How to Develop a Management Information System

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One of the most critical aspects of a modern company’s operations process is its management information system. Also known by the acronym MIS, these systems are databases that take in information and provide useful reports based on this information. MIS are essential for many companies, but they can be less useful if not tailored specifically to your needs. At the end of the day, however, developing your own MIS may prove to be the most cost-effective way to manage your company’s information over the long haul.

Management Information Systems Definition

Databases, specifically, MIS databases, hold organizational and fiscal information in a manner that makes it easy to produce reports that speak to your business operations. Because these databases are developed to respond to a language known as SQL (structured query language), anyone who knows how to ask the database for something can generate a report.

What is SQL?

SQL is fairly simple to understand when you break it down into its component parts. Because the database is a programmed system, it must have questions formed in a specific (structured) manner to elicit the desired response. Think of it as the language that the database is speaking. It does not know any other language, so you must adapt how you ask your question to suit the language that it understands.

Queries, otherwise known as "asks," are what you need to know. When you approach a database to get a question answered, you must first understand what kind of information that the database holds; obviously, if you are looking at an MIS for data that isn't there, you will not get your question answered. Similarly, if you submit a query, you should make sure that the MIS understands what you are requesting, or the data you receive won’t answer your question.

The database can only speak in one specific language. The simple language that it understands makes it easy to adjust with new information on a daily or even by-the-minute basis. Unless you approach your MIS with the correct language, it won't know what you're trying to get it to do.

MIS Options for Businesses

A database like an MIS is a collection of data that can be adjusted, organized and analyzed by a computer. High-octane MIS systems may require whole mainframe rooms to run at optimal efficiency.

Management information systems do not have to be this large or complex, however. Small companies can even find MIS freeware online that would allow them to operate a simple database ledger. If you are working for yourself, products like Excel or Google Sheets could also serve the same purpose.

Imagining your MIS as an electronic spreadsheet may help you to visualize what a database is: every cell that holds information is storing it in the same way that your database will. An MIS can be, however, as exhaustive as they are programmed to be and thus are not limited in the scope of their reports. You can track your top output performers, adjust time cards and track employee time. Some management information systems also allow you to designate access levels to your system.

Importance of MIS

Management information systems are vital because they provide company data that is needed by senior administrators, boards of directors and even lower-level managers, to inform how they will run the business. MIS can identify your most productive employees, outline your operational costs, determine fiscal accomplishments and detail any shortfalls that your company may currently have. Effective MIS take in, evaluate, organize and analyze useful data on a schedule or on-demand to the people who need it to inform business decisions. Carefully selected parameters must be given to the MIS for this to work effectively for your business.

Development of Management Information Systems

If you are attempting to develop your own MIS from scratch, you may want to start with a pen and paper or a whiteboard to begin the process of collecting information for your database. You should list all of the departments that are within your company. Make sure to include departments that you may develop in the future.

For example, if you are currently not a large enough company to have an HR department, you should still include human resources in your management information system. Once the information is in your MIS’s language, it can process reports for your human resources team once your company is large enough to require one. You want to include everything that you can think of when you are pulling departments. Do you have administrators for divisions or departments?

Determining Access Clearance and Reviewing

Once you have every department outlined to the best of your abilities, then you can begin to work on access clearance. The best MIS allows employees of various levels to generate reports that can assist them in their day-to-day operations. You want to ensure that the data provided to lower-level managers can help them succeed without confusing them. Regular check-ins with your staff will be invaluable during your MIS development.

Additionally, one of the most important steps in designing management information systems is to review your work with a group of people that also have a stake in your company. The people who review information from the MIS could be anyone from stakeholders to your regular line employees. You want the people who are looking at this information to provide you with insight. The reviewers should help you find out what data is missing for them, as well as suggest redundant or unnecessary information.

Finalizing Your Operational Plan

After a complete review, you will finalize your operational plan. The plan outlines what data will be collected, how that data is collected and how often it is pulled. Your operational plan should explain how data will be processed and how to preserve sensitive data. The MIS employees who will have critical roles in accessing and maintaining your database should also be listed.

  • Proper Planning — Your system must have research behind it, so it can take a long time to ensure that your MIS planning is complete. 
  • Management of Information — Remember that your management information system will need to manage your inputs, codify and store data in specific places and generate reports.
  • Support — Any good MIS provides support for management in regards to planning and critical decision-making data. 

System Design and Outsourcing

Unless you are comfortable with your databasing skills, you will need to hire a developer or software designer to set up your MIS. The system designer will take strategic actions based on the information that you’ve collected for them. The next step in the process is your development strategy.

Your system designer will select an approach to developing your MIS. When we discuss the “approach", what we mean is how the system will understand your queries and how to store data. You can think of it in terms of operations over function or analytics over accounting, depending on what is important to you.

The designer also needs to know what resources they have available to them to assist in the build of your management information system. Do you have in-house programmers, or will you need to have contractors brought on-site? Once the language and resources are understood, the developer can then begin programming in data priority rankings.

Information System Requirements

There are numerous ways to go about developing an MIS for your company. The ways to determine what your requirements are for improving your management information system are also called methodologies. While you are also able to develop your processes, there are several common ways to plan systems you might choose to follow.

IBM’s Business Systems Planning

Also known by the acronym BSP, this methodology has been developed by IBM and focuses on the identification of the “IS” priorities of your organization. Using IBM’s system, you will be focusing on data architecture and establishing relationships between like sets of data.

MIT’s Critical Success Factor

Otherwise known as CSF, this methodology was developed by John Rockart. Instead of focusing on the “IS” part of your business, CSF focuses on key business goals and develops strategies for each manager’s level. To tell if the Critical Success Factor is working, the system should be able to suggest courses of action that you have deemed to be successful.

University of Minnesota’s End/Means (E/M) Analysis

Developed by Davis and Wetherbe, this methodology determines the effectiveness of output criteria. E/M also determines the efficiency criteria for output generation. E/M works by first figuring out the outputs provided by the business processes.

After it understands the information, the system will describe how to make these outputs useful for its end-user. After that, it will inform you what information it needs to evaluate the output’s effectiveness.

System Testing and Operation

Before you roll your management information system out for employee use, you must test it. As with most databases, unless you are extremely comfortable testing the system, don’t attempt it. A databasing professional will be able to check the language and ensure that your system performs the way that you need. Once the system is operational and tested, you should run a final check of essential issues, including data security, backup and recovery, systems controls and documentation.

Data Security, Backup and Recovery

The more information that you collect on your customers, the more secure you need your system to be. You should also prepare for any catastrophic failures in your system. To prepare for faults, you need a robust backup and recovery protocol.

Some companies backup their systems annually, others backup by the minute. It depends upon the size of your company and your chosen industry.

Systems Controls for MIS

To test the systems controls of your MIS, you need to run all available levels of reports to ensure that they work. The hardware and software should be able to meet processing requirements. Your system should have a response time that will be maintained by the database professionals.

Documentation in Your MIS

Documentation is an essential aspect of allowing your employees to access the database that took time and money to develop. Documentation typically comes in the form of user guides, reference materials for commands and a system manual that explains the architecture of your database.

Once you have a fully operational management information system, you need to have it consistently monitored. Maintaining best practices for your industry may mean that you update your database on a set schedule. You should also be agile enough to keep up with projected changes in technology such as Windows updates or bug patches.

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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.