Here is a compilation of essays on ‘Management Information System (MIS)’ for class 9, 10, 11 and 12. Find paragraphs, long and short essays on ‘Management Information System (MIS)’ especially written for school and college students.
Essay on Management Information System (MIS)
Essay Contents:
- Essay on the Meaning of Management Information System
- Essay on the Concept of Management Information System
- Essay on the Elements of Management Information System
- Essay on the Objectives of Management Information System
- Essay on the Functions of Management Information System
- Essay on the Five Categories of Report for MIS
- Essay on the Role of MIS in Planning and Control
- Essay on the Designing Management Information System
- Essay on the Impact of Computers on Management Information System
- Essay on the Models of MIS
- Essay on the Sub-Systems of MIS
- Essay on the Deficiency of Early MIS
- Essay on the Requirement of Successful MIS
- Essay on the Configuration of MIS
- Essay on the Development of MIS
- Essay on the Applications of MIS
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Essay # 1. Meaning of Management Information System:
Management Information System is an all comprehensive information system which is primarily not concerned with the information generated by routine data processing operations, which are called structured information, because every step of processing has been laid out in detail and routine data is used to generate routine information at regular interval which are used by different departments for routine operations like paying salary and wages or preparing the cost sheets.
MIS is concerned with generation of non-structured information, whenever these are required. For example, suppose the company is proposing a major expansion for which people of special skill would be required. Having decided on the quality and quantity of the human resource for the proposed expansion, it is necessary to know how many existing employees could be used for this purpose and what training is required to be given to whom.
Even though the employee data base is stored in the computer, if the computer system in the organization has been geared for doing only routine data processing, it would be extremely difficult to get this information which is of vital nature. Hence, Management Information System is primarily concerned with how to get unstructured information for decision making.
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Basically all MIS are driven by operational data processing, that is, its required information mostly come from the data already stored for day-to-day operations, but it is processed in a different manner to quickly generate the required information.
Essay # 2. Concept of Management Information System:
By Management Information System (MIS) we mean a system designed to supply information required for effective management of an organisation. Any organisation is managed by taking various decisions at the various levels of its management hierarchy. Information is needed to take these decisions.
Quality of decisions will largely depend upon the nature and type of information provided for taking the decisions. Therefore, designing of an effective information system is vital for the efficient working of an organisation. It can be built around electronic computers in case of a big organisation.
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Management Information System is designed to supply information required for effective management of an organisation. Quality of decisions will largely depend on the nature and quality of information provided for making the decisions Thus, provision of an adequate information system is vital for the effective functioning of an organisation.
Essay # 3. Elements of MIS:
By now it should be clear what are the basic components of a Management Information System.
These are:
(i) Management:
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The user or customer of the information.
(ii) Plant Personnel:
The activities of whom generate most of the data required to build up the database of the MIS.
(iii) The Computer Hardware:
Where the data base is stored and which is used for generating the required information.
(iv) The Computer Software:
Which processes the data from the database using the hardware to convert these to information.
(v) Computer Personnel:
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The supplier, who provide the information to the management, Maintenance Function with the technical health of the plant and machinery, and so on.
Essay # 4. Objectives of Management Information System (MIS):
The common objectives of MIS are listed below:
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1. To make the desired information available in the right form to the right person and at the right time.
2. To supply the required information at a reasonable cost.
3. To use the most efficient methods of processing data.
4. To provide necessary security and secrecy for important and/or confidential information.
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5. To keep the information up-to-date.
Essay # 5. Functions of Management Information System:
Functions of an Information System can be broadly classified into following two groups:
(i) Data Collection
(ii) Data Management.
(i) Data Collection:
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Who should collect what data and in what form and how often? The nature and the form of data will vary from organisation to organisation depending upon its objectives. The manner of data collection will depend upon the purpose for which data is collected. After collection of data, irrelevant data should be filtered out and the relevant data should be properly classified and tabulated so that it can be used easily when needed.
