A management information system (MIS) is designed by an organization for its smooth functioning. The MIS, a decision-making instrument used by top management, comprises of a set of controls. These controls cover the basic spheres of the business: its people, technologies, policies and procedures. The MIS gathers information on all the important realms of the business, tabulates the information and provides meaningful reports.
The management information system presents data such as the organization’s processes, operating procedures, internal controls and audit preparation, which the management uses to make effective and efficient decisions. The internal controls for each department contain guidelines for operation. The flow of work assigned to employees, their responsibilities and duties, for example, are listed under internal controls.
An organization benefits immensely by using an MIS. This fully automated system enables the organization to record, process and tabulate all of its business dealings and transactions. Also, the information collected makes it possible to make necessary changes and improvements to the gaey areas. For example, the organization can compare actual and projected sales and take steps to correct any deviations.
By using a good MIS, the top management of the organization is able to make informed decisions. The data present in the MIS is studied and analyzed objectively and the organization is able to choose the best trade-off for its operations, sales and other functions. Also they can judge whether their resources are being used correctly.
MIS facilitates a two-communication process in the organization. The top management communicates to its employees what is expected of them and how they must accomplish the tasks entrusted. The employees in turn freely discuss their problems and concerns.
There are four types of MIS. The first one, TPS (Transaction Processing System), is the most elementary. This methodology processes routine, mundane and recurring business transactions. OIS (Operations Information Systems) gathers comprehensive data and tabulates it for operations managers to use and maximize their output and minimize losses. DSS (Decision Support Systems) and ES (Expert Systems) are the two types of MIS used by the top management to make informed and intelligent decisions. The two types make extensive use of databases and modeling techniques
MIS is heavily technology driven and therefore lacks a human element. The information represented by the MIS is often rich in nature. The expertise of humans is needed to analyze the information presented and to make decisions accordingly.
Developing an MIS costs money. Usually the organization requires the help of a consultant to develop the system, therefore all the organizational procedures and controls have to be carefully and elaborately spelled out to the consultants.