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Introduction
A management information system is one that provides the necessary information to run a business effectively and efficiently.Management information systems are like the subset of internal control procedures for an organization ,which covers the application of people,documents,technologies, and procedures used by management accountants to solve business problems of costing ,service and product. Management information systems are very different from regular information systems which support usual operational activities in businesses. Initially information was shared in an organization manually and periodically and was limited to being a byproduct of accounting information with some more statistics which caused unnecessary delays and inefficiencies in spreading information in the organization. Later they started distinguishing between data and information and only important points relevant for decision making began to be shared in the organization. Also initially businesses used computers for their very basic functions like tracking sales and payroll etc. however with the growth of businesses in terms of turnover, geographical spread ,product lines etc it became difficult to use such rustic and basic sytems to meet the organizations information needs.As more and more data got stored and linked man started analyzing this data and preparing what we call management reports from this data.The term MIS describes that system in an organization which provides managers data about sales,income,revenue,growth,expenses etc.Today however MIS includes a wide range of functionalities including Decision Support Systems(DSS),Enterprise Resource Planning (ERP),Customer Realtionship Management (CRM) and other such database retrieval applications. The term MIS is a planned system of collection, processing, storage and dissemination of data into information to carry out management functions. According to Philip Kotler MIS may be defined as marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers A successful MIS system is similar to a Five year Plan . It must contain reports based on performance analysis of areas critical to the plan along with some room for loopholes and deviations to make room for changes especially in areas such as recruitment and training of human resource.
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Whenever a business is looking to establish such a system it must look into what is known as a System Development Life Cycle which includes aspects like Analysis, Requirements, Design, Developments,Testing and Implementation.
Source-http://www.freetutes.com/systemanalysis/types-of-information-system.html
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The different types of information systems in brief are1. Transaction Processing Sytem-transaction Processing System
processes transactions in an organization.Transactions can be any activity in an organization and differ from organization to organization.Ex-railway ticket processing system etc.However there are some transactions common to all organizations For ex- Induction of a new employee, removal of an employee. Its extremely important for a Transaction Processing System to be quick and efficient.Such systems should be speedy and accurate and should be designed for the needs of an organization.
2. Management Information Systems-Such systems assist lower level
management in decision making and problem solving .They use the results and information of the Transaction processing Systems and some other systems.It is primarily a set of information processing functions.
3. Decision Support Sytems-Such systems are used by the top level
management in decision making.Such systems handle structured and semi structured decisions. A decision is said to be semi structured if there are no clear procedures for making the decision and if all factors affecting the decision have not been identified readily in advance.They are of non recurring nature. Decisions taken once may not be taken again. Also such systems need to be highly customized.
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optimize business processes, address information, needs of employees and various stakeholders and take informed strategic decisions. Budget allocation and monitoring issues can affect the efficacy of MIS. It has its pros and con depending on organizational deployment and usage.
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it supervises the company's activities, sums up the information and operations and raises communication and collaboration among employees. This assures better planning for all activities and better ways to measure performance, manage resources and ease compliance with industry and government regulations. Control helps in calculating, preparing right budgets and providing the tools and important information to, top management, employees and business partners. It Minimizes information overload: MIS change the large amount of data in to concise form and thereby avoids the chaos which may originate when managers are flooded with expound facts. MIS Promotes Decentralization: Management information systems have switched the dynamics of running businesses expeditiously. Decentralization is one of the key advantages; it allows checking of operations at low levels and frees up resources for departmental managers to devote time to strategic activities. Coordination of specialized activities and projects is improved and decision makers in the organization are aware of issues and problems in all departments. It brings Coordination: MIS eases integration of specialized activities by keeping departments aware of the problem and needs of other departments. It connects all decision centers in the organization. Aid Decision Making-The purpose of MIS is to create synthesized and processed information from computerized or automated and certain manual systems. Information distribution to all levels of corporate managers, professionals and key executives becomes quite consistent with streamlined MIS. Managers are able to make fast, timely and informed decisions. Top management and board members can take important decisions, plan future growth and business expansion activities based on the data and information generated by MIS.
