What is a Management Information System?
Anything data that can be made sense of or interpreted in a meaningful way is information. This means that the data’s purpose and source have to make sense. To make an Information System, there has to be a specific purpose. This means that an Information System must make sense to someone like a system analyst. The specificity of making sense to a system analyst is what makes it an Information System. It goes without saying that different types of Information Systems are created and suited to the different purposes that they are created for.
Now, in the case of a Management Information System, the purpose is clearly understood. It is the need to create a solution for more effective and efficient management. So, a Management Information System is built to help:
1. Evaluate data - Sort through large amounts of data to seek and identify what is valuable information.
2. Analyze data - Glean all useful information from all the sorted data procured during the evaluation process.
3. Processing the data- The data needs to be computed and processed for it to finally make sense for analysis.
Once the data has undergone the above steps; it is finally ready for use. The information gathered can now be used to help the management of a business take decisions based on accurate and meaningful data. This will not only help the business in making the right decisions and adjustments to adapt to an evolving market; it also allows them to make informed projections and fast track the growth of the company.
The use of Management Information System in a business
Today, a majority of industries are trending towards a shift to automation. With more and more business processes becoming automated, information is the best tool we have to control, evolve and improve these automated processes to gain fine margins and ensure business growth. The ability to access information can determine the fate of businesses.
Being able to capably access and process information can mean that the business can keep pace with the market. The management information system built for a particular business can effectively help the business to collect and store data without being dependent on an external source or industry study for information. The liberty and complete access to this information and its use can then ensure smarter business decisions, through the pre-determined and automated reporting of the data.
So how does a business use all this information gleaned from its activities? The primary use of this information can be broken down into a few main ways in which businesses make use of it:
1. Decision-Making - It goes without saying that the first and biggest incentive for a business to use an information system is to help in its decision-making. Operations research and management science through a management information system help assess and evaluate the impact of the market and competition on the entire business structure. This puts a very high onus on management to ensure that every decision with regards to the business is made using the right information.
2. Performance Measuring - There is no other way for a business to measure growth, stagnation or decline than to use information. Every business has its key metrics which are used to analyze basics like the cost of operations, the volume of business and profitability.
3. Creating Business Plans - Businesses operate with an eye towards the future, and if you are planning for the future, you need a lot of information. Assets and liabilities play a huge part in planning, as do things like market trends, suppliers, competition, emerging technologies, customer base preferences and a whole host of other information.
Clearly, with a multitude of factors involved, it would be hard not to bank heavily on information and information systems to make sound and practical plans for a business.
4. System of Recording and Filtration - You need all the raw data you can get as a business so that the information derived from it is as diverse as possible. At the same time, it needs to be specific to your organizational needs and business. The information has to be recorded for operations and good business practice purposes as well. The information stored then has to be filtered before being shared with higher-level management. This ensures optimal and strategic use of information. And on a basic level, it increases efficiency.
A good Management Information Supply can standardize information in the form of reports for management. In short, an MIS is a broad class of information systems designed to provide the information needed by businesses for effective decision making.
The couple chain management consists of several smaller operations which make the whole. A supply chain is created to reduce overall costs for businesses by understanding and predicting demand using information systems.
Supply Chain Management Information
The supply chain then matches the demand by managing resource supply. The information flow is crucial in the entire process and helps improve not only business health but also customer satisfaction.
Some of the components of the supply chain are:
2. Supply of raw materials
3. Operation management and integration
4. Information technology
For a supply chain management system to be effective, it must be a system which can easily incorporate and ensure the smooth functioning of a management information system. The information and analysis provided by the information system should be featured as a key part of the supply chain. The programs and methods used for this should be able to easily factor in a management information system that is part of its processes. And finally, the data has to be up to date and relevant to the key functions of a business and cover important supply chain aspects such as suppliers and customers, cost of production, transportation, inventory and price of goods.