Management information system
A management information system (MIS) provides information that organizations require to manage themselves efficiently and effectively.1 Management information systems are typically computer systems used for managing. The five primary components: 1.) Hardware, 2.) Software, 3.) Data (information for decision making), 4.) Procedures (design,development and documentation), and 5.) People (individuals, groups, or organizations). Management information systems are distinct from other information systems because they are used to analyze and facilitate strategic and operational activities.2
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.2 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.
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A MIS gives business managers the information they need to make decisions and solve problems, while facilitating data from different aspects of a project.3 Early business computers were used for simple operations such as tracking inventory, billing, sales, or payroll data, with little detail or structure4 (see EDP). Over time, these computer applications became more complex and previously isolated applications, such as card systems and magnetic storage, became connected in the 1980s and allowed a way to network the information together. With greater computing capability and the networks to link the necessary information, MIS became a standard among many companies.5
Originally, MIS described applications providing managers with information about sales, inventories, and other data that would help in managing the enterprise. Over time, the term broadened to include: decision support systems, resource management and human resource management, enterprise resource planning, enterprise performance management, supply chain management, customer relationship management, project management and database retrieval applications.
An MIS provides three types of information to managers:6
- Detailed, which confirms activities
- Summary, which puts information in an easy-to-read form
- Exception, which deals with all information outside the normal scope of activities
Kenneth C. Laudon and Jane Laudon identify five eras of MIS evolution corresponding to the 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.7
The first era (mainframe and minicomputer) 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 centers in-house.
The second era (personal computer) 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 technological complexity increased and costs decreased, the need to share information within an enterprise also grew—giving rise to the third era (client/server), in which computers on a common network access shared information on a server. This lets thousands and even millions of people access data simultaneously. The fourth era (enterprise) enabled by high speed networks, tied all aspects of the business enterprise together offering rich information access encompassing the complete management structure.Every computer is utilized.
The fifth era (cloud computing) is the latest and 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 cellphone and wifi networks, led to new levels of mobility in which managers access the MIS remotely with laptop and tablet computers, plus smartphones.
The terms Management Information System (MIS), information system, Enterprise Resource Planning (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.
Most management information systems specialize in particular commercial and industrial sectors, aspects of the enterprise, or management substructure.
- Management information systems, produce fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems8 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 and higher management to compile information from a wide range of sources to support problem solving and decision making.DSS is majorly used for semi-structured and unstructured decision problems.
- 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 Systems are Management Information Systems 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 Information Management Systems (SIMS) cover school administration,and often including teaching and learning materials.
- Enterprise Resource Planning facilitates the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.9
The following are some of the benefits that can be attained for different types of MISs.10
- 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 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.
- MISs 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.
- Enterprise systems—also known as enterprise resource planning (ERP) systems—provide integrated software modules and a unified database that personnel use to plan, manage, and control 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.11
- Customer relationship management (CRM) systems help businesses manage relationships with potential and current customers and business partners across marketing, sales, and service.12
- Knowledge management system (KMS) helps organizations facilitate the collection, recording, organization, retrieval, and dissemination of knowledge. This may include documents, accounting records, unrecorded procedures, practices, and skills. Knowledge management (KM) as a system covers the process of knowledge creation and acquisition from internal processes and the external world. The collected knowledge is incorporated in organizational policies and procedures, and then disseminated to the stakeholders.13
"The actions that are taken to create an information system that solves an organizational problem are called system development".14 These include system analysis, system design, computer 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 cut – 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.
- Enterprise Information System
- Bachelor of Computer Information Systems
- Business intelligence
- Business performance management
- Business rule
- Corporate governance of information technology
- Data mining
- Enterprise architecture
- Enterprise planning system
- Management by objectives
- Online analytical processing
- Online office suite
- Real-time Marketing
- O’Brien, J (1999). Management Information Systems – Managing Information Technology in the Internetworked Enterprise. Boston: Irwin McGraw-Hill. ISBN 0-07-112373-3.
- "Social Funds - Management Information Systems". The World Bank. Retrieved 5 March 2014.
- Lucey, Terry (2005). Management Information Systems. London: Thomson. p. 336. ISBN 978-1-84480-126-8.
- "Management Information Systems (MIS)". Inc.com. Retrieved 10 March 2014.
- "Types of Information Systems". UNC Charlotte. Retrieved 5 March 2014.
- Laudon, Kenneth C.; Laudon, Jane P. (2009). Management Information Systems: Managing the Digital Firm (11 ed.). Prentice Hall/CourseSmart. p. 164.
- Transaction processing systems (TPS) collect and record the routine transactions of an organization. Examples of such systems are sales order entry, hotel reservations, payroll, employee record keeping, and shipping.
- Bidgoli, Hossein, (2004). The Internet Encyclopedia, Volume 1, John Wiley & Sons, Inc. p. 707.
- Pant, S., Hsu, C., (1995), Strategic Information Systems Planning: A Review, Information Resources Management Association International Conference, May 21–24, Atlanta.
- Taylor, Victoria. "Supply Chain Management: The Next Big Thing?". Sept. 12, 2011. Business Week. Retrieved 5 March 2014.
- Lynn, Samara. "What is CRM?". PC Mag. Retrieved 5 March 2014.
- Joshi, Girdhar (2013). Management Information Systems. New Delhi: Oxford University Press. p. 328. ISBN 9780198080992.
- Laudon, K.,&Laudon, J. (2010). Management information systems: Managing the digital firm. (11th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
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Management information system