A 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. Academically, the term is commonly used to 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.
At the start, in businesses and
other organizations, internal reporting was made manually and only
periodically, as a by-product of the accounting system and with some additional
statistics, and gave limited and delayed information on management performance.
In their infancy, business computers were used for the practical business of
computing the payroll and keeping track of accounts payable and accounts
receivable. As applications were developed that provided managers with
information about sales, inventories, and other data that would help in
managing the enterprise, the term "MIS" arose to describe these kinds
of applications. Today, the term is used broadly in a number of contexts and
includes (but is not limited to): decision support systems, resource and people
management applications, project management and database retrieval application.
Definition
An
'MIS' is a planned system of the collecting, processing, storing and
disseminating data in the form of information needed to carry out the functions
of management. According to Philip Kotler "A marketing information system
consists of people, equipment, and procedures to gather, sort, analyze,
evaluate, and distribute needed, timely, and accurate information to marketing
decision makers." The terms MIS and information system are often confused.
Information systems include systems that are not intended for decision making.
The area of study called MIS is sometimes referred to, in a restrictive sense,
as information technology management. That area of study should not be confused
with computer science. IT service management is a practitioner-focused discipline.
MIS has also some differences with Enterprise Resource Planning (ERP) as ERP
incorporates elements that are not necessarily focused on decision support.
Before one can explain management information systems, the terms systems,
information, and management must briefly be defined. A system is a combination
or arrangement of parts to form an integrated whole. A system includes an
orderly arrangement according to some common principles or rules. A system is a
plan or method of doing something. The study of systems is not new. The
Egyptian architects who built the pyramids relied on a system of measurements
for construction of the pyramids. Phoenician astronomers studied the system of
the stars and predicted future star positions. The development of a set of
standards and procedures, or even a theory of the universe, is as old as
history itself. People have always sought to find relationships for what is
seen or heard or thought about. A system is a scientific method of inquiry,
that is, observation, the formulation of an idea, the testing of that idea, and
the application of the results. The scientific method of problem solving is
systems analysis in its broadest sense. Data are facts and figures. However,
data have no value until they are compiled into a system and can provide
information for decision making.
Information is what is used in the
act of informing or the state of being informed. Information includes knowledge
acquired by some means. In the 1960s and 70s, it became necessary to formalize
an educational approach to systems for business so that individuals and work
groups and businesses who crossed boundaries in the various operations of
business could have appropriate information. Technical developments in
computers and data processing and new theories of systems analysis made it
possible to computerize systems. Much of this computerization of systems was an
out growth of basic research by the federal government. Management is usually
defined as planning, organizing, directing, and controlling the business
operation. This definition, which evolved from the work of Henri Fayol in the
early 1900s, defines what a manager does, but it is probably more appropriate
to define what management is rather than what management does. Management is
the process of allocating an organization's inputs, including human and
economic resources, by planning, organizing, directing, and controlling for the
purpose of producing goods or services desired by customers so that
organizational objectives are accomplished. If management has knowledge of the
planning, organizing, directing, and controlling of the business, its decisions
can be made on the basis of facts, and decisions are more accurate and timely
as a result. Management information systems are those systems that allow
managers to make decisions for the successful operation of businesses.
Management information systems consist of computer resources, people, and
procedures used in the modern business enterprise. The term MIS stands for
management information systems. MIS also refers to the organization that
develops and maintains most or all of the computer systems in the enterprise so
that managers can make decisions. The goal of the MIS organization is to
deliver information systems to the various levels of corporate managers. MIS
professionals create and support the computer system throughout the company.
Trained and educated to work with corporate computer systems, these
professionals are responsible in some way for nearly all of the computers, from
the largest mainframe to the desktop and portable PCs. Background Management
information systems do not have to be computerized, but with today's large,
multinational corporations, computerization is a must for a business to be
successful. However, management information systems began with simple manual
systems such as customer databases on index cards. As early as 1642, the French
mathematician and philosopher Blaise Pascal invented the first mechanical
adding machine so that figures could be added to provide information. Almost
two hundred years later, Charles Babbage, a professor of mathematics at
Cambridge University in England, wanted to make a machine that would compute
mathematical tables. He attempted to build a computing machine during the
1880s. He failed because his ideas were beyond his technical capabilities, not
because the idea was flawed. Babbage is often called the father of the
computer. With the advent of the computer, management information systems
became automated. In the late 1890s, because of the efforts of Herman
Hollerith, who created a punch-card system to tabulate the data for the 1890
census, it was possible to begin to provide data-processing equipment. The
punch card developed by Hollerith was later used to form a company to provide
data-processing equipment. This company evolved into International Business
Machines (IBM). Mainframe computers were used for management information
systems from the 1940s, 50s, 60s, and up until the 1970s. In the 1970s,
personal computers were first built by hobbyists. Then Apple computer developed
one of the first practical personal computers. In the early 1980s, IBM
developed its PC, and since then, the personal computer industry has mush
roomed. Almost every management information system revolves around some kind of
computer hardware and software. Management information systems are be coming
more important, and MIS personnel are more visible than in the 1960s and 1970s,
when they were hidden away from the rest of the company and performed tasks
behind closed doors. So remote were some MIS personnel from the operations of
the business that they did not even know what products their companies made.
