information received by him.

The size of the objectives is related with the planning, management, control and continuous flow of information.

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To determine the sources of information:

After estimating the need of information and clearly defining the objectives, the third step in installation of MIS is to determine the sources of information. There are several sources.

The internal sources are accounts, files, statistical papers etc. and external sources are commercial and government publications information can also be collected by personal interviews and personal inspections.

To set the method of collection and classification of information:

After determining the sources of information, the method of collection and classification of information is chalked out. It is decided what will be the source of information, frequency, quantity and time of information?

After collection how it will be classified? Where computers are used the statistical information is fed into them, for which an outline is prepared?

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Method of giving information:

The next step is to determine the method of giving information. It is decided as to whom the information is to be given, how many copies are to be prepared, when and what will be its frequency and in which form it is to be given. They can be communicated by reports, charts, statements or even orally.

Cost-profit analysis:

Finally, the costs to be incurred in information system should be assessed and the benefit should be estimated. The cost of information system includes the cost of its implementation, practicing it and its evaluation. These costs should be compared with the cost of present system of giving information.

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Evaluation:

Three to six months after implementation of management information system it should be evaluated, so that it can be judged whether the cost incurred in its implementation is less than the benefits derived from it and also if it satisfies the needs of the persons using it. If it is not satisfactory, steps should be taken to make it more effective and useful.

CONSTRAINTS IN OPERATING MIS.

The problems which are usually faced and the major constraints which come in the way of operating an information system are the following:

Non availability of experts, who can diagnose fully the objectives of the organization and give a desired direction needed for operating information system.

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  • Difficulty usually faced by experts in selecting the sub-system of MIS,. to be designed and operated upon first.
  • Source of availability of experts for running MIS effectively is not always known to management.
  • Due to varied objectives of business concerns, the approach adopted by experts for designing and implementing MIS is non-standardized One.
  • Non-availability of co-operation from staff.
  • Non-availability of heavy financial resources required for running the MIS effectively.
  • Turnover of experts is quite high & it is difficult to quantify the benefits of MIS, so that it can be easily comparable with cost.
  • Perceptional problems as its utility is not readily perceptible by many users.
  • Competition and state of uncertainty that surrounds business today.

Also read | The Evolution of Management Information Systems (MIS).

VARIOUS MIS REPORTS (Required to evaluate the various functional sub system). Various functional sub-systems of a manufacturing organization are as follows:

  • Corporate planning sub-system.
  • Purchasing.
  • Manufacturing.
  • Production & Inventory control.
  • Stores.
  • Marketing and sales.
  • Finance.
  • Accounts (including Costing).
  • Personnel.
  • Engineering.
  • Research & Development.

Various MIS reports required to evaluate various functional sub-systems are as follows:

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Report of Budgeted and Actual Profit: This report is prepared in accounts department and points out clearly the figures of budgeted and actual profit of the concern during a specified period. It also states the reasons, which have accounted for any decrease or increase in the actual profit figure.

Sale Report: This report is prepared by marketing and sales division and provides a complete sales analysis of different products sold in different geographical areas by the concern.

The analysis is based on the budgeted and actual sales figures. It clearly points out the difference between budgeted and actual sales figures, known as sales variance with reasons.

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Production Report: This report is prepared by the manufacturing division of the concern and states about the production targets achieved by the production department and also highlights variation between budgeted production and actual achievements.

Funds Flow Statement: This statement is prepared by the accounting and finance division of the concern and it clearly points out various sources of fund as well as their application areas during any period.

Cash Flow Statement: Such a statement gives the figures of cash inflows and cash outflows during the period of operations. It also indicates the sources of funds utilized in case cash outflows are more than cash inflows.

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Orders in Hand Report: This report is prepared by marketing and sales division and states in quantitative terms the orders received by the concern in respect of each of its products along with the ratio of orders on hand to production capacity.

Abnormal Losses Report: This report is submitted by the manufacturing division of the concern and reflects any increase in product cost, arising due to abnormal situations in the areas of material, labor and idle facilities.

Report of idle Time: This report is prepared at the shop floor level of the manufacturing division by using time booking records. This report states clearly the time actually spent by the worker on different jobs and the time for which he was sitting idle due to either want of material, electricity or any other source.

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Report on Machine Utilization: This report too is prepared by the superior in-charge of the shop floor in the manufacturing division. Such a report clearly gives the details of machine hours utilized for different jobs and the duration for which machine remained idle.

Budget: Several types of budgets are prepared in the business, i.e., income and expenditure budget, production budgets, cash budgets, etc. These budgets contain a vast information.

Cost Reports: In respect of different departments of an enterprise several cost reports are prepared. For example: production cost report, departmental cost report, etc. Through these reports several types of information are given to the management.

Statistical Publications: Several types of statistical information are needed for plan formulation, decision-making and control. They are obtained from published and other sources.

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Financial Statements: Income statement and balance sheet are important sources of giving financial information not only to shareholders but also to the government and other concerned parties.

Other MIS can use many other reports and statements besides those mentioned above. They may be daily production statement, daily statement of raw material, used stock statement etc.

IMPLEMENTATION OF MIS.

In an organization where MIS is to be installed, it is desirable to examine if there has been any older system in operation. If there is one, it is better that it is allowed to operate in parallel till the new system is fully in operation. It will also be possible then to examine relative advantages of the new over the old information system.

Also read | Evolution of Data Models.

The plan of implementation involves the following tasks:

  • Preparation of organizational plans.
  • Planning of work flaw.
  • Training of personnel.
  • Development of software.
  • Acquiring of computer system.
  • Design of forms for data collection.
  • Construction of data files.
  • Operation of system in parallel.
  • Cutting over of the old and putting the new system.
  • Evaluation maintenance and control.
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