What is Management Information System ?
A Management Information System (MIS) is a computer-based tool that facilitates the collection, processing, storage, and dissemination of information within an organization to support decision-making and organizational activities. It provides managers with timely and relevant data, often presented in the form of reports and dashboards, to help them make informed choices and effectively oversee various aspects of their business.
Management information system can be described as an integrated computer system which consists of head and hardware and software to achieve strategic role of organization its objective is to collect data to process and store it and produce information that is necessary for management to run the organization operation efficiently generally and images used to be generated the following four types of information.
An Management Information System (MIS) can play a very crucial role to provide strategic support to management of an organization to achieve a objective through efficient data processing and MIS can provide huge information so that it provide to be very fruitful investment only its this information changes the harmful behavior of the organization.
There are various good example of MIS which provided effective corporate governance in government as well as public and private sectors such as online banking system and online insurance system, management of education services, mobile customer services and online competitive examination. The above example of MIS provide effective handling of in enormous amount of transaction managed through effective scheduling and achieve good performance of operations.
Management Information System Meaning
The word 'MIS' is not new, Only its automation is new earlier the MIS management information system was used as a resources of information by the managers. this information would allow them to plan and control different operation used in organization .now, since the MIS is computerized ,it has increased its accuracy and speed which has allowed more alternatives which solving problem as well as decision making.
MIS provides the following types of information to the companies :
- Descriptive or 'what is ' information
- Diagnostic or 'what is wrong ' information
- Predictive or ' what if ' information
- Prescriptive or ' what should be done ' information
Management information system is also known as information system, the information and decision system , and the Computer Based information system.
Components of Management Information System
1. Management
Management can be defined as the procedure of planning and regulating the operation of an organization. Framing of policies, its execution and stopping of employees are its key task. The management procedure can be analyzed with the help of managers actions. These are as follows :
- Planning
- Staffing
- Organizing
- Directing
- Coordination
- Controlling
2. Information :
The word information is derived from Latin word 'informer' which means 'give form to' information is data that has been processed and retrieved in such a way to that it is meaningful to person who received it.
3. System :
A group of elements is called system these elements are called subsystem. All subsystem are grouped together to serve a common purpose.
Definition of Management Information System
According to G.B.Davis,
"A definition of an management information system, and the term is generally understood, is an integrated user machine system for providing information to support operation, management, and decision making functions in an organization, the system utilizes computer hardware and software, manual producer ,model for analyzing, planning control, and decision making and a database".
According to the Kenneth Hamlett,
"Management information system refers to the practice of integrating computer system, hardware and software used to make an organization that a goal"
According to Institute of Management accounts ,
"MIS is a system in which define data are collected, proceed and communicated to assist those responsible for the use of resources".
According to allen s . Lee,
"Management information system is a planned system of collecting, processing, storing and disseminating data in the form of information needed to carry out the function of management".
Features of Management Information System
The main features of MIS are as follow :
1) Integrative system :
An MIS is logically integrated system comprising of subsystem, where activities of each are interrelated . this integration is possible by the auto rotation of data among the sub system.
2) Sub- system concept:
Alto system is considered a single entity, but a big system is divided into sub system. so that one such system can be implemented at a time , for better effectiveness.
3) Provides relevant information to management:
MIS should provide only relevant information to managers. At times , determining relevant information becomes very difficult, especially when and analyses of problems is done differently by different managers, according to the varying circumstances. Thus, MIS provides relevant information and helps in reducing confusion and solving problems.
4) Flexible :
A MIS must be one that can be easily modified to changing circumstances.
It must be capable of expansion , accommodate growth or new type of processing activity and contraction as and when required.
5) Enhances productivity :
MIS oh whole improves the efficiency of an organization. It helps in efficient document preparation, provides high level of services to individuals and external organization, help in early detection of warning about internal and external problems ,and also in identifying opportunities. It assist in the overall management of organization and improve the managers ability to deal with unexpected problems.
6) Co-ordinated system :
MIS is centrally synchronized so that all its components such as data processing, office automation , intelligence and decision support system, are developed and managed in a planned and coordinated manner.
6) Feed back System :
MIS provides feedback about its own efficiency and effectiveness. The system itself provides statistics about by 'whom and 'how much' the system has been used.
8) Management Oriented :
MIS is design from top to bottom corner but not necessarily start from the management needs of the overall business goals. this means that the system may be developed keeping in mind the needs of the middle/operation management as well as the top management to stop .this ensures a good MIS.