(ii) Data Management:
A good data management system must have the following characteristics:
(a) It should be efficient in respect of routine processing operations.
(b) It should be flexible.
(c) The retrieval of information in case of an enquiry should be efficiently accomplished.
Any data management system should be capable of giving efficient service in terms of day-to-day processing of information. With the changes in conditions, demand on the information system may change. It may be that same information may be needed in different format or different levels of aggregation may be needed. An efficient system should be able to quickly respond to these types of demand on the system.
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Essay # 6. Five Categories of Report for MIS:
(i) Schedule Reports:
The information which are generated at regular intervals like bank over-draft position, sales achieved, age analysis of sundry debtors, payment commitments to be met in the coming week, etc.
(ii) Exception Reports:
These information are action oriented, that is, it calls for certain actions of corrective nature to ensure that the target profitability is achieved. The Variance Analysis report, which points out the variations from planned performance is one of this type. Again, this report would be in different form for different levels of management.
For the Operational Level, it will give the full details because at this stage corrective actions would be initiated. For higher levels of Management the report would get progressively condensed highlighting only the major variations, as for them, it is mainly for information and discussion for taking major remedial steps, if required, like replacing a machine.
(iii) Prediction Reports:
The information generated by these kind of reports are used for forecasting of future operations, like preparation of investment proposals, operational budget, sales forecasting, etc.
(iv) Demand Reports:
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These reports cater to the information required to solve a problem which has suddenly cropped up and are of totally unstructured type, depending on what the problem is.
(v) Hybrid Reports:
This involves both the factors of problems and exceptions.
(vi) Criteria of Information:
The category of reports broadly specified could be for any level of management and to make them relevant, we have to also classify them from the point of timing and detail, as shown below. It is to be remembered, as information is a resource, getting this resource involves expenditure of other resources, money being a major item.
Essay # 7. Role of Management Information System in Planning and Control:
It is of value in as much as it improves or facilitates the performance of the managerial functions. Information should help the management in the basic task of planning, decision-making, performance evaluation and the taking of remedial action. Therefore, it can be said that the prime purpose of developing an information system is to supplement corporate planning and control systems.
An MIS that is not tailored to the needs of the planning and control systems is meaningless. On the other hand, planning and control systems which are not served by an effective information system may be only of marginal utility.
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The design of the MIS therefore should take into account the basic criterion of contributing to effective managerial planning and control systems. The importance of planning and control in the managerial context is self-evident. The MIS in turn derives its importance from the fact that it is the link pin of the planning and control functions.
In fact, it makes sense to think of the “information and control system” or the “information and planning system,” rather than of the “information system” in isolation.
Given this inseparable relationship between the information system on the one hand and the planning and control systems on the other, the relationship between the organisation structure and the planning and control systems becomes a relevant consideration for the designers of management information system.
Essay # 8. Designing of Management Information System (MIS):
Management Information System (MIS) is the linking mechanism which connects all decision-making centres in an organization. The development of an MIS should be a well thought-out process.
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It should consist of the following steps:
(i) Planning of System:
Planning of Management Information System requires the identification of objectives of the system. This further requires a clear formulation of objectives of the organisation, spelling out of the activities required to be carried out, work relationship, work patterns and their sequence; and above all the defining of physical boundaries of the system. Thus, this step involves the description in generalised terms of the course of action and the limitations within which the system has to be designed.
(ii) Organising Flow of Information:
The system designer should study what is the prevailing flow of information and compare it with what should be flow of information. He should also study how this gap could be removed.
This study is based on the following premises:
(a)The critical deficiency under which most managers operate is the lack of relevant information.
(b) The manager needs the information he wants for decision-making.
(c) If a manager has the information he needs, the decision-making will improve.
(d) Better communication between managers will improve organisational performance.
(e) A manager does not have to understand how his information system works, only how to use it.
