The Details of Management Information in Businesses - Coursework Example

Management Information Introduction Before going into the details of management information in businesses, let us get a better understanding of what management information actually is. As the name suggests, management information system means to manage the information that is required to run the business operations and other activities of an organization. Martin (2010) asserts, “management information systems are a subdivision of internal business controls that usually refer to documents, IT, people and procedures”. Carry (1988) found that without the implementation of a perfect MIS, no company or organization can ever be successful because information is needed in every business operation in order to run the business effectively. Dhillon (2010) states, “the chief principle of management information system is to make sure that the flow of correct information is facilitated to the right people or parties in an organization”. The key tasks of an efficient management information system include management of business related information, documentation of the collected information, and assisting the management in processing the information. Lucey (2005, p.4) states, “the processing of data into information and communicating the resulting information to the user are the very essence of an MIS”. The main purpose of implementing a management information system in an organization is that the development and management of tools related to information technology helps the managers, decision makers and other employees of an organization in effectively processing the information regarding various tasks and business operations. Vitez (n.d.) asserts, “the MIS should not be concerned with whether the information can be retrieved, but rather how and what information should be retrieved”. Currie and Galliers (1999) found that management information systems are useful in not only collection and analysis of the required business related information but also in production of reports. Management information system is considered an integral part of any organization because it controls all activities regarding businesses of any organization by providing the right information to the right person at right place and at the right time. LaRose (n.d.) states, “management information systems are used to manage the data created within the structure of a particular business”. 2. Importance of Management Information in Organizations Management information system is one of the most important aspects of any company or organization because it helps the organizations in successfully carrying out all the tasks related to different business activities by using the information that is appropriately collected and analyzed by the management information department. Earl (1996) found that the collected information is used in various decision-making processes by the management of any organization. Management information system does not only mean collection of data, rather it is also used to process, analyze and disseminate the collected information or data in order to carry out various business operations of an organization. The data is presented to the concerned department in the form of a well-documented report consisting of those activities that are needed to be executed by the management of any specific department. Earl (1988) found that MIS helps an organization in setting and achieving long-term strategic goals and objectives. MIS is also used in financial organizations in order to keep a complete and accurate record of various financial activities. Management information system differs from information system in a sense that information system is only concerned with the collection of data but management information system not only collects and organizes the required data but also assists the management of the organization in effectively carrying out various activities related to decision-making processes. Mehmood (2009) states, “information systems include systems that are not intended for decision making”. Mcleod and Schell (2007) found that management information system makes use of software in order to automatically process the collected data into the required information. Abel (2008) asserts, “MIS deals with planning for, development, management, and use of information technology tools to help people perform all task related to information processing and management”. Without the use of effective management information system in the organizations, the employees can never properly access or use the information that is required for any specific business activity. The MIS should be upgraded regularly in order to get efficient and updated results. Summers (2010) states, “upgrading your business information system is a necessary process that every successful organization should implement”. 3. Working and Examples of Management Information System One of the most expanding uses of management information system is through computers. Computers are used by the organizations for the processing of orders regarding products and services provided by the organization. All information is stored in the computers related to customers’ orders. The information includes the name of the product that is demanded by any specific customer, the specifications of the product, collected and remaining payment, order’s delivery time, and all other information regarding the customers’ orders. That information is then viewed and analyzed by the management of the organization in order to carry out the required tasks regarding product delivery to the customers. The computer systems used by the organizations automatically process the collected data into required information to be used by the concerned department. Website is also one of the most useful tools for effective management information systems. They play their part in information collection and process transactions for the company or organization for which the website is designed. Websites are used by the customers to get the information regarding any specific product and placement of online orders. The request regarding any specific product along with its desired specifications gets stored in the database of the company through the website platform. After the request comes to the company’s database, the concerned department makes use of the information collected by the management information system and processes it in order to make the requested product available for the customer. Websites play a great role in effective management information as they process the transactions for a company or organization. When we talk about uses of management information systems, we must also mention its role in the banking sector. Almost all organizations including the banks make use of information systems in order to effectively manage and process the required information regarding any specific business operation. For example in online payment of bills, people provide necessary information regarding the payment to the bank which the bank stores in the database and makes use of the stored information for the purpose of processing the payment on the due date of the bill. Not only the transaction is processed automatically by the management information system of the bank but also the person who made the payment gets informed about the result through an automatically generated message or an email. Operating a management information system is not an easy task to be performed because it has to deal with all business operations, processes and people of any specific organization. It requires an efficient and highly qualified team of professionals to carry out the tasks related to management information system. The tasks related to management information system include maintenance of existing systems, analyzing the effectiveness and efficiency of existing systems, taking steps to eradicate bugs from the existing systems, and implementing new systems and technologies when required. Management information system is always considered one of the most important systems of any organization because it not only helps the management in taking appropriate decisions through analyzing the information provided by the management information system but also in expanding the business in other markets. 