This has changed because the need for an effective management information
system is of primary concern to the business organization. Managers use MIS
operations for all phases of management, including planning, organizing,
directing, and controlling.
The MIS Job Today
MIS
personnel must be technically qualified to work with computer hardware,
software, and computer information systems. Currently, colleges and
universities cannot produce enough MIS personnel for business needs, and job
opportunities are great. MIS managers, once they have risen through their
technical ranks of their organization to become managers, must remember that
they are no longer doing the technical work. They must cross over from being
technicians to become managers. Their job changes from being technicians to
being systems managers who manage other people's technical work. They must see
themselves as needing to solve the business problems of the user, and not just
of the data-processing department. MIS managers are in charge of the systems
development operations for their firm. Systems development requires four stages
when developing a system for any phase of the organization:
Phase
I is systems planning. The systems team must investigate the initial problem by
determining what the problem is and developing a feasibility study for
management to review.
Phase
II identifies the requirements for the systems. It includes the systems
analysis, the user requirements, necessary hardware and software, and a
conceptional design for the system. Top management then reviews the systems
analysis and design.
Phase
III involves the development of the systems. This involves developing technical
support and technical specifications, reviewing users' procedures control,
designing the system, testing the system, and providing user training for the
system. At this time, management again reviews and decides on whether to
implement the system.
Phase
IV is the implementation of the system. The new system is converted from the
old system, and the new system is implemented and then refined. There must then
be ongoing maintenance and reevaluation of the system to see if it continues to
meet the needs of the business.
Types of Systems
Management
information systems can be used as a support to managers to provide a competitive
advantage. The system must support the goals of the organization. Most
organizations are structured along functional lines, and the typical systems
are identified as follows:
Accounting
management information systems: All accounting reports are shared by all levels
of accounting managers.
Financial
management information systems: The financial management information system
provides financial information to all financial managers within an organization
including the chief financial officer. The chief financial officer analyzes
historical and current financial activity, projects future financial needs, and
monitors and controls the use of funds over time using the information
developed by the MIS department.
• Manufacturing management information
systems: More than any functional area, operations have been impacted by great
advances in technology. As a result, manufacturing operations have changed. For
instance, inventories are provided just in time so that great amounts of money
are not spent for warehousing huge inventories.
In
some instances, raw materials are even processed on railroad cars waiting to be
sent directly to the factory. Thus there is no need for warehousing.
Marketing
management information systems: A marketing management information system
supports managerial activity in the area of product development, distribution,
pricing decisions, promotional effectiveness, and sales forecasting. More than
any other functional area, marketing systems relies on external sources of
data. These sources include competition and customers, for example.
Human resources management
information systems: Human resources management information systems are
concerned with activities related to workers, managers, and other individuals
employed by the organization. Because the personnel function relates to all
other areas in business, the human resources management information system
plays a valuable role in ensuring organizational success. Activities performed
by the human resources management information systems include, work-force
analysis and planning, hiring, training, and job assignments. The above are
examples of the major management information systems. There may be other
management information systems if the company is identified by different
functional areas The Management Information Systems (MIS) program is designed
to provide students with a strong educational foundation preparing them as
information system (IS) professionals. MIS consists of a specially designed
curriculum which emphasizes conceptual, analytical, technical and interpersonal
skills. The MIS program provides
comprehensive training in the application, use, and management of information
systems preparing students to provide effective information services and
support. Management Information System
(MIS.) is basically concerned with processing data into information. This is
then communicated to the various departments in an organization for appropriate
decision-making. Data Information Communication Decisions Data collection
involves the use of Information Technology (IT) comprising: computers and
telecommunications networks (E-Mail, Voice Mail, Internet, telephone, etc.)
Computers are important for more quantitative, than qualitative, data
collection, storage and retrieval, Special features are speed and accuracy, and
storage of large amount of data.
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