Disadvantages of management information systemThis document was downloaded from Coursework.Info - The UK's Coursework Database - http://www.coursework.info/
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1.Budgeting of MIS extremely difficult.-Depending on organization deployment, usage and impertent factors, some disadvantages related to Management Information Systems can come to the fore. Allocation of budgets for MIS upgrades, modifications and other revisions can be quite tricky at times. If budgets are not allocated uniformly or as per immediate requirements, key functionalities might get effected and benefits might not be realized consistently. Integration issues with legacy systems can affect the quality of output and vital business intelligence reports. 2.Constant Monitoring Issues-Change in management, exits or departures of department managers and other senior persons has a major effect on the working and monitoring of MIS systems. Since MIS is a critical component of an organization's risk management strategy and allied systems, constant monitoring is very important to ensure its effectiveness. Quality of inputs into MIS needs to be monitored; otherwise consistency in the quality of data and information generated gets effected. Managers are not able to direct business, operational and decision-making activities with the requisite flexibility
3.Unemployment - While information technology may have streamlined the business process it has also downsized and outsourced the jobs. This means that a lot of lower and middle level jobs have been done away causing number of people to loose their jobs and become unemployed. 4.Privacy - Though information technology may have made communication much easier and convenient, it has also bought issues related to privacy. From cell phone signal interceptions to email hacking, people are now worried about their once private information becoming public knowledge. 5.Lack of job security - Experts believe that the internet has made job security a big issue for the employees as technology keeps on changing each day. This means that one has to keep himself updated with developments , if he or she wishes for their job to be secure. 6.Dominant culture - Information technology has made world more integrated but it has also contributed to one culture dominating another weaker one. For example it is now argued that US influences how most young teenagers act, behave and even dress up. Languages too have lost their identity, with english becomin the primary mode of communication in the business world.
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strategy. MIS systems provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually. MIS systems can also use these raw data to run simulations hypothetical scenarios that answer a range of what if questions regarding alterations in strategy. For instance, MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product. These Decision Support Systems (DSS) enable more informed decision making within an enterprise than would be possible without MIS systems. Data Processing : Not only do MIS systems allow for the collation of vast amounts of business data, but they also provide a valuable time saving benefit to the workforce. Where in the past business information had to be manually processed for filing and analysis it can now be entered quickly and easily onto a computer by a data processor, allowing for faster decision making and quicker reflexes for the enterprise as a whole. For manufacturing/operations companies, getting the right information to the right people in a timely manner has never been more important than it is today to reduce hidden costs, to increase production, and to maximize profits. Manufacturers have to manage the complexity of their supply chain, internal manufacturing, and operations along with meeting their distribution and customer requirements. Manufacturers today are faced with making extremely complicated decisions in real-time, on a daily basis, with limited information. Manufacturers face increasing globalization, more competition than ever, and customers whose demands reflect their own knowledge and expectations of a global market. Every manufacturing company is different like different processes, different tracking systems and different challenges. All of these variations add up to the fact that you need a management information system (MIS) that caters to the specific needs as well. While looking for a MIS solution you may define your needs and formulate a list of requirements that simplify the adoption of information technology for improving performance. In the manufacturing industry, information quality issues exist throughout the supply chain. One reason for this is that manufacturers depend on data from suppliers, contract manufacturers, distributors, retailers, and consumers in order to effectively and efficiently source raw materials, forecast demand, make and market their products. Very seldom will manufacturers have control over the quality and format of this external data. Through incremental improvements in data quality throughout the supply chain, however, manufacturers can realize significant performance improvements, including
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improved speed and efficiency of product manufacture, improved ability to perform demand analysis, improved channel partner effectiveness through timely and accurate product and pricing information, and improved customer satisfaction through timely and accurate customer information. Measurement and verification are needed to ensure the information quality program is reaching its objective. The single biggest obstacle to deploying a MIS in manufacturing is data: availability, quality, and access. Several factors make it difficult to ensure optimal performance in manufacturing. Data and events come from many disparate sources, including those of your suppliers, contract manufacturers, and other business partners. Data types and formats vary from one source to the next. Business partners in the collaborative supply chain may use different data schemas and systems to track their manufacturing process. Large volumes of data must be processed from each interface and subsystem used in the manufacturing process. A MIS tool should also easily integrate with operational applications and legacy systems that already exist in a typical manufacturing environment. Real-time manufacturing data need to be put into many different contexts for other roles in the organization that are contributing to the optimal performance of the real-time enterprise. Manufacturing companies today have extensive inventories to track and move, a greater number of products to generate, numerous suppliers to negotiate with and quality standards to maintain. They also have an ever-increasing need to acquire, satisfy and retain additional customers to remain profitable. Because of these complex pressures, it is imperative that all the links in the supply chain be managed successfully.
In service sector it is basically providing the most satisfying service to the customers. Managers pul lot of efforts to create a distinctive service to remain competitive swt standards and measure the performances. Basically the steps involves are initiation to service, transition to service, pre-service, service and post service. Lets take the example of hotel industry the process there starts with the booking of the hotel room and then the type of services on the same side are provided to the customers. Everything gets recorded in the information system and the feedback of the customer is also collected and gets stored in the system for further future records. Thus the management information system has a great importance in the manufacturing as well as in service sector. Not a single organization can work without a sound information system present in the organization.
