ROLE OF MANAGEMENT INFORMATION SYSTEMS IN BUSINESS (MIS 12.04.2021)

ROLE OF MANAGEMENT INFORMATION SYSTEMS IN BUSINESS

 

The main role of Management Information Systems is to report on business operations with the purpose of supporting decision making. This is to ensure that the organization is managed in a better and more efficient way so that it can be able to achieve full potential thus gain competitive advantage.

Let’s look at some of the other roles played by Management Information Systems in an organization.

 

1. To provide information readily to company decision makers. Regardless of whether it is a marketing, financial or operational issue, managers need quick access to information so that they can make good decisions that will have a positive impact on the company’s performance. Management Information Systems enhance this by strategically storing vast amounts of information about the company in a central location that can be easily accessed by managers over a network. This means that managers from different departments have access to the same information hence they will be able to make decisions that collectively help solve the company’s problems in the quickest way.

 

2. Management Information Systems also help in data collection. Data from everyday operations in the company is collected and brought together with data from sources outside the organization. This enables a healthy and functional relationship between distributors, retail outlets and any other members of the supply chain. It also helps keep good track of performance since production and sales numbers will be recorded and stored in a central database that can be accessed by all members of the MIS. Access to this information also helps ensure that problems are detected early and decisions are made quickly using the latest information.

 

3. To promote collaboration in the workplace. In any large company, there are many situations that call for input from several individuals or departments before decisions can be made. Without an efficient communication channel, these decisions can take a very long time. Even with good communication channels, if the different stakeholders don’t have access to all the available data, the process would hit a number of snags before it’s complete. Management Information Systems ensure that all the members of the decision-making group have access to all the data that’s required to make the decision even if they are working from different physical locations.

 

4. To run possible scenarios in different business environments. Before making a decision that will affect the overall standing of the business, a lot of precaution must be taken. There is a need to check and verify that the company will not suffer after making a decision. Management Information Systems enable executives to run what-if scenarios so that they can see how some of the important metrics in the business will be affected by a given decision. The data is presented in easy-to-understand reports and graphs that make interpretation easy. For example, a human resource manager will be able to tell what will happen to the revenue, production, sales and even profit after reducing the number of workers in a manufacturing department. Another example would be the effect of a price change on profitability. Once executives have been able to see whether or not the decision will be beneficial to the company, it is easier to make good decisions that will not leave the company in chaos.

 

5. Management Information systems give accurate projections of the company’s standing in the short and long term. Most of the decisions made by top executives in companies have an effect on the company strategies. As a result, some of them may need some modifications done on the company goals or strategies. Most Management Information Systems come with trend analysis features that will enable you to project the performance of a business with the current configuration and how they will be affected once you have implemented any changes that you are considering. The Management Information Systems that don’t have the trend analysis feature will still provide you with enough information to accurately carry out the analysis using external tools.

 

6. Management Information Systems help track the implementation of particular decisions in a company. Before making a decision, executives use these systems to make projections of the expectations from the particular decision. If they decide to go ahead with the changes, there will be a need to keep monitoring the performance to see if you are on track to achieving the desired results. Management Information Systems give detailed reports and recommendations so that the evaluation of the goals moves smoothly and effectively. You get data that shows if your decisions have had the desired effect. If not, you will be able to take the necessary corrective measures early so that you can get back on track.

 

7. To improve on the company’s reporting. One of the reasons why Management Information Systems are favoured by large companies is the effectiveness of the reporting features. The decisions can be made quickly because the information is presented in an easy-to-understand format. The fact that the system is accessible by people from different parts of the organization makes it an effective reporting and communication tool. Findings can be shared among colleagues with all the necessary supplementary data. It is also possible to create brief executive summaries that sum up the whole situation for review by senior company executives in situations that need their approval.