MIS is part of an information system, which is a computerized database system that records, stores, and processes information to coordinate, control, analyze, and visualize information in order to implement the right decisions in an organization. In general, this method is used to reinforce the study of people, processes, and technology in the organizational context.
What is MIS – Management Information System?
The full form of MIS is Management Information System. For day-to-day decision making for any organization or product manufacturer there should be some system in place so that the management can take correct and accurate decisions.
Which analyzes business processes, people and information related to them and reaches the right suggestion.
The main objective of the system is to capture information from various sources and gain insights that drive business growth. In fact, it visualizes the way to maximize investment in equipment, employees, and business processes by studying people, technology, organizations, and the relationships between them. Which ultimately helps the organization to get maximum profit.
Why is MIS (Management Information System) needed?
It is a system that collects and analyzes information from different areas to provide the business owner and other decision makers with the guidance they need to make informed decisions for the organization. Including:
- Business information management
- By providing operational inputs to the management personnel to plan, schedule and control, and to fix the control position, it further helps in decision making at the operational function level.
- Informing business decisions. Helps top level management in goal setting, strategic planning and developing business plans and their implementation.
- Business trend analysis
- Checking strategy and scenario. Management information system helps in management control, operational control, transaction processing and strategic planning.
When the manager of any organization wants to make effective decisions, it is necessary to have sufficient information, which is obtained from the Management Information System (MIS). By the way MIS
Decision makers need information to make effective decisions. Management Information Systems (MIS) make this possible. Facilitate communication within and outside the organization. Such as information required for employee day-to-day operations and details of business transactions with customers and suppliers.
Benefits of Management Information System (MIS)
Modern businesses are taking advantage of Management Information Systems (MIS) to manage, organize, and organize mega-data and masses of information generated for various purposes.
Increases efficiency.
Management Information System i.e., MIS helps in achieving a higher level of functionality and efficiency. Although it is only contextual information provided by drafting but using it the organization can prepare a road map for strategy and goals. However, from the details received from MIS, the manager gets all the necessary information to identify the weakness and strength of the organization. And details also make it easier to assess critical performance. Therefore, Management Information System plays an important role in increasing efficiency.
To improve the quality of decisions
In fact MIS (Management Information System) helps in analyzing the situation by providing all relevant information about the current situation to the top management and better availability of information facilitates more rational decision making based on reliable data by reducing uncertainty . However, the amount of supporting information should not be excessive, and the system should provide relevant, accurate, current information for making any decision. Hence the quality of decisions improves.
Promotes better quality of communication.
Whether communication is between departments in a workplace or externally, MIS improves communication. Which helps in developing the work of the internal team. It is natural that when department heads, managers and employees share the same information, there is better communication between them to identify problem areas and find mutually agreeable solutions. Similarly, information can be exchanged effectively and efficiently with external parties in a simple and reliable way.
Forum for Economic Environment
This is a reality, of any product manufacturer or any organization that does business for profit. Who is ultimately interested in the results, how much profit was made. The MIS can simulate various scenarios for the economic environment with various alternatives to present the likely outcome prior to management’s decision making and commitments. Due to which it is easy for the manager to take the right decision in economic matters.
Increases productivity.
MIS provides the manager with such processing information that the manager can control time, errors, and costs. In fact, MIS aggregates all the necessary information by following linear transaction processing. Which does not make unnecessary expenses at the right time – such as personal information obtained from MIS, the manager can increase production by encouraging each employee or by giving other benefits. Employees can be made more productive by any other means, which does not require the manager to spend more time on that.
Analysis of trends
Management information systems provide a platform for the management to prepare forecasts for strategic planning and to set future goals. Because it is easy to get accurate details on the prevailing market trends from MIS. and uses various mathematical tools to assess and analyze current market conditions and predict future trends based on such information. The system helps the organization strengthen its competitive advantage and reduce weaknesses and non-performing areas.
More details about customers
The ultimate goal of every organization is to give satisfaction to the customers and increase business. It can provide more information about the customers from MIS, which can become more familiar with the needs of the customers, ultimately improving the management to focus more on customer service.
Strategic planning
Management information systems help in determining the future needs of the organization. By which the organization fulfills the objective by formulating goals and strategies on the basis of information. The information provided by MIS is accurate and reliable and it is also helpful in identifying the system resource. Thus, this system plays an important role in the strategic planning of the organization.
