How to Design a Management Information System

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A manager’s job is complicated enough without having to record and remember every relevant employee detail on demand. Luckily, electronic software systems exist to help organize operational, financial and logistical information for all levels of the company. These software suites, called Management Information Systems (MIS), allow management to easily pull a report to get a snapshot of the company at that period in time.

Types of Management Information Systems

There are a number of different types of MIS, both by programming structure and intent and by end function or use. The types most frequently used in the workplace today include the following.

Process Control MIS

Process control systems control the actual physical processes and equipment in a manufacturing-type industry. The MIS records system and process variables and can provide summaries on production rates, upsets and efficiency ratings, and should also be able to identify when performance trends exceed a certain allowed deviation. This is critical information needed for operations management as well as procurement, inventory and sales.

Database Management Systems

These are systems that store a large amount of information along with critical variables involved to be used in the future. These databases can manage knowledge retention as well as current process or transactional history; they’re often used to hold a history’s worth of results from research, development, production and customer service, so that this data can be accessed at any time by new employees. While databases are often used to support other types of MIS, they also represent an effort to store information so that work doesn’t have to be repeated.

Transaction Processing Systems

This type includes systems for managing finances, accounting, inventory and the like. They record transactional actions that occur within and between these types of departments, and can provide reports capturing the company’s current status: for example, current inventory in a warehouse, the number of outstanding invoices or current spending within a certain budget. These reports should show the current state as well as trends over time to help management understand the transaction history and make decisions to help further internal operations.

Office Automation Systems

These systems look to streamline efficiency by automating repetitive tasks. This is meant to eliminate process bottlenecks and free up employee time for other critical work. OAS are often integrated with other types of systems (like transaction processing systems) to help improve overall workflow.

Human Resources Systems

HR systems are responsible for tracking attendance, paid and unpaid leave, benefits, payroll, legal compliance and other HR functions. This is often a large database integrated with process automation to enable employees to check their information, receive their pay or schedule time off with minimal human interaction. HR reports look at the personnel map in a number of ways and can track absentee reports or employee satisfaction measures.

Enterprise Resource Planning Systems

This sort of software connects a number of individual databases and systems together so that information flows from module to module in a timely and efficient matter. These systems are used to link production, inventory, accounting, sales and so on, so that everyone is looking at the same live information and can make decisions together.

Decision Support Systems and Executive Information Systems

These are two types of management-specific systems to assist with decision-making. A DSS will gather data from internal as well as external sources to help a manager understand the context of a situation and make informed decisions. An EIS will quickly provide data from any department or level of the organization, in a simple format, to an executive manager who needs this information.

Keep in mind that all of these types of systems can vary from comprehensive packages purchased through another company to small, internal, home-grown systems that were constructed as needed. The larger MIS available on the market come pre-built with a support team and use proven methods, but are often expensive and generic. Creating an EIS internally means the system can be built for the specific needs of that business, but can leave users locked into old processes and can be hard to maintain over their useful life.

5 Steps in Designing MIS

In order to design an effective MIS, it’s important to understand the stages MIS system design will go through as it becomes a part of daily business. Information systems usually follow a standardized cycle moving from concept to final product.

  1. Planning: The first step involves preliminary planning, which includes obtaining a full understanding of the gaps the business is looking to fill, evaluation of alternative solutions and the development of a preliminary budget and timeline to allocate resources if and when needed. The planning stage helps the business make its final decision and prepares the company for the upcoming project.

  2. Analysis: This step analyzes the plan and begins to create a list of specifications and requirements the system will have to meet. Here functions are spelled out, communication protocols are established and a picture can be built of the end product. Often, work moves back and forth between the analysis and planning stages, when the potential system requirements hit a wall with regards to budget or schedule, so that the final picture can be agreed on by everyone.

  3. Design: This is the actual development stage. The team will come together and begin to build the code, databases and functions that will power the MIS as needed and required by the previous stages. This stage also includes extensive testing, first by the development team and then by the real users, to determine whether things are working as expected. 

  4. Implementation: This stage begins with formal testing and troubleshooting of the entire system before the new MIS goes live. Once the system has been accepted, integration into the existing day-to-day workload begins. In larger, more extensive systems, deployment may happen by module or by department; for smaller systems, implementation can go live all at once. 