4. Key Elements of Management Information Systems The management of any company or organization must take into consideration those elements, which are of extreme importance for the successful implementation and working of a management information system. Those key elements include timeliness, accuracy, consistency, completeness and relevance. 4.1 Timeliness Quick collection of data and processing of data into required information is one of the most important jobs of an efficient management information system. Anderson and Post (2003) found that an organization’s MIS should be able to quickly collect the data from various sources and make it usable for the concerned departments when needed. Timeliness is of extreme importance for an efficient MIS because reporting of correct data to the users saves time of the users. Timeliness not only involves quick collection of data but it also means to edit the collected data, summarize results, make a report, and do whole processing of data in a short time in order to facilitate the concerned departments. 4.2 Consistency Next important element of a management information system is its consistency and reliability. McMahon (1993) found that the collected data should always be from reliable sources and it should be processed in a consistent manner. It is because if the data will be processed consistently, the users of the management information system will not have any difficulty in using the information generated by the MIS. Such procedures and techniques should be applied by the management of any organization that should be able to bring necessary changes to the system when required. Data consistency acts as the foundation for an effective management information system. If the data will not be processed and compiled in a consistent manner, it will be very difficult for the users of MIS to effectively run the business operations of any organization. 4.3 Accuracy Accuracy is another key element of management information system and it means that information provided to the users of the system should be precise and accurate in all aspects. All departments of an organization make use of reports generated by the MIS, so it is essential for any MIS to generate accurate and properly checked information in the reports. Accuracy of internal controls is of extreme importance for the proper functioning of MIS. 4.4 Relevance Another important element of MIS is relevance, which means providing relevant information to the concerned departments. Case and Parker (1993) found that only that information should be provided to the user, which is needed for any specific business operation. Irrelevant or unrelated information is of no use and it leads to time wastage and ineffective decision-making. An efficient management information system is only that which provides very relevant and desired information to the user. 4.5 Completeness Completeness is also one of the key elements of MIS that means to provide the users with complete information regarding any matter. However, completeness does not mean that the report should have a huge detail about any specific matter as it creates information overload, rather only relevant and pertinent information should be provided to the concerned departments. 5. Applications of Management Information System 5.1 Assists in Developing Strategies MIS is used by the organizations while developing strategies regarding different business operations. Computers cannot make strategies without human intervention; rather they have to assist the management of any organization in developing strategies. David and Olson (2000) found that management information system involves the use of computer in order to collect the data, processing of data and generation of reports for decision-making purposes. Therefore, MIS provides great assistance to the management by providing them with accurate and complete information for developing strategies regarding any specific matter. 5.2 Data Processing Data processing is also one of the greatest uses of management information system. Gone are the days when organizations used to organize the data in the shape of files and then process it manually for decision-making and record keeping purposes. Now management information systems are used for this purpose because they perform all the tasks related to information management which include collection of data, editing of data, saving it in the computers, and generating reports for decision making purposes. Dawn (2009) asserts, “management information systems are used by organizations to track, store, manipulate and distribute information to the appropriate people”. Aoms (2010) states, “processing of the information becomes significant for better performance of managerial functions”. Oz (2006) found that automated data processing not only helps the management in quick decision-making but also saves the time by automatically carrying out the data processing activities. 6. Conclusion Summing it up, implementation of an effective management information system is of extreme importance for any organization as it helps the management in carrying out various business related activities including improved decision-making and automated data processing. Implementation of a perfect management information system is necessary in order to gain competitive edge in any market. References Abel, O (2008), Knowledge Workers in the Information Age, viewed 25 April 2010, . Anderson, D. & Post, G., 2003. Management Information Systems: Solving Business Problems with Information Technology. 3rd ed. U.S.A: The McGraw-Hill Companies, Inc. Aoms, P (2010), Management Information System (MIS) In College Management Software, viewed 25 April 2010, . Carry, J., 1988. 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Martin, S 2010, An Introduction to Management Information Systems, viewed 25 April 2010, . Mcleod, R. & Schell, G., 2007. Management Information Systems. 10th ed. U.S.A: Pearson Education, Inc. McMahon, W., 1993. An Efficiency-Based Management Information System. Michigan: International Institute for Educational Planning. Mehmood, M 2009, Management Information System, viewed 25 April 2010, . Oz, E., 2006. Management Information Systems. 5th ed. Canada: Thomson Learning, Inc. Summers, I 2010, Guide to Upgrading Your Business Information Systems, viewed 25 April 2010, . Vitez, O n.d., Limitations on Management Information Systems, viewed 25 April 2010, . Read More