A management information system is an essential tool for business development, especially for organizations that are serious about improving their performance by improving their management systems.
To be able to compete with the competitors, the need for a good and reliable Management Information System can be fulfilled by the Management Information System.
Without input, the manager of any organization can never make effective decisions by making correct estimates.
It is essential that product areas provide reliable and relevant information to the manager. That’s what a Management Information System does.
Optimizing Business Process
MIS helps businesses optimize business processes, address the information needs of various stakeholders and employees, and make strategic decisions.
- Facilitates planning. MIS improves production processes and field quality by providing relevant information for sound decisions. As organizations grew in size and complexity, managers could have a personal touch with the view of operations.
- To facilitate information. In fact, it reduces information overload, when too much information is presented. The best thing about MIS is that it makes it easy and avoids confusion.
- Encourage Centralization. Decentralization of authority is possible when there is a system in place to monitor operations at lower levels, it is easier to use MIS successfully to measure performance and make necessary changes to organizational plans and procedures.
- Makes it possible to coordinate. It facilitates the integration of specialized activities by making each department of the organization aware of the problems and needs of other departments. It connects all the decision centers of the organization.
However, issues of budget allocation and monitoring can affect the efficacy of the MIS. It has advantages and disadvantages depending on the organizational deployment and usage.
Objective of Management Information System
Data collection
Contextual and operational information data with varying utility of information – easy to collect from various internal and external sources of the organization for decision making and strategy. Probably the Management Information System provides information from all the departments, which can be used for different purposes.
Data processing
Actually, this process is done when the data is collected and translated into usable information. This process is established by a particular group. It is important for data processing to work correctly as not to negatively affect the end product, or data output.
Calculating, summarizing, classifying data, and summarizing information are important processes within this process. Data processing is a vital process by which information is processed into information required for planning, organizing, coordinating, directing, and controlling functionalities at the strategic, tactical, and operational levels.
Information storage
It is a unique and very important process of Management Information System. In fact, this process is a method of operating a computer system, in which information related to a subject is stored for storage and retrieval. This information or information or processed data is stored in such a way that it is easy to access in the future.
Information retrieval
It is an important part of the Management Information System, in which the work of retrieval of stored information is done. To be easily retrieved from storage devices as and when required by the manager or individual users as and when required. Retrieval of information can be done in a number of ways; it can be entered by the user to retrieve part of the data or all the data – query “searching for information by a word”.
Dissemination of information
Some information is such that all the users associated with the object or process should receive necessary information from time to time through the medium of dissemination. For example, if a product completes all its processes in the manufacturer’s area, that is, it becomes a finished product – all departments should get this information immediately, so that they can prepare for that process or the next processes.
A management information system – considered vital for the efficient and effective planning and control functions of management. This system is helpful in providing quick and timely information to the manager. In fact, it is capable of providing information about the “6 M’s” – Man, Machinery, Money, Market, Management and Material. Which is extremely important – for the manager to know what the situation is.
Apart from process – support business process and operations, help in decision making, provides competitive advantage, provides right information at right place, takes care of the needs of managers in the organization, integrates information generated by different departments , identifies a proper mechanism to eliminate redundancy in the data.
It is in fact the mechanism which presents the necessary information to the managers as a source of operational information and prepares them for making their decisions, plays a major role in the decision making of the manager. It can be used as a tool to identify issues facing managers.
Types of Management Information System
- Executive Information System (EIS)
- Management Reporting System (MRS)
- Decision Support System (DSS)
- Transaction Processing Systems (TPS)
- Operational Information System (OIS)
Executive Information System (EIS)
One type of management support system is what is known as an executive information system. In particular, it serves to facilitate and support senior executive information and decision-making needs. Easy access to relevant internal and external information. The system may function for analysis, comparison, description, and performance monitoring.
Management Reporting System (MRS)
The system is used to obtain regular statements to compare past financial performance with the current position. This system examines the drafting of finances and operations at all levels of management – from middle managers to determine financial growth.
Decision Support System (DSS)
In fact, Decision Support System is very important, Decision Support System – provides the management with the results using the results of Management Information System. Of use –
- Inputs to management information systems,
- It becomes the input for the decision support system.