It should be noted that an information system working exclusively, i.e. in isolation of other organisational sub-systems, would lead to certain deficiencies. Hence the MIS should be imbedded in overall management control system.
The system designer has to take the decision in respect of the number of files to be maintained, the equipment to be used for processing of data such as manual, electronic or automatic processing, etc., the personnel to be employed for this purpose and the ways of processing and storing the information required on an exceptional basis.
Above all, a cost-benefit analysis of the system is essential.
(iii) Implementation:
It deals with the fitting in of MIS into the organisation structure.
The various alternatives available in this connection are:
(i) The old information flow may be allowed to continue as it is and new system may be installed to meet the requirements of the new operation;
(ii) The old system may be scrapped completely and supplanted by the new one; and
(iii) Phasing the installation of the new system and scrapping the old one.
It is important to appoint and train personnel for operating the MIS. The procedures for actual installation of the equipments to be used and development of the support facilities is yet another major decision area. Obtaining the printed formats and reports is the next task. The most difficult part of this phase is the amalgamation of the information system and the organisation structure.
The place of MIS unit in the organisation structure mainly decides the success or failure of the same. Keeping MIS as a part of some other function would mean that this unit will have to function within the framework of its supervising department. This might lead to a conflict of objectives and result in non-coordination.
Since the MIS is a function equally applicable to all the departments, the need for giving it a separate status is of paramount importance.
(iv) Feedback:
The feedback regarding the actual functioning of the Management Information System is a must for the designers to fill up the gap between its planning and implementation. The changes in the environment also need to be incorporated. If the MIS is not corrected for these deviations, it will lead to malfunctioning of the MIS.
Hence, the system should be continuously reviewed in the light of changes in the environment both within the organisation and outside the organisation. Necessary steps will have to be taken to modify the system in the wake of these changes.
Essay # 9. Impact of Computers on Management Information System (MIS):
“Computerised management systems created as great a revolution in management techniques in the twentieth century as the industrial revolution did in industrial techniques in the nineteenth century. These systems have brought management face to face with information processing technology.”
The management information concept is today intrinsically linked with Electronic Data Processing (EDP) because of its huge data processing capacity. The management information systems and EDP provide a middle ground for business managers as they become involved with computer systems and for systems analysts as they become increasingly concerned with complex management problems.
It is no exaggeration to state that the computer has probably contributed more to the current management development than has any other single entity. It has been indeed a catalyst agent for enlarging the scope of organisation and management theories and management techniques in almost all its segments.
The impact of computers on the practice of management shows the following trends:
(a) Computers can be applied to the routine operations of management such as record-keeping, making payrolls and inventory control.
(b) Computers have eliminated the computational barriers from complex management problems.
(c) Computers have increased the effectiveness of Management Information System (MIS).
Hence a computerised management information system has the potential to provide significant new dimensions to the practice of management. This potential cannot however be fully exploited until the manager and the systems analysts participate in establishing system objectives and system design.
Data Base Management System:
Data Base Management System (DBMS) software packages are useful in situations where in the same data are used by different persons for different purposes. For example, the data regarding sales orders may be required by the marketing department, financial department and production department. In such situations, inter-related data are properly organized and stored. Such a collection of interrelated data is called a data base.
DBMS packages provide facilities for creation of such data bases and their management.
Management of data bases involves the following activities:
(a) Creation of data base.
(b) Adding new data to the existing data base.
(c) Editing the records in the data base.
(d) Manipulating data in data base. Besides performing different calculations, it may involve rearranging the data in some desired order.
(e) Preparing reports using a selected section of the data base.
(f) Making queries from the data base regarding any particular set of data.
Essay # 10. Models of MIS:
Different models have been suggested by different experts, two of which are briefly discussed below:
Bowman’s Three-Stage Model:
This model three stages for successful MIS implementation:
Level 1:
Based on the long range corporate planning process, called Strategic Planning, the strategic Management Information System [MIS] Planning is undertaken to decide on what information the system should be able to provide in what manner. It starts with the needs of the Top Level of Management, which are identified first.
