MANAGEMENT INFORMATION SYSTEM
DEFINITION
A
management information system (MIS) is a computerized database of financial
information organized and programmed in such a way that it produces regular
reports on operations for every level of management in a company. It is usually
also possible to obtain special reports from the system easily. A management
information system (MIS) focuses on the management of information technology to
provide efficiency and effectiveness or strategy decision making. The concept
may include systems termed transaction processing system, decision support
system, expert system, or executive information system. The concept is strongly
related to other areas such as information systems, information technology,
informatics, e-commerce and computer science. In other words, a management
information system is a branch of information systems (IS) that deals with the
provision of reports on organizational performance to help the middle
management to monitor and control the business.
THE CONCEPT OF A SYSTEM AND
INFORMATION SYSTEMS
A
system is a set of components (subsystems) that operate together to achieve
certain objectives. The objectives of a system are realized in its outputs. An
information system is a system that accepts data resources as input and
processes them into information output.
TYPES OF INFORMATION SYSTEMS
Management Information Systems
A
management information system is an information system that uses the data
collected by the transaction processing system and uses this data to create
reports in a way that managers can use it to make routine business decisions in
response to problems. Some of the reports that this information system creates
are summary, exception and ad hoc reports. All this is done to increase the
efficiency of managerial activity.
Transaction Processing Systems
A
transaction processing system
provides a way to collect, process, store, display modify or cancel
transactions. Most of these systems allow multiple transactions to take place
simultaneously. The data that this system collects is usually stored in
databases which can be used to produce reports such as billing, wages,
inventory summaries, manufacturing schedules, or check registers.
Decision Support Systems
A
decision support system helps make decisions by working and analysing data that
can generate statistical projections and data models. This system gives support
rather than replacing a manager’s judgement while improving the quality of a
manager’s decision. A DSS helps solve problems while using external data.
Expert Systems and Neutral Networks
An
expert system, also known as a knowledge-based system, is a computer system
that is designed to analyse data and produce recommendations, diagnosis and
decisions that are controlled. A neutral system uses computers to foster the
way a human brain may process information, learn and remember that information.
Information Systems in Organizations
This
information system collects stores and processes data to give organization real
time useful and accurate information. This information system encompasses data
gathering information from the people and machines that collect, process,
output and store data. Also in the networks that transmit and receive data and
the procedures that govern the way data is handled.
Components of an Information System
An
information system depends on the resources of people (end users and IS
specialists), hardware (machines and media), software (programs and
procedures), data (data and knowledge basis), and networks (communications media
and network support) to perform
Technology
Technology
can be thought of as the application of scientific knowledge for practical
purposes. From the invention of the wheel to the harnessing of electricity for
artificial lighting, technology is a part of our lives in so many ways that we
tend to take it for granted. As discussed before, the first three components of
information systems – hardware, software, and data – all fall under the
category of technology. Each of these will get its own chapter and a much
lengthier discussion, but we will take a moment here to introduce them so we
can get a full understanding of what an information system is.
Hardware
Information
systems hardware is the part of an information system you can touch – the
physical components of the technology. Computers, keyboards, disk drives,
iPads, and flash drives are all examples of information systems hardware
Software
Software
is a set of instructions that tells the hardware what to do. Software is not
tangible – it cannot be touched. When programmers create software programs,
what they are really doing is simply typing out lists of instructions that tell
the hardware what to do. There are several categories of software, with the two
main categories being operating-system software, which makes the hardware
usable, and application software, which does something useful. Examples of
operating systems include Microsoft Windows on a personal computer and Google’s
Android on a mobile phone
Data
The
third component is data. You can think of data as a collection of facts. For
example, your street address, the city you live in, and your phone number are
all pieces of data. Like software, data is also intangible. By themselves,
pieces of data are not really very useful. But aggregated, indexed, and
organized together into a database, data can become a powerful tool for
businesses. In fact, all of the definitions presented at the beginning of this
chapter focused on how information systems manage data. Organizations collect
all kinds of data and use it to make decisions.
Networking Communication
Besides
the components of hardware, software, and data, which have long been considered
the core technology of information systems, it has been suggested that one
other component should be added: communication. An information system can exist
without the ability to communicate – the first personal computers were
stand-alone machines that did not access the Internet. However, in today’s
hyper-connected world, it is an extremely rare computer that does not connect
to another device or to a network.
People
When
thinking about information systems, it is easy to get focused on the technology
components and forget that we must look beyond these tools to fully understand
how they integrate into an organization.
Process
The
last component of information systems is process. A process is a series of
steps undertaken to achieve a desired outcome or goal. Information systems are
becoming more and more integrated with organizational processes, bringing more
productivity and better control to those processes. But simply automating
activities using technology is not enough – businesses looking to effectively
utilize information systems do more. Processes are input, processing, output,
storage, and control activities that convert data resources into information
products.
