A management information system is an approach a company uses when making various business decisions. Business owners and managers are responsible for operational, technical and strategic decisions. Using an information system helps these individuals gather pertinent documents that will help them make the best decision possible. While these systems were manual in previous decades, business technology allows companies to implement electronic systems. Some disadvantages can exist when using a management information system in a company.
Installing a management information system can be expensive for a company. Information technology—while cheaper today than previous years—can represent a significant expense, especially for larger organizations. These systems may also require ongoing support or upgrade fees, which can represent future fixed cash outflows. Companies must create a budget to pay for these items to ensure the information system stays current with business technology. Attempting to integrate these systems with technology currently in use can also increase expenses.
Companies may need to hire maintenance individuals to help keep an electronic information system running smoothly. These individuals often need experience in computer science functions and other business topics. Not only does this increase labor costs, but it also requires additional training and ongoing education for these individuals. Business technology can change frequently, creating an environment where companies must have trained individuals who can properly maintain computers, websites, servers and other equipment in use by the management information system.
Management information systems have the potential to become ineffective in a company's operations. As with all computer systems, the management information system is only as good as the programmer. Gathering unimportant or non-essential information can delay business decisions because managers must request additional input. Spending too much time reprogramming or correcting issues can also increase the time spent in the decision-making process. Business owners and managers may also need extensive training on new systems, creating a learning curve that will hopefully diminish over time.
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