Level 2:
Assessing the total requirement of information need of the organization, both for strategic, tactical, and operational decision making, using the top-down approach. A large number of information are generated within the organization itself, which can meet many of the needs of the top level and middle level and so these are now identified, going to lower levels step by step to define these.
Level 3:
Committing resources to build up, maintain, and operate the Management Information System.
Earl’s 3-Level Model:
The three levels have been defined as:
1. Information System Strategy: ISS
2. Information Technology Strategy: ITS
3. Information Management Strategy: IMS
1. Information System Strategy:
The starting point, as before, is the overall business strategy, which with continuous reference to different levels, ultimately defines the total information requirement of the organization at various levels.
2. Information Technology Strategy:
At this stage attempt is made to evaluate and determine how the available computer technology and its anticipated future developments would be able to cater to the requirement defined at ISS level. It also takes into account the networking and other communication facilities.
Not only the hardware portion of the computer system, but the availability of relevant software with scope for modification are also-taken into consideration, to draw the IT Strategy to be followed.
3. Information Management Strategy:
The final level involves overall strategy which is concerned with planning in detail how the organization will manage its both information system and technology, to meet organizational need for information. It decides upon degree of centralization, the rules and regulations, authority, and funding of the total system development. It is a mixture of both the top-down and bottom-up approach. A provision for periodical auditing of the MIS is also provided.
Whatever be the model followed or strategy adopted for building up a Management Information System, total commitment from the top level of management is a must — lip service will not help.
Essay # 11. Sub-Systems of MIS:
Transaction Processing:
Transaction Processing — deals with sales orders, material receipts issues, remuneration payment, etc all the routine operations. Each deal between two persons or organizations constitute a transaction, be it buying or selling, receiving or giving materials or services.
Operational Control:
Operational Control – deals with planning and controlling of day to day operations, which generate the data which is processed under the sub-system known as Operational Control.
Management Control:
Management Control — this is synonymous with tactical planning, which uses more information than it generates.
Strategic Planning:
Strategic Planning – this is concerned with both internal and external information for the specific purpose of long time survival.
Decision Support System — DSS:
This can be termed as a specialized area of Management Information System which enables application of scientific management techniques of the discipline called Operations Research in decision making using the Information Technology System, which comprises the hardware of the computers backed by matching software system.
The advantage of applying mathematics in management decision making system takes care of uncertainties of future projections of performance in a systematic manner. For example, in case of major investment involving crores of rupees which is expected to provide benefit over next twenty years can not only be appraised beforehand but also execution planned by applying scientific techniques, for which a number of specialized softwares are also available, called Network Management Programs.
Again, the technique called Simulation can be applied to simulate a real life situation on computer with mathematical models to understand what could be the impact if certain decisions are made.
A Decision Support System is:
1. Designed to deal with unstructured problems of strategic and technical nature, for which neither any ready solution is available nor it can be dealt in a routine manner, because previous experience with solving such kind of problems is not available.
2. Takes care of what-if situations. Before taking critical decisions with far reaching consequences, management often resorts to a technique, commonly called what-if technique, that is, what will happen if we do this or do that. In this exercise, various input parameters are systematically changed to see their impact on the output and then the most optimum choice is selected. The Lotus 1-2-3 software developed by Lotus Development Corporation and similar packages provide excellent facilities for this what-if techniques.
3. Provides ease of use, that is, it is user friendly. With present complexity in all disciplines, it may not be possible for everybody to be an expert in all areas. Hence, those systems which provide easily understandable answers are preferable and DSS, if properly designed, is supposed to do that.
4. Has fast response, managers do not have to wait for ages to get the information required for immediate decision making.