  5. Maintenance: The final stage involves monitoring the system to keep it current and functional. Users will report bugs or problems with the system, which the customer service support team will need to address. This stage should include extensive documentation for future users. It also often includes an evaluation of the workplace before and after, to ensure the system is meeting expectations; ongoing evaluations and new development are necessary to ensure the system does not become obsolete.

Moving Through the MIS Cycle

When moving through this cycle, it’s important that the developers spend as much time as possible with the actual end-users who will be managing inputs and making use of functions on a day-to-day basis. Determine who, exactly, will be using this information system and what sorts of permissions they’ll need in their role(s) to do this work; ensure access to relevant information while avoiding conflicts of interest in roles.

It’s important to understand the real issues employees are looking for an MIS to solve; otherwise, developers can spend a good deal of time and money creating a function that isn’t actually what was needed. Management may be focused on the end result — the reporting function that will give them what they need for decision-making — but in order to make sure that information is real and valid, the individual users need to be able to do their jobs properly using the system. The only way to ensure reporting will be accurate is to be sure that the information going into the system is also accurate.

Pieces of the MIS

Management information systems are built on a set of components that will determine the system’s end performance. These pieces work together to define the capability and constraints of the MIS for the organization.

  • Computer hardware: The physical devices that work with the system, including processors, monitors, keyboards, mobile devices and so on. The quality of these physical devices will affect visual and physical output, ease of use and overall system durability.

  • Computer software: The programs that tell the hardware what to do. This includes both the operating system that functions as the foundation and individual application software, which manages the functions built into the system.

  • Databases: The places where data is stored in systematic files, tables and other forms. Databases should be designed for meaningful queries that can quickly obtain specific information. These virtual databases can grow incredibly large depending on the types of information stored.

  • Networking: The components that connect the computer hardware to the intranet (connections within the company) and the internet, either via physical cables or through wireless connections. These telecommunications connections allow remote locations to access the hardware, software and databases through the type of networking chosen.

  • Procedures: The set of commands, in order, that will combine the pieces listed above and enable users to obtain their expected outputs. The procedures will allow the system to process queries, access databases and return the desired information to the end-user.

  • People: Personnel isn’t always considered as a component of MIS, but the truth is, procedures are only as good as the individuals that use them. Proper training will ensure that the people using the database understand the procedures, follow them correctly and make the proper inferences based on the data reports they receive.

Investment and Quality

Each of these pieces will require investment to ensure quality and ease of use. It can be easy to budget a lump sum for an entire system, but it’s more useful to break out pieces to be used on each of the components. Again, the quality of every piece will affect the output, but resources are never infinite, so it’s important to invest in the pieces that will give the most significant reward.

Using the MIS

One of the key points to understand about a management information system is that it can provide advantages on many levels, not just for management. Of course, with these types of systems, one of the most important priorities is the ability for managers to quickly pull accurate information into a report that’s easy to understand; these functions are obvious endpoints. However, when implementing this type of system, there can be benefits for other departments as well.

MIS and other information management systems often introduce useful levels of automation that may not have been available before. This frees up valuable employee time to focus on more long-term, strategic work, rather than continually executing mundane and repetitive tasks. It can also help employees better understand their own roles by accessing information around them; for example, operations employees may get a better understanding of the process if they can watch other portions of the production process through their own screen, or sales employees may gain a better understanding of production by watching inventory levels.

Management information systems can be time-consuming to design and difficult to implement, but they carry a number of significant benefits for any business. With many commercial options available and internal development always an option, it makes sense to examine them in the context of any growing company.

References

About the Author

Danielle Smyth is a writer and content marketer from upstate New York. She has been writing on business-related topics for nearly 10 years. She owns her own content marketing agency, Wordsmyth Creative Content Marketing (www.wordsmythcontent.com) and she works with a number of small businesses to develop B2B content for their websites, social media accounts, and marketing materials. In addition to this content, she has written business-related articles for sites like Sweet Frivolity, Alliance Worldwide Investigative Group, Bloom Co and Spent.