Management Information System

MANAGEMENT INFORMATION SYSTEM

Management Information System (MIS) is a subset of the overall internal controls of a business covering the application of people, documents, technologies, and procedures by management accountants to solving business problems such as costing a product, service or a business-wide strategy. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. It refer to the group of information management methods tied to the automation or support of human decision making, e.g., Decision Support Systems, Expert systems, and Executive information systems.

‘MIS’ is a planned system of collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management.

The system provides information on the past, present and project future and on relevant events inside and outside the organization. It may be defined as a planned and integrated system for gathering relevant data, converting it in to right information and supplying the same to the concerned executives. The main purpose of MIS is to provide the right information to the right people at the right time.

The Concept of management information systems originated in the 1960s. During the early 1960s, it became evident that the computer was being applied to the solution of business problem in a piecemeal fashion, focussing almost entirely on the computerization of clerical and record – keeping tasks. The concepts of management information systems were developed to counteract such in efficient development and in effective use of the computer. The MIS concepts is vital to efficient and effective computer use in business of two major reasons :

It serves as a systems framework for organizing business computer applications. Business applications of computers should be viewed as interrelated and integrated computer – based information systems and not as independent data processing job .

In emphasizes the management orientation of electronics information processing in business. The primary goal of computer based information systems should be the processing of data generated by business operations.

A management information system is an integrated man – machine systems that provides information to support the planning and control function of manager in an organization.

The output of an MIS is information that sub serves managerial functions. When a system provides information to persons who are not managers, then it will not be considered as part of an MIS. For example, an organization often processes a lot of data which it is required by law to furnish to various government regulatory agencies. Such a system, while it may have interfaces with an MIS, would not be a part of it, Instances of such systems is salary disclosures and excise duty statements. By the same token to sophisticated computer – aided design system for engineering purposes would also not be a part of an MIS.

Generally, MIS deals with information that is systematically and routinely collected in accordance with a well-defined set of rules. Thus, MIS is a part of the formal information network in an organization. Information that has major managerial planning significance is sometimes collected at golf courses. Such information is not part of MIS, how ever, one- shot market research data collected to gauge the potential of a new product does not come with in the scope of an MIS by our definition because although such information may be very systematically collected it is not collected on a regular basis.

Normally, the information provided by an MIS helps the managers to make planning and control decisions. Now, we will see, what is planning and control. Every organization in order to function must perform certain operations. For Example, a car manufacturer has to perform certain manufacturing activities, a wholesaler has o provide water to its area of jurisdiction. All these are operations that need to be done. Besides, these operations, an organization must make plans for them. In other words, it must decide on how many and what type of cars to make next month or what commissions to offer retailers or what pumping stations to install in the next five years. •

Generally, MIS is concerned with planning and control. Often there are elaborate systems for information that assists operations. For example, the car manufacturer will have a system for providing information to the workers on the shop floor about the job that needs to be done on a particular batch of material. There may be route sheets, which accompany the rate materials and components in their movement through various machines. This system per se provides only information to support operation. It has no managerial decision-making significance. It I not part of an MIS. If, however, the system does provided information on productivity, machine utilization or rejection rates, then we would say that the system is part of an MIS.

Generally, MIS has all the ingredients that are employed in providing information support to manager to making planning and control decisions. Managers often use historical data on an organization’s activities as well as current status data make planning and control decisions. Such data comes from a database which is contained in files maintained by the organization . This database is an essential component of an MIS. Manual procedures that are used to collect and process information and computer hardware are obvious ingredients of an MIS . These also form part of the MIS. In summary, when we say that “an MIS is an integrated man – machine systems that provided information to supports the planning and control function of managers in an origination.”

It does the following function .

— sub serves managerial function

— collects stores, evaluates information systematically and routinely

  • supports planning and control decisions
  • Includes files, hardware, software, software and operations research models.

Advantages of MIS

An MIS provides the following advantages :

  1. It Facilitates planning : MIS improves the quality of plan by providing relevant information for sound decision – making . Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations.
  2. In Minimizes information overload : MIS change the larger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts.
  3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures.
  4. It brings Co-ordination : MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization .
  5. It makes control easier : MIS serves as a link between managerial planning and It improves the ability of management to evaluate and improve performance . The used computers has increased the data processing and storage capabilities and reduced the cost
  6. MIS assembles, process, stores, Retrieves, evaluates and Disseminates the information.

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