Management Information System (MIS) is automated information-processing system developed to support the activities and functions of company management on all levels.
“The main purpose of the MIS is to give managers feedback about their own performance; top management can monitor the company as a whole. Information displayed by the MIS typically shows “actual” data over against “planned” results and results from a year before;
The MIS receives data from company units and functions. Some of the data are collected automatically from computer-linked check-out counters; others are keyed in at periodic intervals. Routine reports are pre-programmed and run at intervals or on demand while others are obtained using built-in query languages; display functions built into the system are used by managers to check on status at desk-side computers connected to the MIS by networks. Many sophisticated systems also monitor and display the performance of the company’s stock.”
“Companies are getting great benefits from MIS. They are able to identify their strengths and weaknesses due to presence of various different reports. Companies can improve its processes and operations. With MIS Companies can get overall picture of the company and its performance. “MIS can help a company gain a competitive advantage. Competitive advantage is a firm’s ability to do something better, faster, cheaper, or uniquely, when compared with rival firms in the market.”
“The use of Management Information Systems (MIS) has gone from competitive advantage for few to business necessity for all. The true advantages of information technology (IT) come in the forms of efficiency and effectiveness of the gathered information.”
“Information is the starting point for MIS, which is the analysis of collected raw data”
“Though technology receives most of the credit, managers play an intricate role when dealing with MIS. Their literacy in both technology and information determine how effective strategies will be when implemented. A technology-literate manager will know how and when to apply technology, meaning that she will know what to purchase to execute certain processes and the most appropriate time to make the purchase. An information-literate manager is able to define what information is needed and how to access it, can convert it from information to business intelligence, and can make the best decision based on the information.”
Levels of Management decision making
Managers on all the levels of the company have to make informed decisions on behalf of a company. The difference between decision making vary depending on what level that decision has to be made.
There are 3 levels of management decision making in the company:
- Operational level that makes decisions on day-to-day business processes and daily operations. They interact directly with employees and customers. Operational management is using information systems to automate repetitive tasks and improve efficiency. Main characteristics of their decisions are that are structured and recurring and can be easily automated.
- Managerial level is area where functional managers or midlevel managers are making decisions. They monitor and control operational-level activities, provide information to executive level. Their main focus is on effectively utilising and deploying resources and their goal is achieving strategic objectives. Midlevel managers decisions are semi-structured, contained within business function and moderately complex.
- Executive level represents the President, CEO, Vice presidents, Board of directors. They make long-term strategic decisions for complex and non-routine issues. Their decisions are unstructured.
Types of Information Systems
Depending on their level in organization managers are using different types of Information Systems:
- Transaction Processing System (TPS) – serve operational managers and staff to perform and record daily routine transactions necessary to conduct business. TPS allow managers to monitor status of operations and relations with external environment. Also it serve predefined, structured goals and decision making. The data is very detailed at this level. The best TPS will be integrated throughout the organisation to supply useful information to those who need it when they need it.
- Management Information Systems (MIS) – serve middle management. MIS is designed to produce information on a periodic basis. Provide reports on firm’s current performance, based on data from TPS. As well, provide answers to routine questions with predefined procedure for answering them. Typically have little analytic capability.
- Decision Support Systems (DSS) – serve middle management. DSS support non-routine decision making (What-if analyses) and analyse results for hypothetical changes. It may use external information as well as internal TPS / MIS data.
- Executive Information Systems (EIS) – support senior management. EIS address non-routine decisions by requiring judgment, evaluation, and insight. Also incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS.