The structure of MIS can also be described in terms of organizational functions which make use of information. The term organizational function information systems is used to describe a variety of information system that support an organizational function such as accounting, finance, production, marketing, human resource management etc. Each of these functions has its own information needs.
MIS is a typically an integrated combination of functional information systems that is designed to meet the info requirements of the functional subdivisions of an organization. Each of these functions is considered as a subsystem. These subsystems have info application related to that function only. In addition there are common programs applicable to all functional subsystems. With in each of these functional subsystems, there will be application for transaction processing, operation control, managerial control and strategic planning.
The important functional subsystems are the following.
1. Production Subsystem
Production info system support the production function which includes all activities concerned with the planning & control of the processes that produce goods or service. In the production subsystem there are transaction processing, operation control, managerial control & strategic planning. The typical info required at the transaction processing level is production orders. The production order is generally based on the sales orders required by the company.
At the same time operational control level requires detailed reports comparing actual performance with the production schedule & identifies the weak areas. However management control requires a summary report which compares the overall performance to actual performance. Strategic planning is concerned with simplifying, automating ,integrating many of the activities needed to produce goods.
2. Marketing Subsystem
Marketing is another important function of an organization. The success of an organization depends on the efficiency of marketing. The marketing function of an organization is concerned with the planning, promotion & sale of existing products in existing markets & the development of new products & new markets to satisfy existing & potential customers. Thus marketing performs a vital function in the operation of the business enterprise.
MIS help analyze dd for different products in different regions. It’s mainly concerned with the marketing right product to target customers. Marketing info system provides info for planning, control & transaction processing in the market function. Strategic & operational info system assists marketing managers in product planning, pricing decisions & advertising & sales promotion strategies. MIS provides info that helps management to decide the number of sales executives to assign specific products in specific geographical areas.
The basic transaction is to be processed at transaction processing level is customer’s orders & prepares invoice & bills. The operational control activity includes the day to day scheduling of sales & promotional activities. Managerial control level is concerned with comparison of overall performance with the marketing plan. They require info relating to customers, competitors etc. consideration of new markets & new product marketing strategies are the issues dealt at the strategic planning level.
3. Human Resource Subsystem
The HRM function is concerned with the recruitment, placement, compensation & development of employees in an organization. It mainly helps in record keeping & employee evaluation. Every organization must maintain correct record of its employees.
Produce pay cheques & pay reports, maintain personal records & analyze the use of personnel in business operation are the important activities done at the transaction processing level. Management control level conducts budget analysis, turnover analysis etc & showing the variances resulting from planned & actual performance. Strategic planning of personnel involved with the planning of alternative strategies for recruiting, training & compensating employees. In this regard they have to collect different type of info from external sources.
4. Finance & Accounting Subsystem
Financial subsystem undertakes the function of arranging adequate finance to the business at min cost. This function includes granting credit to customers, cash management & financial arrangement. Accounting info system record & report the flow of funds through the organization on a historical basis & prepares important financial statements like profit & loss account & balance sheet.
Transaction processing system engaged in the legal & historical record keeping & produces financial statements. They undertake activities like order processing, inventory control, payroll & general ledger systems. Management control level focuses on planning & control of business operations & they compare the actual cost of financial resources with the targeted cost. The strategic planning level for accounting & finance involves in the long term strategies connected with financial & accounting matters.
5. Logistics Subsystem
The logistic subsystem includes activities like purchasing, receiving, inventory control & distribution. The transactions to be processed are purchase requisitions, manufacturing orders, receiving reports & shipping orders. The operational control function make use of info contained in reports like out of stock items, over stocked items, inventory turn over reports etc managerial control level compares the planned & actual inventory levels, cost of purchased items, stock outs etc analysis of new distribution strategies, adoption of new policy towards the sellers are some of the common tasks dealt at the strategic planning level.
6. Information Processing Subsystems
It’s the responsibility of the info processing subsystem to provide the necessary info processing services & resources. Typical transactions for info processing are requests for processing, changes in data & program. Managerial control over info processing requires data on planned & actual performance. Acquisition of hardware & software & automation of info processing etc are some of the strategic decision to b taken at the top level management.Next : MIS Structure Based on Management Activity