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Management Information System – Role and Impact in Business

Management Information System – Role and Impact in Business

Management Information System is the system which makes available the right information to the right person, at the right place, at the right time, in the right form and at the right cost.

Definition of Management Information System (MIS)

According to David and Olson, “MIS is an integrated user-machine system for providing information to support operations, management and decision-making functions in an organization. The system utilizes computer hardware and software, manual procedures/models for analysis, planning, control and decision-making and database”.

Kelly has defined MIS as a “a combination of human and computer based resources, which result in collection, storage, retrieval, communication and use of data for the purpose of efficient management of operations and for Business Planning”.

From the above definitions, we can state that the MIS is basically an integrated system which transforms the data (inputs) into reports (outputs) for facilitating decision-making through processing and using various components of the information system i.e. Hardware, Software, Procedures and Personnel.

A formal system should be able to take care of the following activities  –

1. Handling of a voluminous data.

2. Confirmation of the validity of data and transaction.

3. Quick search and retrieval.

4. Mass storage.

5. Communication of the information system to the user on time.

6. Fulfilling the changing needs of the information.

Role of Management Information System

Management Information System has become necessary due to the increased Business and Management Complexities. These complexities demand not only quantitative but qualitative decision-making. Managers have to take decisions under conditions of Risk, Certainty or Uncertainty. A good manager/decision-maker is one who minimizes if not eliminates altogether, the elements of risk and uncertainty in decision-making. MIS is helpful in doing precisely this.

Management Information System is required to enable managers to take qualitative decisions and ensure success for their respective organizations.

Management Information System enables the managers to come out with appropriate response to a business situation. It helps the decision-maker to give either a reactive or proactive response.

Management Information System can act or function both as an instrument of deference as well as a weapon for offence, with strong strategic planning base.

Impact of Management Information System

Management Information System creates an information based work culture in an organization.

Since Management Information System plays a very important role in the organization, it creates an impact on the organizational functioning, performance and productivity. With a good Management Information System support, the management of marketing, finance, production and personnel became more efficient. The tracking and monitoring of the functional targets becomes easy. The functional managers are informed about the progress, achievements and shortfalls in the activity & targets.

A disciplined information reporting system creates a structured database and a knowledge base for all the people in the organization. The information is available in such a form that it can be used straight away or by blending and analysis, saving the manager’s valuable time.

Management Information System creates another impact in the organization by making it convenient to understand the business better. Management Information System begins with the definition of data, entity and attributes respectively, designed for information generation in the organization. Since all information systems use the dictionary, there is an understanding of terms and terminology in the organization bringing clarity in communication and also a similar understanding of an event in the organization.

Management Information System calls for systematization of the business operations for an effective system design. This leads to streamlining of the operations, which complicate the system design. It improves the administration of the business by bringing a discipline in its operations, as everybody is required to follow and use systems and procedures.

Management Information System – Role and Impact in Business



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