A management information system (MIS) provides information that organizations require to manage themselves efficiently and effectively. Management information systems are typically computer systems used for managing. The five primary components: 1.)Hardware 2.)Software 3.) Data (information for decision making), 4.) Procedures (design,development and documentation), and 5.) People (individuals, groups, or organizations). Management information systems are distinct from other information systems because they are used to analyze and facilitate strategic and operational activities.
[laudom] and Jane Laudon identify five eras of Management Information System evolution corresponding to the five phases in the development of computing technology: 1) mainframe and minicomputer computing, 2) personal computers, 3) client/server networks, 4) enterprise computing, and 5) cloud computing.
The first era (mainframe and minicomputer) was ruled by IBM and their mainframe computers; these computers would often take up whole rooms and require teams to run them - IBM supplied the hardware and the software. As technology advanced, these computers were able to handle greater capacities and therefore reduce their cost. Smaller, more affordable minicomputers allowed larger businesses to run their own computing centers in-house.
The second era (personal computer) began in 1965 as microprocessors started to compete with mainframes and minicomputers and accelerated the process of decentralizing computing power from large data centers to smaller offices. In the late 1970s minicomputer technology gave way to personal computers and relatively low cost computers were becoming mass market commodities, allowing businesses to provide their employees access to computing power that ten years before would have cost tens of thousands of dollars. This proliferation of computers created a ready market for interconnecting networks and the popularization of the Internet.
As technological complexity increased and costs decreased, the need to share information within an enterprise also grew—giving rise to the third era (client/server), in which computers on a common network access shared information on a server. This lets thousands and even millions of people access data simultaneously. The fourth era (enterprise) enabled by high speed networks, tied all aspects of the business enterprise together offering rich information access encompassing the complete management structure.Every computer is utilized.
The fifth era (cloud computing) is the latest and employs networking technology to deliver applications as well as data storage independent of the configuration, location or nature of the hardware. This, along with high speed cellphone and wifi networks, led to new levels of mobility in which managers access the MIS remotely with laptop and tablet computers, plus smartphones.
Most management information systems specialize in particular commercial and industrial sectors, aspects of the enterprise, or management substructure.
Management information systems, produce fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems to middle and operational level managers to identify and inform structured and semi-structured decision problems.
Decision Support Systems (DSS) are computer program applications used by middle and higher management to compile information from a wide range of sources to support problem solving and decision making.DSS is majorly used for semi-structured and unstructured decision problems.
Executive Information Systems (EIS) is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting, human resources and operations.
Office Automation Systems (OAS) support communication and productivity in the enterprise by automating work flow and eliminating bottlenecks. OAS may be implemented at any and all levels of management.
Enterprise Resource Planning facilitates the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.
The following are some of the benefits that can be attained for different types of MISs.
Companies are able to highlight their strengths and weaknesses due to the presence of revenue reports, employees' performance record etc. The identification of these aspects can help the company improve their business processes and operations.
Giving an overall picture of the company and acting as a communication and planning tool.
The availability of customer data and feedback can help the company to align their business processes according to the needs of the customers. The effective management of customer data can help the company to perform direct marketing and promotion activities.
MISs can help a company gain a competitive advantage. Competitive advantage is a firm’s ability to do something better, faster, cheaper, or uniquely, when compared with rival firms in the market.
Enterprise systems—also known as enterprise resource planning (ERP) systems—provide integrated software modules and a unified database that personnel use to plan, manage, and control core business processes across multiple locations. Modules of ERP systems may include finance, accounting, marketing, human resources, production, inventory management, and distribution.
Supply chain management (SCM) systems enable more efficient management of the supply chain by integrating the links in a supply chain. This may include suppliers, manufacturers, wholesalers, retailers, and final customers.
Customer relationship management (CRM) systems help businesses manage relationships with potential and current customers and business partners across marketing, sales, and service.
Knowledge management system (KMS) helps organizations facilitate the collection, recording, organization, retrieval, and dissemination of knowledge. This may include documents, accounting records, unrecorded procedures, practices, and skills. Knowledge management (KM) as a system covers the process of knowledge creation and acquisition from internal processes and the external world. The collected knowledge is incorporated in organizational policies and procedures, and then disseminated to the stakeholders.
Conversion is the process of changing or converting the old system into the new. This can be done in three basic ways, though newer methods (prototyping, Extreme Programming, JAD, etc.) are replacing these traditional conversion methods in many cases:
Direct cut – The new system replaces the old at an appointed time.
Pilot study -– Introducing the new system to a small portion of the operation to see how it fares. If good then the new system expands to the rest of the company.
Phased approach – New system is introduced in stages.
^ abO’Brien, J (1999). Management Information Systems – Managing Information Technology in the Internetworked Enterprise. Boston: Irwin McGraw-Hill. ISBN0-07-112373-3.
^Laudon, Kenneth C.; Laudon, Jane P. (2009). Management Information Systems: Managing the Digital Firm (11 ed.). Prentice Hall/CourseSmart. p. 164.
^Transaction processing systems (TPS) collect and record the routine transactions of an organization. Examples of such systems are sales order entry, hotel reservations, payroll, employee record keeping, and shipping.
^Bidgoli, Hossein, (2004). The Internet Encyclopedia, Volume 1, John Wiley & Sons, Inc. p. 707.
^Pant, S., Hsu, C., (1995), Strategic Information Systems Planning: A Review, Information Resources Management Association International Conference, May 21–24, Atlanta.