Role of Management Information Systems

Management Information Systems (MIS) provide regular information to managers to allow them to make decisions based on data rather than guesses. Certain data and analysis can play a very useful role in making good decisions about where and when to use human and other resources to achieve the mission of an organization. Managers with quality MIS are able to make decisions from an informed stance rather than a haphazard one. MIS can answer questions such as: Would it be better to add staff at the beginning or end of a manufacturing process? How do we choose the most efficient way to use our space? Do we need more patient exam rooms or a bigger lab? How much inventory should I store and when do I order more stock? What hours have the most customers, so I'll have an adequate staff to serve them?

Health and Capacity of the Whole System

The world is developing an increasingly global market and economy. Managers know that one tool they need is regular, clear and consistent information to help them in guiding their organization. This does not happen by chance. A system needs to be thoughtfully created with the purpose of providing useful information in the simplest and most elegant way possible. The basic management information system measures inputs and/or outputs, allowing managers to analyze the relationship between them and make decisions based on the outcomes they desire.

We are familiar with these types of systems in our daily life. For instance, a speedometer tracks the speed of a car by being attached to the motion of the tires. It is a speed-measuring system used to make decisions. If I have to be somewhere in half an hour and it's 15 miles away and I'm going 70 miles an hour, by checking the speedometer I realize I can slow down or take a scenic route, or even stop for a cup of java.

A Prius has a chart on the dashboard that lets you know second by second the miles per gallon you are using, so you can change your driving pattern to get higher mileage. The graphic is one management information system that helps the driver make decisions about her driving. It also is part of a larger system of vehicles emitting greenhouse gases. Since better mileage equates with fewer emissions, it allows an individual to influence his small contribution to global warming.

The body is a living system; someone trying to gain or lose weight measures food intake through calorie counts or points and gets on a scale to track the outcome.

Key Information

The amount of information available for analysis is almost infinite, so it is important to choose the critical information that will let managers see their situation clearly. When airlines and hotels developed management information systems that included the revenue lost in not selling empty seats or rooms, they developed ways to get some value from the rooms by offering them to latecomers at deep discounts. The key information for these managers was not the end of the month profit or gross sales, but the occupancy rate by time of year, day of week, routes, and so on.

When a McDonalds store manager is setting his employees' schedules for the coming week or month, he needs to know when sales are usually highest, and if there are daily or weekly variations in that data. Do more people come in between 6 and 7:30 a.m. Monday through Friday than on Saturday or Sunday? Maybe the factory down the road quit running a shift and that impacted sales at the time those workers go to or from work.

Retail managers need to balance inventory on hand with rate of sales and type of goods sold. Health care managers need to know how many hours a physician or other essential care provider can work safely and provide staffing to allow adequate coverage.

Public Sector

Legislators want to know that if they invest a large amount of taxpayer money in streetcars, they won't be reviled for having it placed in low-demand routes, or that the streetcar manufacturer used poor materials that wear out way too quickly. Legislators have staff and public servants who provide them with information. Lobbyists are also very glad to provide the information that will support the role of their special interest.

Soup kitchen managers need to know now much food to prepare, so they don't have hungry people on the one hand or an excess of food that goes to waste on the other. They need to know the clientele they serve and if there are some special needs that need attention.

One of the current uses of management information in the public sector is to notice that there is disparity between the number of people in certain groups and their over- or underrepresentation in other populations--for instance, that a higher percentage of low-income children drop out of school, or that there are more Native American youth in foster care than their percentage of the population would indicate.

MIS and the Organization's Purpose

Organizations exist for reasons. Legislators review the needs and demands of the citizens to decide how to allocate tax revenues to promote the sometimes competing economic and social goals of the state. Perhaps the reason for the legislature is to seek the greatest good for the greatest number, Some others operate from the position that the goal is to assure that the needs of the most vulnerable in the population are not ignored.

Airlines exist to get people to distant locations efficiently and safely and make a profit for the shareholders. The balancing of those three goals is critical. For example, in the desire for higher profits, or even fiscal solvency, the airlines have created closer seating arrangements and annoyingly cheap snacks.

It is essential that the information system designed for management helps them support the organization's purpose. Toyota is legendary for its management system in which any employee can stop the assembly line to make an improvement to the process.

Putting It All Together

Management steers the organization to achieve the organization's purpose. To have the information necessary to make changes in resource allocation or personnel use, management needs key indicators as to how the process is working. A management information system provides regular information about the health and function of the organization. The MIS needs to provide timely, accurate, clear and consistent information that gives managers a view of the entire organization.