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A suitable database location and format built for decision support -based analysis and reporting
Robust applications and tools to report, monitor, and analyze the data
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Case Study
Case
A waiter takes an order at a table, and then enters it online via one of the six terminals located in the restaurant dining room. The order is routed to a printer in the appropriate preparation area: the cold item printer if it is a salad, the hot-item printer if it is a hot sandwich or the bar printer if it is a drink. A customers meal check-listing (bill) the items ordered and the respective prices are automatically generated. This ordering system eliminates the old three-carbon-copy guest check system as well as any problems caused by a waiters handwriting. When the kitchen runs out of a food item, the cooks send out an out of stock message, which will be displayed on the dining room terminals when waiters try to order that item. This gives the waiters faster feedback, enabling them to give better service to the customers. Other system features aid management in the planning and control of their restaurant business. The system provides up-to-theminute information on the food items ordered and breaks out percentages showing sales of each item versus total sales. This helps management plan menus according to customers tastes. The system also compares the weekly sales totals versus food costs, allowing planning for tighter cost controls. In addition, whenever an order is voided, the reasons for the void are keyed in. This may help later in management decisions, especially if the voids consistently related to food or service. Acceptance of the system by the users is exceptionally high since the waiters and waitresses were involved in the selection and design process. All potential users were asked to give their impressions and ideas about the various systems available before one was chosen. Source-http://www.mbaknol.com/management-information-systems/case-studyon-mis-information-system-in-restaurant/
Case QuestionsThis document was downloaded from Coursework.Info - The UK's Coursework Database - http://www.coursework.info/
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1. In the light of the system, describe the decisions to be made in the area of strategic planning, managerial control and operational control? What information would you require to make such decisions? 2. What would make the system a more complete MIS rather than just doing transaction processing? 3. Explain the probable effects that making the system more formal would have on the customers and the management.
Answers1.Management Information Systems is a planned system of collection, processing, storage and dissemination of data into information to carry out management functions.A MIS system promotes decision making by providing acces to timely ,accurate and effective information useful for decisions. Managemnt information systems are relevant for almost all levels of management . They help in decision making which inturn aids in better planning , control and coordination. Decision making as we know is the core of management functions.Decsions may be tactical , technical,or strategic. Strategic decisions are uncertain and future orientd. Tactical decisions are related to planning and control.Technical decisions pertain to impelemtation of tasks with the appropriate technology. There are primarily 3 areas in an organization strategic , managerial and operational control. Strategic decisions relate to the future. They are primarily associated with planning..this involves planning futre bugets, target markets ,policies,objectives etc. This ia a top level decision where all the details to the top level management have to provided in terms of percentages or numerical figures alike.They will compare the weekly sales with the costs etc. allowing for tighter cost controls .Effective support system at the graphic level will go on to support unstructured decisions.Examples of unstructured support systems include sales trend forecasting ,budget forecasting, operational plan development etc. The decisions to involving managerial control are the ones which depend upon the information available to them. This are relates to managers belonging to the middle level of the hierarchy.It is the middle level who decides the menu in the organization , the transactions that are voided and the reason for them being void are keyed into the syetem by them which supports decision making in the management especially if the void is related to food or service. The decisions at the operational level relate to those dealing with performance of specific tasks using appropriate technology.This is basically a very low level system
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wherin the waiter keys in the order through 6 special terminals which are routed to one central terminal where the order is prepared.The items ordered list is automatically generated so is the bill. The chef sends all his out of stock messages through this system.This gives the waiters feedback which helps in better service.This type of sytem is called a Transaction Processing System and is used for order processing , order tracking,plant scheduling ,compensation etc. Thus the computer based online system is best because1. Eliminates time and cost over runs in manually sending orders to the kitchen each time 2. Eliminates problems of illegible handwriting of the waiter leading to further confusion and delays 3. Faster feedback ,helps to serve customers better as discussed previously
The advantages to the restraint are1. Easier to get itemwise costs and sales figures making the decision making process easier. 2. It also helps in planning the menu 3. Provides details for cost accounting ,pricing,adding services etc.
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If the manager provided incentives for efficiency and linked the MIS with efficieny gains the system would become more complete. Management Information Systems should be designed in such a way that they promote strong efficiency in management and operational systems.Keys to the development of Executive Information Systems should also be understood carefully. Decision Support Systems would also make the MIS more complete as it involves computer based knowledge systems that would support decision making . Increased personal efficiency, expedition of problem solving, facilitating inter personal communication, promoting training and learning, increasing organizational control, getting a competitive advantage, encouraging exploration and delivery , revealing new approaches to solve an organizational problem are just some of the ways to make an MIS system complete.
4. The MIS system should be an open and dynamic system and must reflect any
kind of operational , environmental, business and technological changes to the management so that the required action and measures can be taken well in time. The success of this system will require a formalized structure so that machines worldwide have shared ,common , standardized information access.
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An organization functions in a fast changing, dynamic and extremely competitive global environment and thus it needs to focus on effective and efficient execution of operations so as to maximize customer satisfaction. To achieve this goal information must be accessible across all functions , levels and business units. By formalizing the system the exchange of information across all levels, functions, business units and suppliers would be more efficient.
In the case we are referring to, if the restaurant t kept a track of all the transactions happening every day it will become much easier for it to seek financial assistance at a later stage when it needs it. Also a systematic record of all transactions can facilitate control and reduce the threat of frauds.
Bibliography
www.wikipedia.org
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www.wiki.answer.com
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