Management Information System and its benefits in an Organisation

Management Information Systems

Abdul Hassan
Mar 11, 2018 · 5 min read

Management information systems are those systems that allow managers to make decisions on successful operations of business. MIS refers broadly to a computer-based system that provides manager with the tools for organizing, evaluating and efficiently running their departments. To provide past, present, future information an MIS can include software that helps in decision making, data resources such as databases, the hardware resources of a system, decision support system, people management and project management applications and any computerized processes that enable the department to run efficiently.

Though there a number if definitions, all of them coverage on one single point, the MIS is a system to support the decision-making function in the organization. In today’s word MIS is a computerized business processing system generating information for the people in the organization to meet the information needs decision making to achieve the corporate objective of the organization.

Manual adding of data can lead to human error as such, as the data has to be collected from various department and sources. Hence in order to get a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points.

  1. Handling of voluminous data
  2. Confirmation of the validity of data and transaction
  3. Complex processing of data and multidimensional analysis
  4. Quick search and retrieval
  5. Mass storage
  6. Communication of the information system to the user on time
  7. Fulfilling the changing needs of the information

The management information system uses computer and communication technology to deal with these points of supreme importance.

Functions of Management Information System:

1. To process transactions: Information system process transactions, where transactions maybe be defined as an activity taking place in an organisation. For example, making a purchase or sale or manufacturing a product, it be within the organisation or external in nature.

2. To update maintain a master file: Information system creates and maintains a master file in an organization. A master file stores permanent or historical data about organizational entities. For Example, data processing to prepare employee salary requires data items for the employee basic pay, allowances, deductions etc.

3. To produce reports: Reports are the significant products of an information system. Many reports are produced on a regular basis, which are called scheduled reports. An information system also produces reports on adhoc requests. These are known as special or adhoc requests.

4. To process enquiries: An information system is used to process enquiries. For processing such queries the information system uses its database.

5. To process interactive support applications: The information system contains application designed to support systems for planning, analysing and decision making. Various type of models are used for such type of applications.

Components of Information Management System:
A computer(-based) information system is essentially an IS using computer technology to carry out some or all of its planned tasks. The basic components of computer-based information systems are:

  1. Hardware- these are the devices like the monitor, processor, printer and keyboard, all of which work together to accept, process, show data and information.
  2. Software- are the programs that allow the hardware to process the data.
  3. Databases- are the gathering of associated files or tables containing related data.
  4. Networks- are a connecting system that allows diverse computers to distribute resources.

Procedures- are the commands for combining the components above to process information and produce the preferred output.

Hierarchy for IMS developed in 1980’s although it has changed in current time

Types of Information System:

As more and more business functions have been automated, information systems have become increasingly specialised. These systems can either perform alone or can be combined to create a larger system that performs different functions for different people.

  1. Office Information System: It is an information system that uses hardware, software and networks to enhance workflow and facilitate communication among employees. It supports a range of business office activities such as creating and distributing graphics, documents, sending messages, scheduling and accounting. All levels of users in a management can benefit and use the OIS
  2. Transaction Process System: These are information system that captures and processes data generated during an organization’s day to day transactions. They are business activity such as deposit, payment, order or reservations.
  3. Management Information System: It is a system that generates accurate, timely and organised information so managers and other users can make decisions, solve problems, supervise activities and track progress. Because it generates reports on a daily basis, a management information system sometime is called a management reporting system.
  4. Decision Support Systems: Decision support systems are information designed to help users reach a decisions when a decision making situation arises. A decision support system can use data from internal or external sources. Internal sources of data might include sales, manufacturing, inventory or financial data from an organization’s database. External source of data include interest rates, population trends, cost of new house constructions. For Example, to set the yearly sales quotes a manager can use the Decision support system to provide information support for factors which would effect internally and externally.
  5. Executive Information Systems: These are designed to support the information needs for executive managers. Information is presented in form of charts, tables
  6. Expert Systems: Expert systems is an information system that captures and stores the knowledge of human expert and then imitates human reasoning and decision making process for those who have less expertise.
    AI is part of expert systems, which taken in your past behaviour experience, sense your actions and based on logical assumptions will take appropriate actions to complete the task.
Application of Information System

Also Read : Does Your Business Need a Mobile App

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