MANAGEMENT INFORMATION SYSTEM

Dr. Harjito

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What Is Management Information System (MIS)?
• . Management information systems facilitate a firm’s daily operations. It is present in
every organization. Record keeping is significantly easier with information systems.
The primary role of an information system is to simplify workflow; it saves the time
and energy of employees.
• Data is crucial for every business. In the internet era, firms are bombarded with too
much data, not just relevant data. Firms collect data in files, documents, cloud
storage, hard copies, and soft copy formats. Primarily the MIS stores data in a secure
manner. For example, a bank maintains records of account deposits, withdrawals, and
customer details

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• A management information system is a database that facilitates day-to-day business
activities. Primarily, information systems increase efficiency by reducing employee
effort.
• An MIS is present in every organization to collect, record, and track information.
• The biggest hurdle with an information system is employee training. In addition, the
system needs maintenance.
• Despite the benefits, not all firms can afford an advanced information system.
Sometimes, due to MIS, work becomes too easy for the employees, and their growth
stagnates.

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Management Information System (MIS)

• A management information system (MIS) is used for processing data. In an institution,

employees, managers, and staff access MIS. Employees use MIS for day-to-day
operations, to print invoices, bill payments, or performance reviews. In addition, they
use MIS to compare, analyze, and store data—a database for information. Thus, MIS
helps firms in taking decisions rapidly and accurately.

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 MIS

Initially, employees are given MIS training—MIS interface, usage, and importance. Then, in some firms, training is given to
customers and clients who use the system instead of employees.

The term ‘information system’ is often misunderstood. There is a misconception that MIS is all about coding and computer
technology. Practically though, MIS is more than a code. In many scenarios, information systems do not require any code.
MIS is more to do with data analysis. Fundamentally, an information system is a common framework that increases
the productivity of all firm employees.

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Management Information System Components

• The management information system comprises the following components.

#1 – Data
• Data is crucial for every business. Unfortunately, in the internet era, firms are bombarded with too much data, not just
relevant data. Firms collect data in files, documents, cloud storage, hard copies, and soft copy formats.
• Primarily the MIS stores data in a secure manner. For example, a bank maintains records of account deposits,
withdrawals, and customer details.
#2 – People
• An MIS is designed to be used by firm employees. managers, accountants, executives, and staff for day-to-day
operations. Ideally, the MIS should be customized based on the firm needs. The MIS features should suit common usage.
#3 – Business Processes
• Information systems simplify complex processes—the centralization of operations achieves this.
#4 – Hardware
• Hardware is an indispensable component of MIS. Every system runs on a device, but the processing capabilities vary.
#5 – Software
• MIS software is categorized into two—system software and application software. The term system software refers to
operating systems like windows and iOS. Application software is more specific—banking systems, accounting
applications, payroll applications, etc.

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Requirements

• The requirements of MIS are as follows.

➢Every MIS requires a database that stores information, documents, files, and reports.
This could be employee details, performance reviews, records, old presentations, and
new projects.
➢For installing an information system, firms need to make an Initial expenditure.
Further, the MIS requires timely maintenance and employee training.
➢Information systems are useful when employees use them regularly. For that,
employees need access, and the system should be maintained.
➢Business operations and firms evolve, and the MIS needs to keep up. Therefore,
information systems need updating. In some cases, firms may need additional
hardware and new software applications.

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Role

• The MIS plays the following roles.

➢MIS stores data and records vital information.

➢Firm employees use MIS software to complete daily operations and administrative
tasks. Therefore, MIS should increase employee efficiency.
➢Larger firms use automation and data generation to conserve employees’ time and
energy. But those systems can be expensive.
➢Again. The success of a system depends more on users than the software or
hardware. Unfortunately, MIS training is often overlooked.
➢An information system is beneficial in strategizing, analysis, and performance
comparison.

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Types

• Management information systems are classified into 12 different types.

• #1 – Process Control
• Process control creates continuous reports and allows managers to observe real-time
productivity and progress. For example, in manufacturing, product managers use it to
analyze products’ quality and consistency.

• #2 – Management Reporting System

• A management reporting system is the most common MIS. It records labor
information—efficiency, attendance, and financial documents. Firms use management
reporting systems to track employee records and growth. The MIS generates
quantitative reports; managers compare laborers based on data.

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• #3 – Inventory Management
• Factories use MIS to track raw materials and inventory items. This way, managers make sure
every small item is secure. If inventory management is efficient, firms need smaller
warehouses and encounter fewer production delays.

• #4 – Sales and Marketing Systems

• Top-level management uses MIS to ascertain the firm’s sales figures. MIS also tracks firms’
marketing expenditures, customer reviews, customer feedback, and product availability. Also,
MIS is used to track the usefulness of an advertising model.

• #5 – HR MIS
• In large firms or multinational companies, HR managers circulate information through MIS.
This way, everyone is kept in the loop. In human resources, MIS is used to ensure that all
employees are complying with firm guidelines.

