What is Management Information System (MIS)? Definition, Features, and Process

What is Management Information System (MIS)?

A management information system (MIS) is a formal method of collecting data, analyzing them, and providing useful information to aid in decision-making.

MIS is a system installed in an organization to give managers the information that will support them in sound decision-making. It is the basis of a control system in the organization.

MIS is designed to provide the information needed by management in order to plan, control, and evaluate the functions of the organization. It provides analytical and systematic information necessary to all levels of managers for taking the right decision at the right time.

  • Ricky W. Griffin – MIS is a system that gathers comprehensive data, organizes and summarizes it in a form valuable to managers, and provides those managers with the information they need to do their work.
  • Stephen P Robbins and Mary Coulter – MIS is a system used to provide management with needed information on a regular basis.

MIS facilitates the managers to perform their functions of planning, controlling, staffing, and other functions effectively. It collects relevant raw data, transfers the data into relevant information, and transmits that information to concerned managers.

Functional departments need different types of information on the basis of their nature of work as the finance manager needs financial information, the marketing manager needs marketing information, and so on, thus facilitation of effective information is essential.

Characteristics of Management Information System

The common features of management information systems include the following:

Decision-Making Support

MIS assists in decision-making processes by providing relevant and timely information to decision-makers. It ensures that the right data is available to make informed choices and take effective actions.

Organizational Control

Management information system helps in controlling and managing all the mechanisms within an organization. It provides a structured approach to monitor and regulate various activities, ensuring that operations align with strategic objectives and desired outcomes.

Comprehensive Information Collection

MIS gathers both financial and non-financial information from various sources within the organization. It collects data on aspects such as sales, expenses, inventory, customer feedback, and more, enabling a comprehensive understanding of organizational performance.

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Summarized Information Format

MIS presents information in a summarized and organized format. It condenses complex data into manageable and easily digestible reports, charts, and dashboards. This simplification enhances accessibility and facilitates efficient analysis.

Strategic Emphasis

MIS is designed within a framework that emphasizes profit planning, performance planning, and overall control at all levels of the organization. It aligns activities with strategic objectives and helps in evaluating the performance of different departments and individuals.

Integration of Financial and Non-Financial Information

MIS integrates both financial and non-financial data. It combines information related to financial transactions, sales, revenue, and expenses, as well as non-financial data like customer satisfaction, market trends, and employee performance.

This integration provides a comprehensive view of the organization’s activities and outcomes.

Related: What is Marketing Information System (MKIS)?

Flexibility and Adaptability

MIS is flexible and can be modified to meet the changing demands of the organization. It can be tailored to accommodate new information requirements, technological advancements, and evolving business environments.

This flexibility ensures that the MIS remains relevant and effective in supporting organizational processes.

Steps in Management Information System (MIS)

The process of management information systems involves converting past, present, and anticipated relevant data into information for managerial decision-making. The important steps of MIS include the following six:

  • Assembling
  • Processing
  • Analysis
  • Storage and Retrieval
  • Evaluation
  • Dissemination

Data assembly

The first step in MIS involves searching for and collecting raw data from various sources. This data is then organized and compiled into a structured file, ensuring that all relevant information is captured.

Data Processing

Once the data is assembled, the next step is to edit and summarize it. This involves cleaning and refining the data, removing any inconsistencies or errors, and transforming it into a more usable format.

Summarization techniques are applied to thicken the data and make it more manageable for analysis.

Data Analysis

After processing, the data is examined and scrutinized to derive meaningful insights. Various statistical techniques and tools are utilized to uncover patterns, relationships, and trends within the data.

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This analysis often involves calculating percentages, ratios, averages, and other relevant statistics to gain a deeper understanding of the information.

Storage and Retrieval

Once the data has been processed and analyzed, it needs to be stored in a structured manner for easy access and retrieval. This involves coding and indexing the data, creating a logical framework that enables quick rearrangement and efficient recovery when required.

Proper storage ensures that the information can be accessed in a timely manner for decision-making purposes.

Evaluation

In this step, the usefulness and effectiveness of the processed data are determined. The evaluation process involves assessing the quality, accuracy, and relevance of the information in meeting the organization’s objectives.

It helps in determining whether the data provides valuable insights and supports informed decision-making.

Dissemination

The last step of the management information system involves delivering the information in a required format to the decision-makers. This includes presenting the analyzed data in a clear and understandable manner, such as reports, charts, graphs, or interactive dashboards.

Dissemination ensures that decision-makers have access to the processed information they need to make informed choices and take appropriate actions.

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