Management information systems employ information technology to collect and communicate all the information a company or institution uses to operate. Each department or function of an organization produces its own operational and financial data and as a result has its own information system to keep track of it all. There are as many types of management information systems as there are departments or functions in an organization, but there are a few specific systems that almost every organization or institution needs for the whole entity to operate smoothly.
Management Reporting System
A management reporting system is a database designed to report on the finances and operations of all levels of management in an organization. A company's management reporting system is commonly used by middle managers to generate regular reports comparing current and past financial performance to determine financial growth and to track how the middle managers themselves are performing. Upper management uses the data generated by the reporting system to compare the company's current financial position and its efficiency of operations against its predetermined goals for the company.
A process control system monitors a business's physical or industrial processes such as metal fabrication, petroleum processing or automobile assembly. The control system is constantly collecting data and is programmed to generate regular reports on system performance. A manager looks to the process control reports to tell how often, over the course of a set period of time, a particular event occurs during the production process, or how often over that period of time the company deviated from a repetitive production process. This information is key to tracking the overall efficiency of production and the safety of machinery and employees.
Sales and Marketing
A sales and marketing system supports management in executing and tracking the effectiveness of the organization's sales and marketing functions. These include:
- developing products
- forecasting sales
- compiling and tracking the advertising outlets and schedules
- managing distribution channels
- pricing, discounts and promotions
- implementing effective advertising and sales promotions
Reports also tell managers which items are selling and which aren't and how well each individual product in the company's inventory is selling at each retail location.
The inventory control system tracks everything having to do with inventory, including sales, spoilage, theft, and inventory on hand, which allows management to determine when individual items are getting low and need restocking, either in the company's warehouse or in any of its individual retail locations. It tracks movement of inventory into the warehouse, from warehouse to store, store sales and returns.
Accounting and Finance
An accounting and finance system tracks an organization's assets and investments and compiles all data for financial reporting required by law for such functions as payroll, federal, state, and local taxes and pension funds. This system provides all the reports necessary for periodic financial audits and annual reports if the organization or institution produces them. The accounting and finance system also facilitates the daily posting of routine transactions such as sales income, returns and bank deposits and transfers. All monthly financial statements, such as the balance sheet and the profit and loss statement, are generated from this system. These statements are necessary for middle and upper managers to track current financial success against past performance and against predetermined goals for future growth.
A human resources information management system supports the daily management and tracking of employees and recruiting. These systems track some financial elements of human resources that overlap the accounting and finance system such as payroll, benefits and retirement, but the human resource system is much more than that. It can streamline communication between employees and HR by providing an electronic hub for HR policies, legal compliance notices and mandatory training events. It can automate employee timekeeping, track work attendance, calculate available and used leave and let employees request vacation or sick leave, all without a manager's physical involvement. The recruiting function is also automated through the human resources management system through resume collection and analysis for identifying qualified potential hires.
Office Automation/Enterprise Collaboration
An office automation, or enterprise collaboration, information management system enables managers to control the flow of information throughout the organization. Any electronic communication device or medium used in the organization by managers to communicate with other managers, with their employees, or for employees to communicate with each other falls under the umbrella of the office automation information system. These devices and media can include land-line phones, cell phones, Internet, Intranet, multimedia, voice mail and email, file sharing and video conferencing.