However, decision support systems also receive information from external sources. But management information systems and information from external sources help in semi-structured decision making.
Transaction Processing Systems (TPS)
This type of information system is used to keep the details of daily transactions. Such as records of daily sales, publication of internal goods, etc.
Operational Information System (OIS)
Managers who are concerned with the daily flow of activities and information to monitor operations and get things done use an operations information system. In fact, this system plays an important role in tracking basic activities and basic transactions related to the purpose. Managers who keep track of daily activities such as which goods have been ordered, what is the status of finished goods, how many hours the employees are working, etc.
Characteristics of Management Information System (MIS)
Easy to understand.
Most of the information is in abbreviated form, so it is very important that it can be easily understood. And that information needs to be interpreted in the right way, and management information systems help in that task.
System approach.
Management information system works keeping in mind its purpose, which means that it follows the systems approach by socializing the needs of its formation purpose.
Relevance of information.
It is really very important that the information and information coming from the Management Information System should be relevant to the context of the present circumstances. In the case of special problems, situations may be difficult in that the analysis may differ for different managers or according to particular circumstances. When setting up a management information system, it must be determined which information will be relevant and the human factor must be carefully considered. For example, a management information system can store sales information over the past few years and display sales volume and profit projections to represent different pricing scenarios.
Utility of information.
The information received from the Management Information System is relevant and accurate. If this information is not relevant and accurate, the decisions of the manager are affected. It is only useful if it helps him with those particular decisions. For example, if a manager decides to cut staff, it is natural that there will be cost savings, but the difference in employee performance is more important.
Be management oriented.
While designing the MIS, it must be ensured that the entire system is management oriented, following a “top-down” approach. Which specifically determines the needs of the management as well as the business goals.
Accuracy and reliability of information
An important measure of the effectiveness of an MIS is the accuracy and reliability of its information. The accuracy of the information it uses and the calculations it applies generally determine the effectiveness of the resulting information. However, not all information needs to be equally accurate.
For example, payroll information needs to be accurate, but employee hours spent on a given task can be based on reasonable estimates. The sources of information determine whether the information is reliable or not. Historical performance is often part of the inputs to an MIS, and also serves as a good measure of the accuracy and reliability of its output.
As per requirements
It is imperative that the design of the MIS – and its functions – take into account the needs of managers at all levels. Such as strategic planning, management control and operational control should be according to the information required by the managers, so that the manager can use it to take the right decision.
Timeliness of information
Information must be delivered to the right person at the right time and at the right place. Premature information may become obsolete or be forgotten by the time it is actually needed.
In any organization, information is analyzed on the basis of current information, which are used to make decisions for the future. These decisions will reflect the current reality and accurately estimate their effects on the organization. MIS It should be an important feature that information is flagged for immediate management attention thereby curbing potential errors.
Integration
A Management Information System is considered complete only if it blends all the areas, components and sub-components into an integrated system. Thereby increasing its utility. An integrated system or a combination of all areas in providing relevant information and timely circulation of information from the lower departments also makes it easier for the manager to take the right decision.
General flow of information
The general key characteristic of any management information system should be that it should – simplify operations. And this concept supports many basic ideas of systems analysis such as avoiding duplication, combining similar functions. Extending the flow of common information should be a cost-effective and logical concept.
Information should be brief.
The information available from MIS is very important to be concise. Too much information can become a big burden on the management. Because there is a lot of information, then the right and useful information has to be processed for the manager so that the right decision can be taken. As a result, the importance, accuracy, and reliability of the information received from MIS is reduced or eliminated.
Central database.
It contains data in tabular form. Responsible for the operations like insertion, deletion, updating of the database records. This database covers information related to inventory, personnel, vendors, customers, etc. The data stored in the database.
Long term plan
When a management information system is establish in the business. It should be well ensure, that this system will work with long term plans. It is include as a logical plan to achieve the success of the organization. This information system should take into account the current and future-oriented analysis needs of the organization.
MIS is a computerized system that provides relevant information to management using established quality criteria.
It transforms data into information that is tailored to managers, styles and characteristics.
Using MIS helps in increasing productivity.
In fact, it is a coordinated system, in which many sub-systems are integrated and flexible even though they are comprehensive.