Management Information System
A management
information system (MIS)
provides information that is needed to manage organizations efficiently and
effectively. Management information systems are not only computer systems - these systems encompass
three primary components:
ü
Technology
ü
People (individuals, groups, or organizations),
and
ü
Data/ Information for decision making.
Management information systems are distinct from other information system in that they are designed to be used to analyse
and facilitate strategic and operational activities in the organization.
Academically, the term is commonly used to refer to the study
of how individuals, groups, and
organizations evaluate, design, implement, manage, and utilize systems to
generate information to improve efficiency and effectiveness of decision
making, including systems termed decision support systems, expert systems, and executive
information systems. Most business schools (or colleges of business
administration within universities) have an MIS department, alongside
departments of accounting, finance, management, marketing, and sometimes
others, and grant degrees (at undergrad, masters, and PhD levels) in MIS.
Overview
Early business
computers were used for simple operations such as tracking inventory, billing,
sales, or payroll data, with little detail or structure. Over time, these computer applications became more complex, hardware storage
capacities grew, and technologies improved for connecting previously isolated applications. As more and more data was stored and linked,
managers sought greater detail as well as greater abstraction with the aim of
creating entire management reports from the raw, stored data.
The term
"MIS" arose to describe such applications providing managers with
information about sales, inventories, and other data that would help in
managing the enterprise. Today, the term is used broadly in a number of
contexts and includes (but is not limited to):
Decision
support systems,
Resource and people,
Management applications,
Enterprise
Resource Planning (ERP),
Enterprise
Performance Management (EPM),
Supply
Chain Management (SCM),
Customer
Relationship Management (CRM),
Project
Management and
Database retrieval applications.
A successful MIS
supports a business long range plans, providing reports based upon performance
analysis in areas critical to those plans, with feedback loops that allow for
titivation of every aspect of the enterprise, including recruitment and
training regimens. MIS not only indicates how things are going, but also why
and where performance is failing to meet the plan. These reports include
near-real-time performance of cost centres and projects with detail sufficient
for individual accountability.
History
Kenneth and Jane
Laudon identify five eras of MIS evolution corresponding to five
phases in the development of computing technology:
1) Mainframe and Minicomputer
Computing,
2) Personal Computers,
3) Client/Server
Networks,
4) Enterprise
Computing, and
5) Cloud Computing.
The first
(mainframe and minicomputer) era was
ruled by IBM and their mainframe computers; these computers would often take up
whole rooms and require teams to run them - IBM supplied the hardware and the
software. As technology advanced these computers were able to handle greater
capacities and therefore reduce their cost. Smaller, more affordable
minicomputers allowed larger businesses to run their own computing centres
in-house.
The second
(personal computer) era began
in 1965 as microprocessors started to compete with mainframes and minicomputers
and accelerated the process of decentralizing computing power from large data
centers to smaller offices. In the late 1970s minicomputer technology gave way
to personal computers and relatively low cost computers were becoming mass
market commodities, allowing businesses to provide their employees access to
computing power that ten years before would have cost tens of thousands of
dollars. This proliferation of computers created a ready market for
interconnecting networks and the popularization of the Internet.
As the complexity of
the technology increased and the costs decreased, the need to share information
within an enterprise also grew, giving rise to the third
(client/server) erain which computers on a common network were able to
access shared information on a server. This allowed for large amounts of data
to be accessed by thousands and even millions of people simultaneously.
The fourth
(enterprise) era enabled
by high speed networks, tied all aspects of the business enterprise together
offering rich information access encompassing the complete management
structure.
The fifth
and latest (cloud computing) era of
information systems employs networking technology to deliver applications as
well as data storage independent of the configuration, location or nature of
the hardware. This, along with high speed cell
phone and Wi-Fi networks, led to new levels of
mobility in which managers access the MIS remotely with laptops, tablet PC's,
and smartphones.
Terminology
The terms MIS, Information System, ERP And, Information
Technology Management are often confused.
Information Systems and MIS are broader categories that include ERP. Information Technology Management concerns the operation and organization of
information technology resources independent of their purpose.
Types
Most management information
systems specialize in particular commercial and industrial sectors, aspects of
the enterprise, or management substructure.
§
Management Information Systems (MIS), produce fixed, regularly scheduled
reports based on data extracted and summarized from the firm’s underlying transaction processing systems to middle and operational level managers to identify and
inform structured and semi-structured decision problems.
§
Decision Support Systems (DSS) are computer program
applications used by middle management to compile information from a wide range
of sources to support problem solving and decision making.
§
Executive Information Systems (EIS) is a reporting tool
that provides quick access to summarized reports coming from all company levels
and departments such as accounting, human resources and operations.
§
Marketing Information System are MIS designed specifically for managing the marketing aspects of
the business.
§
Office Automation Systems (OAS) support communication
and productivity in the enterprise by automating work flow and eliminating
bottlenecks. OAS may be implemented at any and all levels of management.
§
School Management Information Systems (MIS) cover school administration, and often including teaching
and learning materials.
Advantages
The following are some of the
benefits that can be attained for different types of management information
systems.
§
Companies are able to highlight their strengths and weaknesses due
to the presence of revenue reports, employees' performance record etc. The
identification of these aspects can help the company improve their business
processes and operations.
§
Giving an overall picture of the company and acting as a
communication and planning tool.
§
The availability of the customer data and feedback can help the
company to align their business processes according to the needs of the
customers. The effective management of customer data can help the company to
perform direct marketing and promotion activities.
§
Information is considered to be an important asset for any company
in the modern competitive world. The consumer buying trends and behaviours can
be predicted by the analysis of sales and revenue reports from each operating
region of the company.
Enterprise applications
§
Enterprise systems, also known as Enterprise Resource
Planning (ERP) systems provide an
organization with integrated software modules and a unified database which
enable efficient planning, managing, and controlling of all core business
processes across multiple locations. Modules of ERP systems may include
finance, accounting, marketing, human resources, production, inventory
management and distribution.
§
Supply Chain Management (SCM) systems enable more
efficient management of the supply chain by integrating the links in a supply
chain. This may include suppliers, manufacturers, wholesalers, retailers and
final customers.
§
Customer Relationship Management (CRM) systems help
businesses manage relationships with potential and current customers and
business partners across marketing, sales, and service.
§
Knowledge Management System (KMS) helps organizations facilitate the collection, recording,
organization, retrieval, and dissemination of knowledge. This may include
documents, accounting records, and unrecorded procedures, practices and skills.
"The actions that are taken
to create an information system that solves an organizational problem are
called systemdevelopment". These include:
System analysis,
System design,
Programming/ Implementation,
Testing,
Conversion,
Production and finally
Maintenance
These actions usually take place
in that specified order but some may need to repeat or be accomplished
concurrently.
Conversion is the process of
changing or converting the old system into the new. This can be done in three
basic ways, though newer methods (Prototyping, Extreme Programming, JAD, etc.)
are replacing these traditional conversion methods in many cases:
§
Direct cutover – The new system replaces the old at an appointed
time.
§
Pilot
study – Introducing the new system to a small portion of the
operation to see how it fares. If good then the new system expands to the rest
of the company.
§
Phased approach – New system is introduced in stages
