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Definition: Management Information Systems (MIS) is the term given to the discipline focused on the integration of computer systems with the aims and objectives on an organisation. The development and management of information technology tools assists executives and the general workforce in performing any tasks related to the processing of information. MIS and business systems are especially useful in the collation of business data and the production of reports to be used as tools for decision making. Applications of MIS With computers being as ubiquitous as they are today, there's hardly any large business that does not rely extensively on their IT systems. However, there are several specific fields in which MIS has become invaluable. * Strategy Support While computers cannot create business strategies by themselves they can assist management in understanding the effects of their strategies, and help enable effective decision-making. MIS systems can be used to transform data into information useful for decision making. Computers can provide financial statements and performance reports to assist in the planning, monitoring and implementation of strategy. MIS systems provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually. MIS systems can also use these raw data to run simulations – hypothetical scenarios that answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product. These Decision Support Systems (DSS) enable more informed decision making within an enterprise than would be possible without MIS systems. * Data Processing Not only do MIS systems allow for the collation of vast amounts of business data, but they also provide a valuable time saving benefit to the workforce. Where
in the past business information had to be manually processed for filing and analysis it can now be entered quickly and easily onto a computer by a data processor, allowing for faster decision making and quicker reflexes for the enterprise as a whole. Management by Objectives While MIS systems are extremely useful in generating statistical reports and data analysis they can also be of use as a Management by Objectives (MBO) tool. MBO is a management process by which managers and subordinates agree upon a series of objectives for the subordinate to attempt to achieve within a set time frame. Objectives are set using the SMART ratio: that is, objectives should be Specific, Measurable, Agreed, Realistic and Time-Specific. The aim of these objectives is to provide a set of key performance indicators by which an enterprise can judge the performance of an employee or project. The success of any MBO objective depends upon the continuous tracking of progress. In tracking this performance it can be extremely useful to make use of an MIS system. Since all SMART objectives are by definition measurable they can be tracked through the generation of management reports to be analysed by decision-makers. Benefits of MIS The field of MIS can deliver a great many benefits to enterprises in every industry. Expert organisations such as the Institute of MIS along with peer reviewed journals such as MIS Quarterly continue to find and report new ways to use MIS to achieve business objectives. Core Competencies Every market leading enterprise will have at least one core competency – that is, a function they perform better than their competition. By building an exceptional management information system into the enterprise it is possible to push out ahead of the competition. MIS systems provide the tools necessary to gain a better understanding of the market as well as a better understanding of the enterprise itself. Enhance Supply Chain Management Improved reporting of business processes leads inevitably to a more streamlined production process. With better information on the production process comes the ability to improve the management of the supply chain, including everything from the sourcing of materials to the manufacturing and distribution of the finished product. Quick Reflexes
As a corollary to improved supply chain management comes an improved ability to react to changes in the market. Better MIS systems enable an enterprise to react more quickly to their environment, enabling them to push out ahead of the competition and produce a better service and a larger piece of the pie. Further information about MIS can be found at the Bentley College Journal of MIS and the US Treasury’s MIS handbook, and an example of an organisational MIS division can be found at the Department of Social Services for the state of Connecticut.
Role and Importance of MIS
Overview Role of Management Information Systems at Different Organizational Levels Role of MIS in Society Role of MIS in Government Using Information System as a Cost Reduction Measure Financial Planning and Budgeting Logistics and Materials Management
Today it is widely recognized that information systems knowledge is essential for managers because most organizations need information systems to survive and prosper. Information systems can help companies extend their reach to faraway locations, offer new products and services, reshape jobs and work flows, and perhaps profoundly change the way they conduct business.
Role of Management Information Systems at Different Organizational Levels
Individuals in organizations are supported by different types of information systems, depending on the roles and the tasks they perform:
Strategic decisions are usually made by top management; these are relatively long-term planning decisions that deal with the organization’s objectives as a whole and allocation of resources to achieve these objectives. Top management may rely on executive information systems for some of their decision making and forecasting. Tactical or managerial decisions are made by middle managers, who prepare short-term plans, procedures, and policies with which to begin implementing the organizations longterm strategies. MISs provide the primary support at this level, along with some types of DSS. (Operational decisions) are made by line managers and operators. These are (the day-to-day decisions that aim to keep the organizations operations moving smoothly,) TPSs typically capture the operational information relevant for decision making at this level.