5. Provides graphical output. Once the drab statistics is presented in a graphical form with charts and pictures, immediately the message is clearly conveyed even to a lay man. Hence, graphical display facilities are a part of proper Decision Support System.
Executive Information System Executive Support System EIS / ESS:
As already discussed, the most critical area of decision making is the Top Management Level where strategic decision having great bearing on the future performance of the organization are made. Executive Information System or Executive Support System is aimed for strategic level of planning and decision making.
It has to provide all the features of DSS plus:
1. Alternative views of information
2. Access to external data
3. Performance indicator statistics
Although, at tactical and operational levels, in-company information can serve most of the purpose, for decisions of strategic nature, it is essential to monitor the environment as the business organizations are not closed systems. Hence data must be collected from external sources in a systematic manner and the necessary information generated.
The kind of data required can come from different spheres and such data are related to:
1. Economic data:
What are the different policies under consideration by governments and international bodies, which can have an impact on the performance of the organization under consideration.
2. Competitor’s data:
How the competitors, local and global, are performing, what new technologies are being developed, what pricing strategies are being followed, etc. are essential data for any organization.
3. Marketing data:
How the market segments are being created and shared, what marketing strategies are being adopted, etc.
4. Legal and political data
5. Environmental and Energy position.
Information Resource Management:
This is a management approach, which accepts that information is a vital resource for business, which when properly used can improve the business performance.
Expert System:
The discipline of Cybernetics have been developed to represent human movements, as far as possible, by electro-mechanical devices, which has given birth to Robots. The Expert System is a similar venture to represent decision making ability of a human expert by using a computer’s processing abilities, so that although the computer has no intelligence, it can be programmed to show some intelligence like human being, called Artificial Intelligence. This system is called Knowledge-based System.
To build an expert system in a specific area, say dispensing homeopathic medicine, computer professionals make extensive study of the way a Homeopath Doctor analyses the symptoms to conclude about the disease affecting the patient. Based on this analysis, processing rules are build up, which will try to follow the same logic as the doctor, from the same set of data, used by him, to arrive at the same decision.
Once the knowledge based system is developed and the knowledge of the expert is stored in the computer in the form of a database, the computer would be able to offer intelligent advice or take an intelligent decision about a particular subject. One of the desirable characteristics of the Expert System is that it will be able to justify its own line of reasoning in an understandable manner to the person who asks for it. This is then called Rule Based System.
However, this is an extremely complex process and calls for high level of expertise with lot of investment. Hence, an attempt can be made to develop an Expert System only if large number of people would use the system. Obviously, an Expert System can be build up if the logic applied by the expert can be translated into a hierarchy of rules.
Generally, this type of systems are attempted to be developed when decision making is quite complex. Unfortunately, there has not been any spectacular success in this area, as human mind is far far superior to a computer. Some elementary Expert System software are available.
As per an expert, if human intelligence is taken as 100, the intelligence level of a modern super-computer would be around 0.01, which is the intelligence level of a dragon fly.
Essay # 12. Deficiency of Early MIS:
1. Total lack of appropriate touch — there was no on-line, or real-time processing choices to get information quickly. The question of interconnecting computers of different offices of the same organization did not exist.
2. The then computer operations being highly complicated, the system was very much error prone, making large number of mistakes in the generated information.
3. It was more or less a static system, since to introduce any changes in the computer processing involved long time; highly insensitive to environmental changes.
4. There used to be large communication gap between the user departments and the computer personnel, who had a false sense of superiority and so was very much uncooperative. Moreover, the languages used by each was different from the other — computer professionals did not know what was debit or credit and the accountants did not know what was bit or byte.
Essay # 13. Requirements of a Successful MIS:
1. It should provide timely, relevant, accurate data to the management in a manner required by them.
2. It should be flexible enough to move with the changes in operation and environment.
3. It should have the reliability to ensure that decision based on the information generated by the system do not lead to disasters.
