How Is a Management Information System Useful in Companies?
A management information system, or MIS, is a computerized database that collates, summarizes and analyzes any type of information that is useful to a company’s managers. While typically used in reference to financial data, the MIS can also manage information in all other aspects of the company’s operations, including such disparate areas as human resources, sales, inventory control, social media marketing and other aspects of the business the management team needs to know.
The signature use of MIS is to monitor the company’s performance in real time; individual managers can also use the information to gain insight into their own department’s activities.
The MIS may be programmed to automatically produce reports at monthly, quarterly or other specified intervals, and may also be accessed to produce special reports when needed.
Management information systems for the sales and marketing departments of a company, compile and analyze information about customers and prospective customers. Often, the information is scanned or sourced from customer receipts, loyalty card transactions or credit card receipts.
The information can be aggregated to highlight buying trends and patterns, identify repeat and top-purchasing customers, and target product marketing efforts to address relevant segments of the customer base.
Gaining these types of insights can help the company develop and fine-tune its marketing strategy, resulting in lowered costs and increased sales department effectiveness.
Human resource information systems handle employee data such as basic personnel information, attendance and hours, performance review ratings and payroll tracking. Because the data can include private information – names, addresses and Social Security numbers – protecting privacy and maintaining security are paramount.
The HRM database can access information for any individual employee, reducing the cost of keeping paper records. When aggregated, the system can provide trending information for management feedback in such areas as improving recruiting efforts, administering benefits and managing schedules and workflow.
Management information systems in accounting are designed to store and aggregate financial data. The resulting analyses are used both internally, by managers and CFOs, for example, and externally by consultants, regulators, tax agencies and others. Reports generated by the accounting MIS include profit-and-loss statements, accounts receivable tracking and other financial statements.
Because these reports enable management to analyze the company's financial health, it is imperative that the data input into to the system be complete, accurate and secure.
Perhaps more than any other division, the information technology section of a company has a dual role with MIS.
First, the system can store and analyze data about the IT department, just as it can for any other department. This can lead to savings and greater efficiency in the company’s use of IT. For example, the data might show that IT technicians spend an inordinate amount of time troubleshooting minor issues for other departments. One solution might be to train key staff to be database administrators for their departments, enabling them to do the low-level troubleshooting, thereby saving IT staff time for more serious issues.
In addition, the IT department in most companies will likely play a significant role in the acquisition, installation and servicing of any MIS the company adopts.
IT specialists may be called upon to evaluate the technical specifications of any MIS contract and have input into the programming and capabilities of the system. However, line managers and administrators in the various departments should think carefully about what kind of information they require do their jobs, how to guarantee that the data inputs are accurate and how to protect sensitive data.
No matter how elegantly the software and supporting hardware of the system are designed, any MIS a company adopts is more useful when the information in the system is timely and accurate.