Curious about how businesses navigate their vast operations?
Imagine running a bustling restaurant– you've got orders streaming in, inventory to manage, and a team to coordinate. That’s where Management Information Systems (MIS) step in.
MIS is like the brains of the operation, juggling data, organising the chaos, and helping you make the right decisions.
So, what's MIS? Well, it's the go-to tool for businesses of all shapes and sizes. Whether you're managing a small business or a global enterprise, you need an MIS system to work effectively. It's what ensures you have the right info at the right time.
Let’s go into details!
What Is Management Information System
Management information system is the broader concept of business intelligence (BI). It is multidimensional in nature. It is all about gathering data from various types of sources, analysing, cleaning, processing and presenting that data in an understandable format for decision-making purposes.
A management information system is a system that contains information related to the managerial operations of an organisation. Generally, a management information system integrates multiple kinds of information, from both inside and outside the organisation. It involves human resources, accounting, production systems and logistics.
Origin And Evolution
The groundwork of the germ of today's management information system was laid in the late 19th century by Frederick Winslow Taylor. Taylor laid the foundation for the present-day concept of scientific management, in which accounting data can be used for planning, controlling and improving decision-making in line with the needs of the organisation.
Although information systems in a formal sense existed a long time before the invention of computers, the history of information systems has been invariably intertwined with the history of computer technology.
Early computer technology was used for keeping track of financial transactions and compiling statistical data for presentation to business managers. Banks and insurance companies pioneered large-scale use of computers in their operations.
So, it is no surprise that both have been at the forefront of developing applications of computing to information systems.
Long before MIS became a widespread concept in business, they were known among accountants and information system staff as 'management accounting' and 'management information', respectively.
What are the Main Types of Management Information Systems (MIS)
Below are the main types of MIS:
1. Process control
Process control is a root cluster of Management Information Systems. It stores the information about all the existing operations of any systems, whether manual, semi-automatic or automatic. It includes strategies by which the system controls the operations.
2. Inventory control
An inventory control system is a kind of management information system which tracks all inventory from the moment it enters production till it leaves the warehouse. It enables you to reduce the excess inventory and improve the efficiency of your business.
3. Decision support
Decision Support Systems (DSS) play a crucial role in helping managers to make decisions. It is capable of supporting complex processes for problem solving, risk analysis, forecasting and strategic planning.
This system not only consolidates data from various sources but also performs analysis and synthesis to generate information about complex problems. Although the military initially developed DSS, it has been widely used in various private enterprises as well.
4. Planning Systems
The planning system is an information system that can be used for planning the project management process. Planning is a very broad subject, encompassing the company's operations, strategies, and future plans.
It involves matching the business' skills to business opportunities, setting goals and plans to realise them, and monitoring actual performance to adjust priorities.
5. Sales and marketing system
In the management of a business, a sales and marketing system refers to a formal procedure for producing new customers or clients, or retaining existing ones by managing their interactions with the business. A sales and marketing system is an important instrument in marketing a company’s merchandise.
6. Human resource
Human resource management is the practice of running human resources more efficiently. It accomplishes this by having clear goals of the organisation, making sure that these goals are relayed to employees, and measuring them against productivity.
7. Accounting and finance systems
An accounting and finance system encompasses a set of accounting, financial and management reporting systems that are required to keep track of the movements of every single unit of every item/commodity/service you have in your inventory. It's a fact that an industrial enterprise can't survive without a proper accounting and finance system.
8. Management reporting system
When we talk about Management reporting systems, we mean some software application that acts as the connecting bridge between the management and the financial control either as an integral part of ERP (Enterprise resource planning).
Importance Of Management Information System
It shows the management the actual performance of a business process
It provides data concerning market patterns
It records data so that it is available at the time of decision making
It ensures smooth flow of information in an organised manner
What is the Purpose of a Management Information System?
A management information system is a crucial element of any modern organisation. It provides information about the performance of different areas, processes and events in an organisation to those who need it. It is beneficial for those people who are responsible for taking organisational-level decisions and monitoring organisational performance.
The primary purpose of a management information system is to deliver high-quality information as efficiently as possible. Ideally, the system has the ability to provide timely and meaningful information for users throughout the enterprise, including executive-level decision makers, so they can operate on comprehensive and accurate data analysis.
Is ERP A Management Information System?
ERP is an acronym that stands for Enterprise Resource Planning. The primary difference between an ERP system and a management information system is that the former offers integrated functionality, while the latter tends to be more specialised in its functionality. As both are closely interrelated, they are often considered synonyms.
However, the time has come to look at them to understand what these terms mean.
ERP is a part of the larger management information system environment. It helps contribute to simplifying routine operations and helps provide analytical information to business managers.
An ERP as a Management Information System is a software package that integrates all the company’s activities, from production to accounting and from marketing to human resources.
One of the basic Management Information Systems that should be used to ensure that a company can survive today is an ERP system. This kind of software is a full package that will give a business solution to its fundamental accounting needs, as well as those related to other functional areas.
There are many ERP systems in the market today, but there is one that stands out from the rest – Odoo.
By implementing the Odoo ERP system, you can shift into high gear and gain a competitive edge over other businesses that don’t have a single-source view of their customer data.
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