Definition of Management Information System

One of the most important functions of management is decision making. Sound decision making helps attain organizational goals. Effective decision making calls for timely, complete and relevant information. A management information system (MIS) is a computerized system that is designed to provide this information.

Management Information

Management information refers to information that is timely, accurate and relevant in relation to a particular situation. Management information helps mangers decide what to do in a particular situation. For example, the actual age of the accounts receivable of a company may be 45 days whereas company policy is to keep the age to a maximum of 30 days. This information calls for action to reduce the age of the accounts receivable.

System

A system is made up of interdependent components that form a whole. Each component of the system serves a specific purpose but at the same time interacts and links with other components to pursue a common goal. A business enterprise is an example of a system. Each department (for example, human resources, finance) has its own function and objectives but all are aligned toward the overall mission of the organization.

Management Information System

An MIS can be defined as a combination of people, computers and procedures for collecting and organizing information to facilitate decision making. In any organization a reasonable amount of time and effort is devoted to data collection, documenting, processing and communication. Every individual looks for information that is relevant to her duties. Thus, information is people oriented and varies with the nature of people's work in the organization.

Types

There are four types of management information systems:
1. Transaction processing systems: These systems process a large volume of routine, recurring transactions. Example: a bank's system for recording deposits and payments.
2. Operations information systems: These systems gather comprehensive data, organize it and summarize it in a form that is useful for managers. Example: an inventory management system.
3. Decision support systems: These systems help mangers with the necessary information to make intelligent decisions. They have three fundamental components: database of relevant information, decision making models and a user friendly interface.
4. Expert systems: Are meant to mimic humans in making decisions in a specific field.

Considerations

While management information systems have become more complex and capable, give the complexity of decisions facing organizations, there is still the need for human judgment and intuition in decision making. Designing and implementing an MIS is not an end in itself. Such initiatives should go hand in hand with assessing information needs of the organization and training people to effectively use the system in decision making.

References

• Management Information System; N. Kumar, R. Mittal; 2004
• Essentials of Contemporary Management; Gareth R. Jones, Jennifer M. George; 2003
• General Management; J. Kroon; 1995