Introduction Role and impact management information systems (MIS)

The society has changed significantly from the barbarian to the agrarian society, from agrarian to the industrial society and from the industrial society to a society governed by the service sector. This structural transformation has brought about obvious changes in the way people think. We are all living, not in industrial society or an agrarian but an Information Society. In fact, we refer to the present times as Information Era or the IT Age. Underneath this is a tacit recognition of the fact that not since the arrival of the introduction of the telephone, and the automobile an invention had such wide-spread impact on our society as the computer, which has ushered in the Information Era.

Read more about decision support system and role of management information system

If individual life has been changed by information, it has profoundly affected business organisations. We are living in an era characterized by globalization and liberalization. Far- reaching changes across borders are sweeping nations, and we are all getting engulfed in a boundaryless global village. However, this emerging scene also requires people to develop the ability of “thinking globally and acting locally” which is now also being referred to as “globalization.” Business operations have become, and are going to become, more and more complex and competitive.

The increased complexities can be broadly categorized into business complexities and management complexities. The increased business complexities could be attributed to:

1. Technological revolution
2. Explosion of information
3. Changes in product/product life cycle
4. Research and development

The increased management complexities could be assigned to:

1. Management science technologies
2. Decision-making
3. The onset of computers
4. Information feedback system

These complexities have in turn necessitated:

1. Strategic planning
2. processing/Obtaining/storing, retrieving and using information for decision-making
3. Devising operational plans
4. The setting of objectives (parameters)

Hence, information is today seen, accepted and recognized as an invaluable source to ensure effective and efficient decision-making, thereby providing optimality of results leading to survival and prosperity of business organisations. Information is a resource because It is scarce, It has a cost, and It has alternative uses.

It must, however, be remembered that unlike other resources, which can be used only once, information can repeatedly be utilized. It is also not tangible. A decision-maker must keep these aspects in mind. Many times, we do not have the information we want, and then there is a dilemma. The dilemma is beautifully expressed in the following words, generally referred to as Finagle’s Law of Information.

One important aspect of the difference between MIS and routine data processing is the capability to provide decision-making support, planning and analysis. An MIS orientation means users have access to decision models and methods for querying the database on an ad hoc basis; the database is also an essential part of conventional transaction processing and reporting. In MIS, information is utilized to improve decision-making and achieve improved organizational effectiveness.

CONCEPT OF MIS

MIS is the system, which makes available the right information to the right person, at the right place, at the right time, in the right form and at the right cost. There are, of course, various definitions of MIS. Let us look at some of them.

MIS is a multicultural user-machine system for providing information to support decision-making operations, management, and functions in an organization. The system utilizes computer software and hardware, models for analysis/manual procedures, planning, control and decision-making and database. A combination of human and computer based resources, which result in collection, storage, retrieval, communication and use of data for the purpose of efficient management of operations and for business planning.”

A formal MIS system should be able to take care of the following functions:

• Handling of large data.
• Communication of the information to the user on time.
• Complex processing of data and multidimensional analysis, quick search and retrieval.
• Confirmation of the validity of data and transaction.
• Mass storage.
• Fulfilling the changing needs of information.

The management information system uses computers and communication technology to deal with the above mentioned functions.

Role of MIS

MIS has become necessary due to increased business and management complexities. These complexities demand not only quantitative but also qualitative decision-making. All managers, as we know, have to take decisions under conditions of risk, certainty or uncertainty. A good manager/decision maker is one who minimizes if not eliminates, the elements of risk and uncertainty in decision-making. MIS is helpful in doing precisely this. Hence, MIS is required to enable managers to take qualitative decisions and ensure success for their respective organizations. MIS also enables the managers to minimize the element of surprise. Again, MIS enables decision-makers to come out with the appropriate response to a business situation. Thus, MIS enables policy makers to give either a reactive or a proactive response. As the decisions are also futuristic, MIS facilitates pro-active decision-making it allows the managers/organizations to be ready for tomorrow. MIS, thereby, can act or function both as an instrument of defense as well as a weapon for the offense, with strong strategic planning base.

Impact of MIS

MIS creates an information-based work culture in an organization. Since MIS plays a critical role in the organization, it creates an impact on the organizational functioning, performance, and productivity. MIS changes the management function of an organization. With a good MIS support, the management of marketing, finance, production and personnel can become more efficient. The tracking and monitoring of the functional targets become comfortable. The functional managers are informed about the progress, achievements, and shortfalls in the activity and targets. The manager can alter certain decisions with the help of information indicating the probable trends in various aspects of business. This helps in forecasting and long-term perspective planning. The manager’s attention is brought to a situation, which is exceptional in nature, inducing him to take action or a decision in the matter. A disciplined information reporting system creates a structured database and a knowledge base for all the people in the organization. The information is available in such a form that it can be used straight away or by blending and analysis, saving the manager’s valuable time.

MIS affects the organization by making it convenient to understand the business better. MIS begins with the definition of data, entity, and attributes respectively, designed for information generation in the organization. Since all information systems use the dictionary, understanding terms and terminology becomes easier, thereby bringing clarity in communication and understanding of an event in the organization. MIS calls for the systematization of the business operations for an efficient system design. This leads to streamlining of the operations. It improves the administration of the firm by bringing a discipline in its operations, as everybody is required to follow and use the systems and the procedure. The process brings a high degree of professionalism in the business objects. Since the goals and objectives of MIS are the product of business goals and objectives, it helps indirectly to pull the entire organisation towards the corporate goals and objectives by providing relevant information to the people of the organisation. A well-designed system with a focus on the managers makes an impact on managerial efficiency. The use of computers helps managers to use the tools and techniques, which are impossible to use manually. The ready-made packages make this task simpler. MIS positively impacts the managerial ability to perform. It also improves the decision-making ability considerably.

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