Importance of the Management Information System

Management Information Systems (MIS) not only include software systems, but the entire set of business processes and resources that are used to pull together information from functional or tactical systems. Data is then presented in a user-friendly and timely manner so that mid and upper-level managers can use it to take the right actions. The entire system is designed so that the company will meet its strategic and tactical goals.

Significance

Organizations have multiple functional systems. These usually include sales systems, call center systems, financial systems, inventory systems, logistic systems and more. MIS combines information from multiple systems. This helps management staffers better understand their own departments' contributions. In many cases, the combination of data, such as sales figures combined with available inventory, help the manager take the appropriate action in order to meet the customer's needs.

Function

The primary function of MIS is to help a manager take an action, answer a question or ask the right question. The questions or actions should directly relate to tactical or strategic goals. A sales manager who uses projections from the financial systems to compare with actual sales from the sales system can better gauge whether goals will be met. If the target is not going to be met, then the manager and his group can review their past actions and make necessary changes in order to increase sales and meet goals.

Types

MIS is not necessarily a specific combination of functional systems , but instead is created based upon the business need. CRM (Customer Relationship Management) systems combine data that relates directly to the customer experience. ERP (Enterprise Resource Systems) combine data used in the entire sales process. Decision Support Systems or Data Warehouse often combine summary data from multiple systems in order to show executives a snapshot view of the entire organization.

Considerations

Prior to starting an MIS project, organizations need to carefully review the transactional systems, the business processes and the needs of management within an organization. As an MIS project grows, so does the cost of implementing a solution, managing the information processes and monitoring daily activities. The result of an MIS project must provide value back to the organization in order to be worth the cost.

Misconceptions

Many managers mistakenly believe that, for MIS to be effective, all data from all systems must be combined. The value of MIS is based upon how much it can help managers manage. If this means bringing just the data needed from several systems and ignoring the rest  for now, the end result still has worth, which is the ultimate goal of MIS.