The Role of a Management Information System in an Organization

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Management information system
Management information system (Image: business report image by Christopher Hall from <a href='http://www.fotolia.com'>Fotolia.com</a>)

Management information system, or MIS, is a managerial decision-making tool. A company uses it in all of its business operations and processes. As the management is in complete know of everything transpiring in the company, it leverages on this advantageous position. Using it, a company is able to record and document all facts pertaining to its procedures and methodologies. The basic intent is to manage and control all of the company’s employees and material through MIS.

Significance

Using an MIS, an organization is able to establish its hierarchical structure and work-flow charts. Every employee in the organization knows the employees he has authority over and to whom he is responsible for work. The work then progresses without glitches. The company’s operating and procedures are listed by an MIS. The preparation of audits also gets simplified.

Types

Organizations use different types of MIS for different needs and scenarios. At a given point of time an organization might be using several types in isolation and in combination. Organizations essentially use the TPS. TPS is the acronym for transaction processing system. The business tabulates all its recurring transactions like inventory and customer orders using TPS. The operations information system, or OIS, is used by managers to plan out their production and scheduling activities. The decision support systems, or DSS, is used by the top management to find feasible solutions and options to different scenarios.

Benefits

There are numerous pluses in using an MIS. The organization records and tabulates all its key strategic functions. As and when deviations from the planned course happen, the organization is able to take corrective action at once. Communication channels are enforced. As the authority-responsibility diagrams are well established, the superiors delegate work to their subordinates and the subordinates turn to them for guidance and suggestions. The MIS mechanism enables the organization to weigh the pros and cons of several methods of accomplishing a task and choosing the most practical one.

History

Management information systems and computing systems were both built in the 1960s. Companies all over the world use them both for efficient and effective business operations.

Considerations

With an MIS, company leaders must be mindful of two things. First, as very often it is consultants who develop the MIS for the company, they must be knowledgeable of all of the company's prevalent policies and practices. Secondly, a company must every year allocate funds for maintaining and sustaining the MIS.

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