Management Information system, Types, advantages and Enterprise Applications

A management information system (MIS) is a system that provides information needed to manage organizations effectively.^[ Management information systems involve three primary resources: technology, information, and people. It's important to recognize that while all three resources are key components when studying management information systems, the most important resource is people^{[according to whom?]}. Management information systems are regarded as a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization^] Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.^[2]

Overview

Initially in businesses and other organizations, internal reporting was made manually and only periodically, as a by-product of the accounting system and with some additional statistic(s), and gave limited and delayed information on management performance. Previously, data had to be separated individually by the people as per the requirement and necessity of the organization. Later, data was distinguished from information, and so instead of the collection of mass of data, important and to the point data that is needed by the organization was stored.
Earlier, business computers were mostly used for relatively simple operations such as tracking sales or payroll data, often without much detail. Over time, these applications became more complex and began to store increasing amount of information while also interlinking with previously separate information systems. As more and more data was stored and linked man began to analyze this information into further detail, creating entire management reports from the raw, stored data. The term "MIS" arose to describe these kinds of applications, which were developed to provide managers with information about sales, inventories, and other data that would help in managing the enterprise. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications, Enterprise Resource Planning (ERP), Enterprise Performance Management (EPM), Supply Chain Management (SCM), Customer Relationship Management (CRM), project management and database retrieval applications.
"The five eras are general-purpose mainframe and minicomputer computing, personal computers, client/server networks, enterprise computing, and cloud computing."(Management Information Systems: Managing the Digital Firm, 11th Edition. Prentice Hall/CourseSmart, 12/30/2008. p. 164). The first era 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. By 1965 microprocessors began to take the market away from mainframe computers. This technology allowed small desktop computers to do the same work that it previously would have taken a room full of computers. This also decentralized computing power from large data centers to smaller offices. In the late 1970s minicomputer technology gave way to personal computers, now for a relatively low cost anyone could have a computer in their own home. This allowed for businesses to give their employees access to computing power that 10 years before would have cost tens of thousands of dollars. This proliferation of computers also helped create a need to connect these computers together on a network giving birth to the internet. As technology has increased and cheapened the need to share information across a large company had also grown, this gave way to the client/server era. With this era computers on a common network were able to access shared information on a server. This allows for large amounts of data to be accessed by thousands and even millions of people simultaneously. The latest evolution of Information Systems is cloud computing a recent development, cloud computing lets users access data stored on a server, where they can not only see the data but also edit, save, download or upload. This along with high speed networks has led to a much more mobile view of MIS. In cloud computing the manager does not have to be at a desk to see what their employees are working on but instead can be on a laptop, tablet pc, or even smartphone.
An 'MIS' is a planned system of the collection, processing, storage and dissemination of data in the form of information needed to carry out the management functions. In a way, it is a documented report of the activities that were planned and executed. According to Philip Kotler "A 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.
The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making. The area of study called MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science. IT service management is a practitioner-focused discipline. MIS has also some differences with ERP which incorporates elements that are not necessarily focused on decision support.
The successful MIS must support a business's Five Year Plan or its equivalent. It must provide for reports based upon performance analysis in areas critical to that plan, with feedback loops that allow for titivation of every aspect of the business, including recruitment and training regimens. In effect, MIS must not only indicate how things are going, but why they are not going as well as planned where that is the case. These reports would include performance relative to cost centers and projects that drive profit or loss, and do so in such a way that identifies individual accountability, and in virtual real-time.
Anytime a business is looking at implementing a new business system it is very important to use a system development method such as System Development Life Cycle. The life cycle includes Analysis, Requirements, Design, Development, Testing and Implementation.

Types of Information Management Systems

There are many types of information management systems in the market that provide a wide range of benefits for companies.

• 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.

• Management information systems (MIS) produce fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems (TPS) to middle and operational level managers to provide answers to structured and semi-structured decision problems.

• Decision-support systems (DSS) are computer program applications used by middle management to compile information from a wide range of sources to solve problems and make decisions.

• Executive support systems (ESS) 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.

Advantages of Information Management Systems

The following are some of the benefits that can be attained for different types of information management systems^] (1)The company is able to highlight their strength and weaknesses due to the presence of revenue reports, employee performance records etc. The identification of these aspects can help the company to improve their business processes and operations. (2) The availability of the 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. (3)Information is considered to be an important asset for any company in the modern competitive world. The consumer buying trends and behaviors can be predicted by the analysis of sales and revenue reports from each operating region of the company.

     Enterprise Applications

• Enterprise systems, also known as enterprise resource planning (ERP) systems provide an organization with integrated software modules and a unified database which enable efficient planning, managing, and controlling of all 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, manufacturer, 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, and unrecorded procedures, practices and skills.

Developing Information Systems
"The actions that are taken to create an information system that solves an organizational problem are called system development (Laudon & Laudon, 2010)". These include system analysis, system design, programming, testing, conversion, production and finally maintenance. These actions usually take place in that specified order but some may need to repeat or be accomplished concurrently.
System analysis is accomplished on the problem the company is facing and is trying to solve with the information system. Whoever accomplishes this step will identify the problem areas and outlines a solution through achievable objectives. This analysis will include a feasibility study, which determines the solutions feasibility based on money, time and technology. Essentially the feasibility study determines whether this solution is a good investment. This process also lays out what the information requirement will be for the new system.
System design shows how the system will fulfill the requirements and objectives laid out in the system analysis phase. The designer will address all the managerial, organizational and technological components the system will address and need. It is important to note that user information requirements drive the building effort. The user of the system must be involved in the design process to ensure the system meets the users need and operations.
Programming entails taking the design stage and translating that into software code. This is usually out sourced to another company to write the required software or company’s buy existing software that meets the systems needs. The key is to make sure the software is user friendly and compatible with current systems.
Testing can take on many different forms but is essential to the successful implementation of the new system. You can conduct unit testing, which tests each program in the system separately or system testing which tests the system as a whole. Either way there should also be acceptance testing, which provides a certification that the system is ready to use. Also, regardless of the test a comprehensive test plan should be developed that identifies what is to be tested and what the expected outcome should be.
Conversion is the process of changing or converting the old system into the new. This can be done in four ways:
Parallel strategy – Both old and new systems are run together until the new one functions correctly (this is the safest approach since you do not lose the old system until the new one is “bug” free).
Direct cutover – 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.
Anyway you implement the conversion you must document the good and bad during the process to identify benchmarks and fix problems. Conversion also includes the training of all personnel that are required to use the system to perform their job.
Production is when the new system is officially the system of record for the operation and maintenance is just that. Maintain the system as it performs the function it was intended to meet.