Management Information System refers broadly to a computer-based system that provides managers with the tools for organizing, evaluating and efficiently running their departments. In order to provide past, present and prediction information, an MIS can include software that helps in decision making, data resources such as databases, the hardware resources of a system, decision support systems, people management and project management applications, and any computerized processes that enable the department to run efficiently.
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.
1. 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.
2. 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 analyzed 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 come 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.
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.
1. 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.
2. 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 analyzed 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 come 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.
LMIS
Information Systems Leadership is a continuing information systems innovation meeting customers’ needs. This implies not only creativity in developing new information systems and enhancing existing ones, but also astute market knowledge to ensure that they sell. The strategy involves delivering a continuous stream of new information systems and/or services, where what is new is valued by the customers. The rapid gain of market acceptance and market share were due not only to the innovative information systems itself but to new systems to control the manufacturing and distribution of the information systems, which is more akin to fast-moving consumables than traditional eye-care information systems. 3M has traditionally followed an information systems leadership strategy in the adhesives and coating market, and the story of Post-it notepads is now legendary—how a ‘failed’ new adhesive became the basis for a best-selling information systems—what would we do without it?
The management of ‘demand’ and ‘supply’ and achieving balance between both is complex. The previous section illustrated that the debate is generally portrayed as alternating between centralization and decentralization. However, the ‘middle ground’ has become an appealing alternative. Von Simson, for example, subscribes to an IS functional design with IS/IT roles played by both a central IS function and the business units and prescribes a ‘centrally decentralized’ IS function with strong dotted-line reporting relationships. He argues that clear structures and distinct roles and responsibilities must be defined with a mix of centralized and decentralized resources. Otherwise, confusion, conflict, duplication of effort and/or inadequate systems integrity will occur. In a similar vein, the federal structure is often seen as capturing the benefits of both centralization and decentralization. With such a structure, business units receive a responsive service from decentralized IS functions, while at the same time a corporate IS function provides groupwide IT services and exerts some degree of central leadership and control of IT activities. While intellectually appealing, little guidance can be found as to what these decision areas are and how to make it work. The key questions are what aspects of IS/IT are best managed centrally and which are best devolved—degree of diffusion in Sullivan’s terms— and whether IS/IT activities are managed by a specialist IS function at all or should they be managed by business management themselves.
IT leadership, which includes IT envisioning, fusing IT strategy with business strategy, and managing IS resources. The leadership exhibited by the information officer is a key aspect in achieving success with IS. Two components of leadership of critical importance for the information officer are:
1. Ability to create a set of value expectations shared across all areas of the business—one sensitive to the realities of competency, competition and culture.
2. Ability to deliver on those expectations measurably information officers must understand and express IT’s value in a way that’s meaningful to all executives.
Success in improving the contribution of IS/IT is initially premised on having strong IS leadership within the IS function and the importance of the IS Director/CIO having credibility within the business. The data from this research highlighted the importance of first getting the basics right—network uptime, availability and reliability of applications, help-desk response times, etc. Leadership by example appears to be key in achieving a truly open knowledge environment. As an emerging topic of study within the field of IS, we have much to learn about how knowledge can be effectively ‘managed’ before we can understand how best to deploy IT to improve the processes involved.
The management of ‘demand’ and ‘supply’ and achieving balance between both is complex. The previous section illustrated that the debate is generally portrayed as alternating between centralization and decentralization. However, the ‘middle ground’ has become an appealing alternative. Von Simson, for example, subscribes to an IS functional design with IS/IT roles played by both a central IS function and the business units and prescribes a ‘centrally decentralized’ IS function with strong dotted-line reporting relationships. He argues that clear structures and distinct roles and responsibilities must be defined with a mix of centralized and decentralized resources. Otherwise, confusion, conflict, duplication of effort and/or inadequate systems integrity will occur. In a similar vein, the federal structure is often seen as capturing the benefits of both centralization and decentralization. With such a structure, business units receive a responsive service from decentralized IS functions, while at the same time a corporate IS function provides groupwide IT services and exerts some degree of central leadership and control of IT activities. While intellectually appealing, little guidance can be found as to what these decision areas are and how to make it work. The key questions are what aspects of IS/IT are best managed centrally and which are best devolved—degree of diffusion in Sullivan’s terms— and whether IS/IT activities are managed by a specialist IS function at all or should they be managed by business management themselves.
IT leadership, which includes IT envisioning, fusing IT strategy with business strategy, and managing IS resources. The leadership exhibited by the information officer is a key aspect in achieving success with IS. Two components of leadership of critical importance for the information officer are:
1. Ability to create a set of value expectations shared across all areas of the business—one sensitive to the realities of competency, competition and culture.
2. Ability to deliver on those expectations measurably information officers must understand and express IT’s value in a way that’s meaningful to all executives.
Success in improving the contribution of IS/IT is initially premised on having strong IS leadership within the IS function and the importance of the IS Director/CIO having credibility within the business. The data from this research highlighted the importance of first getting the basics right—network uptime, availability and reliability of applications, help-desk response times, etc. Leadership by example appears to be key in achieving a truly open knowledge environment. As an emerging topic of study within the field of IS, we have much to learn about how knowledge can be effectively ‘managed’ before we can understand how best to deploy IT to improve the processes involved.
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