4. It should be a simple system to operate and maintain, not calling for high skill on the person of the users.
5. The system must be cost-effective. It should not be developed in such a way that the resources spent on developing it is much more than the benefits derived from it.
6. The system must be need based, fully catering to the needs of all the levels of management.
7. Must have a common database with a structure simple enough to the user from the logical point of view, that is how the user will see it.
8. The system must be secured enough to prevent unauthorized copying of vital information by anybody.
9. The system should have the capability of recovering from disasters caused by hardware or software failures.
10. The system should not be accessible to unauthorized persons in any manner, who can destroy the vital database.
11. The system should preferably be inter-connected so that senior executives can directly interact with the database to generate their own information quickly.
Essay # 14. Configuration of MIS:
1. The Management Information System can be developed directly on the operational Data Processing System, by sharing the same database. In such a case there may be conflict at times because both the operational control system and management information system may try to access the same data base simultaneously. But the advantage is that the MIS would always have the updated data captured by the operational system.
2. The data for the Management Information System could be kept in a separate computer which is linked with the computer being used by the operational system. Here MIS will naturally not interfere with the Operational System, but if the data transfer from the operational database is not regularly made, the database of the MIS may become updated.
3. It could be a Distributed Database, with local data being stored in different regions, with MIS having access to all these databases for information generation.
Essay # 15. Development of MIS:
Basically the Management Information System can be developed in two ways — either starting at the top of the organization and going down to cover it fully, called Top-Down Approach, or, starting at the lowest level and going up, ultimately reaching the top, called Bottom-Up Approach.
1. Top-Down Approach:
Taking into account the strategic information need of the top-level of management, the overall system is first defined. Then this system is decomposed to respective sub-systems following either functional or resource management approach, or a mixture of the two.
Once the sub-systems are defined and integrated with the overall system horizontally or vertically, the information needs of the lower levels are assessed taking into account the sub-systems defined. In this way, beginning at the top, the overall information need is laid out and then steps taken to implement it.
2. Bottom-Up Approach:
As the name suggests, first the vital data processing needs for handling operational bottlenecks are identified, among which payroll usually comes first. Initially, the transaction processing activities are computerized or assumed to be computerized independently and then these are integrated to combine the data files of each sub-system to build the data base.
This way, starting at the lowest level and slowly progressing to higher levels to meet their information needs, ultimately the need for providing information for strategic planning are developed — at this stage, the database of the Management Information System could be separated in another computer, but inter linked with operational data base, to maintain flow of operational data. Normally, a mixture of the two is followed, because most of the organizations start with computerizing one function at a time and then doing the whole.
Current Situation Analysis: CSA:
It is quite likely that knowingly or unknowingly the bottom-up approach for computerization has been partly implemented in an organisation. Then, to develop a fully operational MIS, what should be the starting point?
The technique is known as Current Situation Analysis, which helps the planners to:
1. identify the various problems in this area
2. remove any misconception that may be prevailing because of computerization
3. define the areas to be computerized for information generation
4. define a starting point where from the launching process of MIS can start
The CSA is carried out by developing a Set of Questionnaire and going round the organization to get the answers to the questions set.
The questions could be like:
1. What is the cost effectiveness of the existing system? Is it consuming more resources than the value of the information resources being generated.
2. How good is the system from maintenance point of view, as far as hardware and software are concerned? Maintainability of software implies ease in modifying the program to incorporate the required changes necessary.
3. What is the reliability of the existing system?
4. How often the system is used as an essential and regular part of the operation of the organization. This is of particular importance in organizations having microcomputers commonly called personal computers. In most of the cases these days they are used only for writing letters or playing games.
5. How simple or complicated the system is to the persons using it? The users cannot be expected to be computer experts or highly skilled programmers, so the system has to be, what is called User Friendly — simple enough for the users to operate and also understand it. No matter how sophisticated a system is, to succeed it must be user friendly.
