Management Information Systems (MIS)
Management Information Systems (MIS)
A Management Information System, or MIS, is a piece of software that collects data from a range of sources and turns it into to enable them to make decisions. A company usually has some managers who are responsible for the day-to-day running of a business. They need to make sure that there is enough stock, that the staff are well-trained and that the paperwork in the business is up-to-date, for example. There are also the strategic managers. Strategic managers are responsible for planning the direction the business will take, forecasting what will happen in the future, controlling the costs of the business, marketing the business and the products that they sell, ensuring that resources are sufficient for the business to be successful, to name but a few. Strategic managers may be at an area level or a national level or even an international level. Each type of manager, however, whether they are involved in the day-to-day management of a shop or are a strategic manager, has their own particular information needs that must be satisfied to enable them to carry out their job effectively. An MIS seeks to satisfy all of their individual information needs.
Different layers of management have different information needs
Consider a mobile phone chain of shops. Each shop will have a manager. Each shop manager needs to know how many of each type of phone they have in the stockroom. They need to know how many they sold last week, how much money they took in, who the best salesperson was and when to re-order (often done automatically) for example. In other words, each shop manager needs to have information relating to the operations within their own particular shop. An area manager, however, will not need to know the detail of what is happening in each shop. They will be concerned with summary financial information, to get an overall picture of sales in their area. They might want to know how much money each shop in their area took in last week in comparison to the target sales for that shop. The strategic managers at the head office will want summaries of each area. The financial manager will want financial summaries. The personnel manager will want summaries of the numbers of staff, the hours each worked, the cost of overtime and the like. The marketing manager will want specific information about one type of product that they have been heavily promoting. They may also want to see some graphs that compare their prices to their competitors over the last week. The sales manager may want to see a breakdown of total sales by salesperson or by product.
Different managers have different information needs.
Each manager, then, has their own information needs. An MIS seeks to meet those needs by doing a number of things:
-
- It will provide reliable information. If information given out by any system proves unreliable, managers will quickly abandon it. Once a system has lost the confidence of the people it is supposed to serve, it is very difficult to regain their trust.
- An MIS will provide up-to-date information. Information has a 'shelf-life'. It's usefulness soon lapses with time. It can quickly be given the label of 'historical data' and be of limited use to managers trying to effectively run a business.
- A good MIS will give the manager the information they need. Too little information and they won't have all of the facts upon which to make business decisions. Too much information, however, and they may not be able to find the facts they need. An MIS that gives a manager the information they need will potentially improve the quality of the manager's decision-making!
- A good MIS will not only give a manager the right amount of reliable and up-to-date information. It will also present the data in a way that is best for that user. This may involve giving the manager a graph, a table of results or a written description, for example.
- An MIS should be able to provide knowledge that previously took time to collect using other methods. This means that a manager could have more time to allocate to other activities, such as customer care or looking after their staff.
- An MIS should be able to better illustrate trends in areas of business. This should help with any future planning that needs to take place.
- Ultimately, an MIS should help a company to become more profitable and to give it an edge over all of their competitors. An MIS is not a data processing system. A data processing system takes raw data and processes it into a regular and well-defined form. It is not rearranged into different forms for different managers so that they can make better decisions.
Examples of data processing systems include:
-
- Processing monthly bank statements for customers.
- Processing employee payslips.
- Producing a list of supermarket items that must be reordered.
- Producing a list of people who have not paid their annual subscription to a club.
- Producing a list of pupils in a class.
Examples of the output from an MIS include:
-
- A report showing the prices charged for flights to New York by competitors.
- A report showing how many mobile phones were sold in each shop in a chain.
- A report showing how profits varied each month over the last year.
- A report detailing the overtime worked in each supermarket in a chain of supermarkets.
- A report showing how many customers each till operator dealt with in a shift.