Learn, Explain the Characteristics of Management Information Systems (MIS)!
Management information system is a set of systems which helps management at different levels to take better decisions by providing the necessary information to managers. Management information system is not a monolithic entity but a collection of systems which provide the user with a monolithic feel as far as information delivery, transmission and storage are concerned. Also learned, the Role of The MIS, The Characteristics of Management Information Systems (MIS)!
The different subsystems working in the background have different objectives but work in concert with each other to satisfy the overall requirement of managers for good quality information. Management information systems can be installed by either procuring off the self-systems or by commissioning a completely customized solution.
A management information system has the following characteristics:
System approach: The information system follows a System’s approach. The system’s approach implies a holistic approach to the study of the system and its performance to achieve the objective for which it has been formed.
Management-oriented: For designing of MIS top-down approach should be followed. The top-down approach suggests that the system development starts from the determination of the management needs and overall business objectives. Management-oriented characteristic of MIS also implies that the management actively directs the system development efforts.
Need-based: MIS design and development should be as per the information needs of managers at different levels that are strategic planning level, management control level and operational control level.
Exception-based: MIS should be developed with the exception based reporting principle, which means an abnormal situation, that is the maximum, minimum or expected values vary beyond the limits. In such cases, there should be exception reporting to the decision-maker at the required level.
Future-oriented: Besides exception-based reporting, MIS should also look at the future. In other words, MIS should not merely provide past or historical information, rather it should provide information on the basis of projections based on which actions may be initiated.
Integrated: Integration is significant because of its ability to produce more meaningful information. For example, in order to develop an effective production scheduling system, it is necessary to balance such factors as set-up costs, workforce, overtime rates, production capacity, inventory level, capital requirements and customer services. Integration means taking a comprehensive view of the subsystems that operate within the company.
Common data flows: Because of the integration concept of MIS, there is an opportunity to avoid duplication and redundancy in data gathering, storage, and dissemination. System designers are aware that a few key source documents account for much of the information flow. For example, customer’s orders are the basis for billing the customer for the goods ordered, setting up accounts receivables, initiating production activity, sales analysis, sales forecasting etc.
The Following Characteristics of Good Management Information Systems are Explained!
For information to be useful to the decision maker, it must have certain characteristics and meet certain criteria.
Some of the characteristics of good information are discussed as follows:
Since information is already in a summarized form, it must be understood by the receiver so that he will interpret it correctly. He must be able to decode any abbreviations, shorthand notations or any other acronyms contained in the information.
Information is good only if it is relevant. This means that it should be pertinent and meaningful to the decision maker and should be in his area of responsibility.
It should contain all the facts that are necessary for the decision maker to satisfactorily solve the problem at hand using such information. Nothing important should be left out. Although information cannot always be complete, every reasonable effort should be made to obtain it.
Information may be useless if it is not readily accessible ‘ in the desired form when it is needed. Advances in technology have made information more accessible today than ever before.
The information should be counted on to be trustworthy. It should be accurate, consistent with facts and verifiable. Inadequate or incorrect information generally leads to decisions of poor quality. For example, sales figures that have not been adjusted for returns and refunds are not reliable.
Too much information is a big burden on management and cannot be processed in time and accurately due to “bounded rationality”. Bounded rationality determines the limits of the thinking process which cannot sort out and process large amounts of information. Accordingly, information should be to the point and just enough – no more, no less.
Information must be delivered at the right time and the right place to the right person. Premature information can become obsolete or be forgotten by the time it is actually needed.
Similarly, some crucial decisions can be delayed because proper and necessary information is not available in time, resulting in missed opportunities. Accordingly, the time gap between the collection of data and the presentation of the proper information to the decision maker must be reduced as much as possible.
The information is not desirable if the solution is more costly than the problem. The cost of gathering data and processing it into information must be weighed against the benefits derived from using such information.