6. If the existing system is completely removed, what effect will it have on the performance of the department or process?
A simple System Audit Grid is available which equates Technical Quality with Business Value of the existing system and takes proper decision.
The grid is:
Essay # 16. Common Application Areas of MIS:
The broad areas where MIS is extensively used are:
(i) Order Processing:
No organization can survive unless the products manufactured by it are sold or the services provided are availed by the customers. Hence procuring orders for its products and services is an important function and it is entrusted to the Marketing Department, who creates and also maintains existing customers, sells the products/services, realizes outstanding, provides after sales service, carries out advertisement campaigns and even market research. Hundreds of useful information can be produced from the data generated by this function.
The information could be on:
Products sold / services provided — region wise, product wise, sales force wise, which would show growth/decay and help in taking tactical decisions and making future projections. Some of the information is also used in strategic decision making.
Customers complaints handling — an analysis will show the quality of the goods sold or services provided.
After Sales Service — in case of durable consumer goods, the quality of after sales service, not only enhances sales but also reflects how the organization is fulfilling the needs of its customers.
Credit Policy Management — in many cases, products are sold on credit and if one is not careful, the sales force may provide higher credit to secure more sales and some of these may remain unrealised for a long time. Information in this area, with age wise analysis, in close cooperation with the finance function, always help to improve business profitability.
The information on competitor’s products and services are often collected by the marketing function, as they are directly in touch with the market.
(ii) Purchasing:
Purchasing is a sub-system of the Materials Management function, with Stores being another important area. Purchasing is another area which is of critical importance, as their mission is to provide the right quantity of material of right quality and at right cost at right time to the manufacturing function, maintenance function and other departments. It is extremely important to build up a database of vendors, with their performance rating, so that quality goods can be purchased at minimum expenses.
It is also necessary to develop new vendors, as depending on a single vendor can be at times dangerous. The creditors are created by the Purchase Department who finance a part of the working capital of the organization. In this area a close cooperation between the finance function is necessary so that the suppliers are paid on time, as otherwise not only future supplies will be disturbed, the quality will suffer and the cost will go up.
(iii) Inventory Control:
The material purchased, the partially processed ones called work-in- progress, components obtained, and the finished products all represent money in different physical shapes and sizes. Any reduction in expenditure by bringing down stock holding always contributes to business profitability.
The ABC Analysis, FSN Analysis, VED Analysis etc various Operation Research Techniques which are available to determine the optimum stock level, reordering level, and economic ordering quantity of stores and spares with the dual objective of bringing down holding level but at the same time ensuring that production stoppages do not take place due to stock out. Fund management is closely tied up with inventory and higher profitability can be achieved with better inventory control.
(iv) Payroll:
Employee dissatisfaction always has an adverse effect on organisational performance and hence every organisation which has gone for computerization has invariably started with payroll system, to ensure that employees are correctly paid on time and also statutory obligations in this area is fulfilled. Other than payroll accounting, an useful MIS can be built around employee data, so that succession plan, training and development actions, recruitment etc can be done on systematic manner.
(v) Financial Accounting:
Though preparation of annual financial account is a statutory obligation, a lot of contribution in profitability can be made by preparing such accounts on short duration and analyzing the trend of various items for taking corrective measures.
(vi) Cost & Management Accounting:
No organization can survive in the long run without an effective cost accounting system, which is closely integrated with the financial accounting system. Application of Budgetary Planning and Control with Marginal Cost Techniques is the only way to evaluate the performance of hundreds of man-machine combinations performing in the organization
to ensure profitability of the organization. The area called Management Accounting has over the years, become the main function which provides the top management with vital information for strategic decisions.
Apart from the specific areas mentioned above there are a number of areas where computerization for information generation greatly contributes to improved organizational performance, which varies from one organization to another. But careful selection should be made, followed by critical analysis to ensure that costly resources are not wasted to generate trivial information in the name of building a Management Information System.