Role, characteristics and goal of an efficient MIS in an organisation can be summarized in the following statements:
Information primarily geared to assist managerial decisional process and control. Information communication based on relevancy with respect to diverse needs of management at different levels. Timeliness of information (delayed information may be contrived or obsolete and therefore useless for decision making process). Information flow based on system approach linking diverse activities of diverse departments within an organisation to exchange information. This approach obliterates data redundancy and inculcates efficient and cost effective usage of data storage . Flexibility in information system to incorporate future requirements of management on need basis.
The need for computerized MIS assumes significance due to the following factors:
In the absence of a computerized MIS, an organisation fails to meet its commitments persistently because of inappropriate and delayed information that results in inappropriate decisions. Manual information systems are difficult to be maintained and result in tedious paper work, non productive overtime costs in respect of clerical staff, backlogs and disjointedness in information flows. Manual information deter the organisation to accouter itself for the current/future competition, diversification and/or expansion strategic plans because the management is engrossed in finding solutions to ever increasing operational problems. Major advantage of MIS in an organisation is improvement in management process with decisions based on facts rather than subjective approach or bureaucratic procedures. Benefits of MIS may not be quantified in terms of monetary gains but be explored radically.
An efficient MIS obliterates the over dependency or indispensability of expertise of any particular executive in an organisation. The unfair emphasis on procedures resulting in delayed and not always appropriate decisions is overridden by ready and mostly appropriate decisions. MIS supplants management by activity with management by results. The result orientation of management process results in swift accomplishment of management goals. Major impact of an efficient MIS is being felt on traditional pyramid cal structure of an organisation. This structure is flattening into a two tier system of analytical and operational levels.
Role of MIS in Society
Man is essentially a social animal and gains his basic sense of identity through relationship with others. Management is only effective to the extent it can mobilize and rely on these social relationships. Issues of leadership and group behaviour are therefore paramount. Mayo and the other early workers studied the role of individuals, informal groups, inter-group relationships and the formal relationships within the society. They developed a number of concepts of which the following are the most important: (a) People are not only motivated by financial factors but by a variety of social and psychological factors as well.
(b) An organization is a social system as well as a technical/economic system. (c) Informal work-group have important roles in determining the attitudes and performance of individuals.
(d) Participation in work organization, planning and policy formulation. This meant establishing effective communications between the various levels in the hierarchy to ensure a free flow of information. In a society, an Information System helps in the following ways: 1. (An Information System helps a society to look forward to mark the opportunities from the social environment and deciding upon the specific mission of a society vis-à-vis the capabilities of the society and the needs of the social environment.) Revamping the social structure for attainment of fundamental goals of the society. Maintaining and managing responsibility towards all social segments. Coping with and augmenting technological sophistication pragmatically and growing public criticism and political hindrances ethically and tactically. Coping with the ripened aspirations of the people.
2. 3. 4. 5.
Maintaining and managing the cordial relationships with the social segments viz. labour markets, recruitment agencies, suppliers, technologies and services, banks and financial institutions, franchisees, statutory auditors, Government, employees, customers, the press and other advertising and news propagating media.
Role of MIS in Government
MIS plays a vital role in Government organizations also. Some of the important roles of MIS in Government organization are: 1. 2. 3. 4. MIS supports decision making by Government officials. Employment system is controlled by MIS. The candidates are categorized according to their qualification and experience. National Budgeting is highly supported by MIS. Any social or financial activity, initiated by government organization requires MIS support for its economic and financial planning.
Using Information System as a Cost Reduction Measure
Businesses are not in the business of processing information for its own sake. Instead they process information in order to improve organizational performance and produce profits. (From a business perspective, an information system is an important instrument for creating value for the organization.) There are many ways in which information systems can contribute to firm value, including:
increasing the firm’s return on its investments (ROI). enhancing the company’s strategic position. increasing the market value of firm’s stock.
Information processing activities support management decision making, enhance the execution of business processes and as a result increase business value.
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