9) Management Directed :
It is imperative that management should dynamically direct and development of system because Management Information System is management oriented. Management should decided that information is required and hence help in designing MIS.
10) Common Database :
Since MIS is an integrative system, it has the opportunity to avoid duplication and redundancy in data collection, storage and sharing. One master file should be maintained , which can then use be different function areas from their respective report preparation and analysis.
Need of Management Information System
An organization must have a very clear version about requirements such as type of information required, type of data available , type of stakeholders etc., at different levels of Management. An organization established and MIS for the following reasons:
- Efficiently storing and managing data of all business functional areas.
- Fast and accurate delivery of information, as and when needed.
- Processing of gathered data and developing information from it.
- Information availability for production and inventory.
- Providing information about current economic status of company.
- Faster implementation of results available from reliable data sources.
- Smooth flow of data within various levels of organization.
- Make availability of information required for planning organizing and monitoring business process.
Purpose and Objectives of Management Information System
1) Data Capturing :
MIS gathers information from various internal and external either manually or electronically with the use of computer terminals.
2) Processing of Data :
The collected data goes through a number of process like calculation , sorting, classification and summary for its conversion information.
3) Storage of information :
The processed or the unprocessed data stored in the MIS for future use by saving it as an organization record. The data may also be used immediately.
4) Retrieval Of Information :
As per the request of different uses, retrieval of information is done by MIS from its stores.
5) Dissemination of information:
Information is the final product of MIS which is equally accessible by all users in the organization. It may be periodic or online with the use of computer terminal.
Management Information System Strategy
A Management Information System (MIS) strategy is a comprehensive plan that outlines how an organization will use technology and information resources to achieve its business goals. It involves the collection, processing, storage, and dissemination of information to support decision-making and operations within an organization.
Here are some key steps and considerations for developing an MIS strategy:
1) Understand Business Objectives:
Start by aligning the MIS strategy with the overall business strategy and objectives. Identify the critical information needs that support these objectives.
2) Assess Current State:
Evaluate the existing information systems, technologies, and processes. Identify strengths, weaknesses, opportunities, and threats (SWOT analysis).
3) Identify Information Needs:
Determine the type of information required by different levels of management (strategic, tactical, operational) to make informed decisions.
4) Data Collection and Storage:
Define what data is important and how it will be collected, stored, and organized. Consider data quality, security, and privacy.
5) Technology Infrastructure:
Determine the hardware, software, networks, and other technological resources needed to support the MIS. Consider scalability and future-proofing.
6) Integration with Business Processes:
Ensure that the MIS integrates seamlessly with existing business processes and workflows. It should complement and enhance operations.
7) Data Analysis and Reporting:
Define the tools and techniques for data analysis and reporting. This may involve the use of analytics, dashboards, and other reporting mechanisms.
8) Security and Privacy:
Develop robust security measures to protect sensitive information. Implement access controls, encryption, and other security protocols.
9) Compliance and Governance:
Ensure that the MIS complies with relevant industry standards, regulations, and legal requirements. Establish governance structures for oversight.
10) User Training and Support:
Provide training to employees who will use the MIS. Offer ongoing support and resources to help them effectively utilize the system.
11) Monitoring and Evaluation:
Implement metrics and key performance indicators (KPIs) to track the effectiveness of the MIS. Regularly assess its impact on business operations.
12) Adaptability and Scalability:
Plan for the future by designing the MIS to be adaptable to changing business needs and scalable to accommodate growth.
13) Risk Management:
Identify potential risks related to technology failures, data breaches, and other issues. Develop contingency plans and recovery strategies.
15) Communication and Stakeholder Engagement:
Communicate the MIS strategy to all relevant stakeholders, including management, employees, and IT personnel. Foster a culture of collaboration.
15) Continuous Improvement:
Regularly review and update the MIS strategy to incorporate emerging technologies, best practices, and lessons learned from past implementations.
Management Information System Examples
Management Information Systems (MIS) are used across various industries and sectors to support decision-making and streamline operations. Here are some examples of how MIS is utilized in different contexts:
1) Sales and Marketing:
- Customer Relationship Management (CRM) systems track customer interactions, preferences, and sales leads.
- Market research tools provide data on customer demographics, behavior, and market trends.
- Sales dashboards and reports help monitor sales performance and track key metrics.
2) Manufacturing and Operations:
- Enterprise Resource Planning (ERP) systems integrate various functions like production planning, inventory management, and supply chain management.
- Quality Control Systems track and analyze product quality and performance.
- Production scheduling software optimizes manufacturing processes.