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• #6 – Accounting and finance MIS
• MIS tracks a company’s assets and investments. In addition, managers, CA, and the
accounting department use information systems for computing taxes, funds, and compliance.
• #7 – Decision Support Systems
• A decision support system collects both internal data and raw external data. Further, MIS
streamlines raw data into relevant data. Thus, managers can access relevant data for efficient
decision-making. For example, this could be avoiding risk, stratification, or introducing a new
policy.
• #8 – Expert MIS
• Expert systems are algorithms-based MIS—they assist new employees design concepts—for
a specific subject. Some expert MISs also employ AI to improve models and concept
• #9 – Executive Information System
• It compiles easy-to-read reports and summaries. In addition, organizational systems optimize
data presentation—the system reorients data into charts, graphs, spreadsheets, and statistical
tables. As a result, managers can process graphical data at a faster pace.

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• #10 – Transaction MIS
• Transaction MIS automates business operations that involve complex processes—monetary
transactions and calculations. It replaces processes that are time-consuming (when done
manually).

• #11 – School MIS

• Information systems are used in schools, colleges, and universities to create schedules. In
addition, educational institutions use MIS for storing files (record keeping). As a result, MIS
databases save considerable time over manual record keeping.

• #12 – Local Database

• A local database is a community-managed MIS; typically, a database is used for public
information and infrastructure. It is a source of information for citizens; if required, citizens
can also request formal documentation (about precise public information). Social surveys also
local databases.

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Examples

• Now, let us look at some examples of management information systems to

understand their application.
• Example #1
• Let us assume that a multinational company owns multiple domestic and foreign
offices. The total number of employees is 900. Maintaining a manual record of all the
employees is not feasible.
• Therefore, firms’ human resource department uses a human resource information
system to collect, record, and classify employee information. The firm also uses MIS
to track attendance and leaves. In addition, the firm opts for a centralized database
to store large amounts of data.

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• Example #2
• Consider a large hospital—a plethora of patients and staff hustling around. The
hospital has multiple departments, each employing nurses, surgeons, and physicians.
Some are permeant employees, and others work for a few hours. The hospital’s
administration needs to record everything.

• The hospital installs a health information system to record every minute detail. The
MIS also tracks every single expense. As a result, the doctors get easy access to
patient information; there is minimal chaos.

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Advantages And Disadvantages

• MIS has the following advantages ;

✓MIS drafts real-time reports—organizations become more dynamic—performance is

enhanced.
✓ With a firm, MIS enables easy information sharing—everyone is kept in the loop. For
example, information could be regarding ongoing projects or updates.
✓Information systems transform raw data into relevant data, graphical representation,
and analytical reports. Proper presentation of data speeds up decision-making.
✓An MIS compares performances and reviews projects. This is used for projecting the
future requirements of a firm.

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• The disadvantages are as follows.

✓MIS can be expensive. The benefits may not justify the expenditure.
✓MIS requires constant monitoring.
✓Over time employee becomes dependent on it. Sometimes, when work is easy,
employee growth stagnates.
✓MIS outputs are primarily based on inputs, which means output is quantitative and
qualitative. Therefore, MIS is only effective for empirical data.
✓The system does not update itself and therefore requires manual support.
✓An MIS can fail. Firms that heavily depend on MIS struggle during emergencies.

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Management Information System vs Computer
Science vs Decision Support System
• Now, let us look at MIS vs computer science vs decision support system comparison to
distinguish between them.

✓An MIS identifies data and converts it into useful information. In contrast, computer science is
a branch of science that develops technology benchmarks for computing. On the other hand,
a Decision support system (DSS) is a decision-making tool.
✓MIS can work on corporate databases, but DSS requires a specialized database. Computer
science creates an infrastructure for MIS and DSS.
✓MIS focuses on speed and efficiency. DSS prioritizes effectiveness; it is used for complex
functions.
✓MIS is designed for mass usage—a large number of employees. On the other hand, DSS is
explicitly designed for managers, analysts, and top-level management.
✓Primarily MIS store data. In contrast, DSS is more inclined toward data manipulation.

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1. What is a health management information system?
• An MIS records patient information, illness, medical history, and current medication in the
hospital. MIS streamlines data and enables easy access. Hospitals record too much data;
hence MIS classifies them into multiple categories. Doctors access MIS for diagnoses.

2. What is a degree of a management information system?

• Aspiring engineers can attain specialized bachelor’s degrees in information systems or a
Master of Science in Information Systems (MSIS). The curriculum covers web development,
data science, and project management.

3. Who uses management information systems?

• In most cases, information systems are installed by a firm. As a result, MIS is further used by
firm employees, managers, HR, and even customers. In addition, an MIS facilitates day-to-
day operations—bill payments, report generation, performance comparison, etc.

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