Answer to Question #179200 in Management for AMIT VIKAS MALKAR

Question

. Tanishq Jewellers want to set up MIS in their organization in order to manage the information better across the organization. Can you guide them about the same along with the characteristics, components, advantages and limitations? 

Answer 1

Management Information System in an Organization

Management information system (MIS) is a collection of integrated systems, both manual and computerized that provide an organization’s decision-makers with information concerning operational activities. As Tanishq Jewellers want to set up an MIS in their organization, they will be enabled with activity support which will occur through efficient data processing and effective information supply to relevant people within the specified time.

To help the organization manage the information better, MIS consists of five major components that must work together to achieve the organization’s objectives. These components include:

Ø People; these are the users such as the ICT department staff, accountants and human resource managers who operate the information system to perform daily transactions.

Ø Business procedures; these are best practices guiding users on how to work efficiently.

Ø Data; these entail the daily recorded business transactions and information collected from different operational activities.

Ø Hardware; it consists of computers, networking devices and printers which provide the computing power, printing capabilities and networking for data processing.

Ø Software; refers to programs running on the hardware and it consists of system software such as the operating system and application software such as banking system.

While MIS has an essential role in an organization, it has generic characteristics which must be considered before its adoption. These characteristics are:

Ø System approach; in which the information systems should follow a holistic approach and consider its performance in the light of the constituted objectives.

Ø Management oriented; MIS must follow a top-down approach which suggests that the development should start from the determination of management needs.

Ø Need-based; this dictates that the development should be according to the manager’s information needs at different levels and cater for specific needs.

Ø Future oriented; the MIS should provide information based on future projections and the actions to be initiated.

Ø Central database; as MIS requires access to master files, it is important to gather data once, process properly and store in a central database where it can be accessed by other subsystems.

A good MIS can not only be used for data storage but also supports management analysis therefore providing several advantages to the organization. Some of these benefits are:

Ø Increases customer satisfaction ensuring operational excellence.

Ø Enhances acquisition of sufficient and quality information.

Ø Improves operational flexibility and efficiency.

Ø Managers can get feedback concerning their business performance and cement customer relations.

Ø Improves decision-making process which models business products and services to profits the organization.    

Nevertheless, the implementation of MIS can have limitations such as:

Ø High cost; where the development of information systems can be costly due to technological changes which require regular upgrades.

Ø Maintenance; when problems arise and the system crashes it might lead to information loss.

Ø Employee training; as it is difficult to stay relevant in the market with unskilled employees, they need to be trained on how to use the information system at the expense of the organization.