3) Finance and Accounting:
- Financial Management Systems track and manage financial transactions, budgets, and forecasts.
- Expense management tools automate the process of tracking and approving expenses.
- Financial reporting systems generate income statements, balance sheets, and cash flow statements.
4) Human Resources:
- Human Resource Information Systems (HRIS) manage employee information, payroll, benefits, and performance evaluations.
- Applicant Tracking Systems (ATS) streamline the recruitment and hiring process.
- Training and development systems track employee training and professional development.
5) Healthcare:
- Electronic Health Records (EHR) systems store patient medical records, treatment plans, and billing information.
- Health Information Exchange (HIE) platforms facilitate the sharing of patient information among healthcare providers.
- Clinical Decision Support Systems (CDSS) provide healthcare professionals with evidence-based treatment recommendations.
6) Education:
- Student Information Systems (SIS) manage student records, class schedules, and grades.
- Learning Management Systems (LMS) support online learning, course materials, and assessments.
- Analytics tools help educational institutions track student performance and engagement.
7) Retail:
- Point of Sale (POS) systems process customer transactions and track inventory levels.
- Inventory Management Systems help monitor stock levels, order new supplies, and prevent overstocking or stockouts.
- Customer Loyalty Programs collect and analyze customer data for targeted marketing efforts.
8) Transportation and Logistics:
- Transportation Management Systems (TMS) optimize the planning and execution of transportation operations.
- Warehouse Management Systems (WMS) control and manage the movement and storage of goods within a warehouse.
- Route optimization software helps in planning efficient delivery routes.
9) Government and Public Sector:
- Geographic Information Systems (GIS) help manage and analyze spatial data for urban planning, emergency response, and more.
- Taxation and Revenue Management Systems process tax payments, refunds, and enforce tax compliance.
- Public Safety Systems support emergency services with dispatch, incident tracking, and reporting.
10) Non-Profit Organizations:
- Donor Management Systems track and manage donor information, contributions, and fundraising efforts.
- Program Evaluation Systems monitor the impact and effectiveness of social programs and initiatives.
Advantages of Management Information System
1)Facilitates planning :
Management Information System provides relevant information for efficient decision making for stop with the increasing size and complexity of organization, managers now work remotely rather than from the operations location. MIS proves to be a big help in such scenarios.
2) Minimizes Information Overload :
MIS help in compartmentalizing data into smaller relevant parts of decision-making. This reduces the confusion of large can organized data.
3) MIS Encourages Decentralization :
MIS enables decentralization of authority. This is possible as there and minority system at lower levels of measuring performance. This helps in making changes in organizational plans and procedures.
4) Brings Co-ordination :
MIS connect all decision making nodes in an organization . it assist in assimilation of specialized activities whereby each department becomes aware of the problems and requirement of other departments . this ensures smooth functioning of an organization.
5) Makes Control Easier :
MIS at as an important tool to relate managerial planning and control. MIS increases the data processing and storage capacity as well as reduces the cost with the help of computer. It enhance the managements capability to evaluate and improve performance.
Disadvantage of Management Information System
1)Highly sensitive, requires constant monitoring:
MIS content highly sensitive information about an organization which can be used for fraudulent activities. Constant monitoring and filtering is required to avoid manipulation of data by fraudster causing harm to business.
2) Budgeting of MIS is Extremely Difficult :
MIS cannot be budgeted like activities of all other department. Hence, its expense is unpredictable. Even though it forms a very sensitive and important function of organization but it is not possible to predict its expense.
3) Quality of Outputs Governed by Quality of Input :
The quality of the information generated through MIS is dependent on the quality of raw data used for processing.
4) Lack of Flexibility to Update Itself :
MIS Cannot update itself automatically like many other application. Updating has to be done manually by obtaining raw data and feeding it into the system for processing and updating pre existing data.
5) Effectiveness Decrease Due to Frequent Changes in Top Management :
Frequent changes in middle or top management levels reduces the effectiveness of information produced through MIS, as requirements of reports are the result of input provided by the top management level . Change in management result in chair changed information requirement because new team of management will require information on their own format.
6) Takes into Account only Qualitative Factors :
MIS takes into consideration only qualitative factors, ignoring the non qualitative factors such as morale, attitude, and motivation of workers. is the biggest limitation of MIS.
Application of MIS in Functional Areas
There are various functions that represent working of a functional area of the business are performed by information systems. Such functional areas are in-house services, manufacturing, marketing etc. Manufacturing Functional business areas include, but are not limited to, are: