Management Information Systems

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What is an MIS?

An organisation's management information system is one that takes in both internal and external data and then converts that data into useful information that allows management to make decisions.

Organisations need information to make decisions. The type of information they need will depend on the purpose and role of the organisation.

Certain companies such as supermarkets have millions of customers and will hold large amounts of data as a result.

To handle the large amount of information, the data needs to be:

Summarised

Collated

Graphed and charted

Trends need to be noted

Competitor actions need to be understood

Opportunities and threats need to be discussed

These actions are handled by a management information system (MIS).

The MIS consists of two parts:

Computer systems that hold, analyse and present data

Analysts that can make sense of the information as well as understanding what needs to be collected

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Creating an MIS

An organisation will have someone responsible for the gathering of data in order to help management make decisions.

This can be a single person keeping a sales spreadsheet up to date or it may even be an entire department with a team of analysts and a manager along with a huge data information system supporting them.

An MIS needs to address these points:

What decisions do management need to make

How often do they need to support those decisions

What information do they need to support those decisions

What systems need to be in place to handle the data

What staff need to be in place to make sense of the data

What training and expertise do they need to be efficient

What are the standard reports needed

What budget is available for the MIS and its maintenance

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How an MIS is organised

Data Gathering

Collect internal data (e.g. staff, costs)

Collect external data (e.g. market prices)

Data Retention

Databases to retain data

Presentation layer (e.g. tables, graphs)

Extract Information

Collate and summarise information

Management makes decisions

Every MIS needs to have a means of gathering data. Systems then need to be in place to retain that data.

The data system should include facilities to present data in a human friendly manner such as tabulation and graphing.

The MIS staff will then collate reports in an agreed standard format. They will also put reports together as required.

Management will eventually be presented with the information and make decisions based upon it.

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School Administration: MIS

Hundreds of students will attend a school, so electronic records need to be kept for every student.

Details stored are likely to include:

Student name

Home contact details and emergency contacts

Date of birth

Medical information such as allergies, serious illnesses

Links to school attendance records

Links to class registers

The system is able to summarise data for the senior management team in the school:

Class attendance record over time

Examination results

Trends in students being off ill

The team will improve the way the school works based on this information and to address any problems they are made aware of, such as a rise in truancy.

International Car Company

A car company sells vehicles in dozens of countries around the world. Two factories make the cars. It is the management teams task to:

Maximise profits and sales in every market

Keep the factories as busy as possible

Keep stocks at the optimum level

Respond to market threats such as competing car makers

They have an MIS department dedicated to providing weekly information on sales, stock levels, seasonal trends, best selling product, worst selling product etc.

Use of an MIS

Sales are trending down in the USA because our prices are not competitive.

Do we start a marketing campaign to boost sales or can we afford to drop our prices.

There is going to be a VAT hike in March. When this happened before, sales peaked just before the deadline as customers wanted to save money.

Do we need to temporarily ramp up production. Can our suppliers deal with the short term demand.

Blue cars are proving to be 30% more popular than red cars in the market.

Do we need to change the colour mix of our cars going into stock.

One of our factories is running at only 10% capacity. We are not making profit.

Do we need to shut down a factory. Can one factory cope with future sales.

We are paying our staff 10% less than industry norms. Staff turnover is increasing.

What benefit do we need to put together to retain our best staff.

The MIS is providing high level information to management. It takes huge amounts of incoming data and extracts trends and conclusion from it.

An MIS department deals with facts not personal opinions. The facts are presented to management, then it is up to them to make a decision based on those facts.

The UK 'Office for National Statistics' is an MIS organisation. They are independent from the political parties. They present raw, verifiable facts, it is up to government parties to put a political on the information.

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Expert System

An expert system contains a store of knowledge and a number of rules that apply to that knowledge.

The expert system allows questions to be asked and it then provides one or more solutions. Some expert systems may also give a reason for each solution.

In this case the expert system can be used as a decision-making tool. The analyst sets up a number of 'what-if' questions and the system then provides one or more solutions.

Quite often the expert system is there to provide assistance to the user rather than make a final decision.