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Management Information Systems

Management Information Systems

All businesses share one common asset, regardless of the type of business. It does not matter if they manufacture goods or provide services. It is a vital part of any business entity, whether a sole proprietorship or a multinational corporation. That common asset is information.

Information enables one to determine the need to create new products and services. Information tells companies to move into new markets or to withdraw from other markets. Without information, the goods do not get made, the orders are not placed, the materials are not procured, the shipments are not delivered, the customers are not billed, and the business cannot survive.

But information has far lesser impact when presented as raw data. In order to maximize the value of information, it must be captured, analyzed, quantified, compiled, manipulated, made accessible, and shared. In order to accomplish those tasks, an information system (IS) must be designed, developed, administered, and maintained.


An information system is a computer system that provides management and other personnel within an organization with up-to-date information regarding the organization's performance; for example, current inventory and sales. It usually is linked to a computer network, which is created by joining different computers together in order to share data and resources. It is designed to capture, transmit, store, retrieve, manipulate, and or display information used in one or more business processes. These systems output information in a form that is useable at all levels of the organization: strategic, tactical, and operational.

Systems that are specifically geared toward serving general, predictable management functions are sometimes called management information systems (MIS). A good example of an MIS report is the information that goes into an annual report created for the stockholders of a corporation (a scheduled report). The administration of an information system is typically the province of the MIS or information technology (IT) department within an organization.

Some applications have infringed on the familiar MIS landscape. Enterprise resource planning (ERP) software and executive information systems (EIS) both provide packaged modules and programs that perform the same functions as traditional MIS, but with greater functionality, flexibility, and integration capabilities.

Mainframes. The original computerized information systems were based on mainframes. Mainframe is a term originally referring to the cabinet containing the central processor unit or main frame of a room-filling computer. Firms such as IBM were instrumental in the mid-twentieth century in helping businesses integrate and operate information systems and technology into their business operations. After the emergence of smaller minicomputer designs in the early 1970s, the traditional large machines were described as mainframe computers, or simply mainframes. The term carries the connotation of a machine designed for batch rather than interactive use, though possibly with an interactive time-sharing operating system retrofitted onto it. It has been conventional wisdom in most of the business community since the late 1980s that the mainframe architectural tradition is essentially dead, having been swamped by huge advances in integrated circuit design technology and low-cost personal computing. Despite this, in the twenty-first century there are still uses for mainframe systems that store vast amounts of data.

The Internet. The Internet has opened up further developments in information systems and the exchange of information via Web-based e-mail, intranets, and extra-nets. These technologies allow for much faster data and information exchange and greater access for more users. Web-casting and videoconferencing allow for real-time information exchanges. Mobile computing technologies accessed by handheld devices, such as multi-functional mobile phones, personal digital assistants, and podcasting (via iPods), are offering further modes of communication.

Information systems are also crucial if a firm decides to practice telecommuting, or teleworking. Telecommuting is defined as when employees can conduct full operations without being inside the business's office, instead working from a location such as an employee's home.

Telecommuting is seen as an asset both in improving employees' quality of life, and with allowing an organization more flexibility. A 2005 article in Technovation noted a firm's ability to adapt to telecommuting as a policy is directly linked to its information technology resources. As some scholars note, these advances in technology can fundamentally change the nature of management.

However, some have also argued that security of a company's data has increased in importance with the increase in information technology. A 2007 Software World article stated that such practices as telecommuting make information systems vulnerable to attack. Due to the range of threats to information systems (including viruses and hackers), information securitysuch as passwords, firewalls, and so forthare crucial to an organization.


The design of an information system is based on various factors. Cost is a major consideration, but there certainly are others to be taken into account, such as the number of users; the modularity of the system, or the ease with which new components can be integrated into the system, and the ease with which outdated or failed components can be replaced; the amount of information to be processed; the type of information to be processed; the computing power required to meet the varied needs of the organization; the anticipated functional life of the system and/or components; the ease of use for the people who will be using the system; and the requirements and compatibility of the applications that are to be run on the system.

There are different ways to construct an information system, based upon organizational requirements, both in the function aspect and the financial sense. Of course, the company needs to take into consideration that hardware that is purchased and assembled into a network will become outdated rather quickly. It is almost axiomatic that the technologies used in information systems steadily increase in power and versatility on a rapid time scale. Perhaps the trickiest part of designing an information system from a hardware standpoint is straddling the fine line between too much and not enough, while keeping an eye on the requirements that the future may impose.

Applying foresight when designing a system can bring substantial rewards in the future, when system components are easy to repair, replace, remove, or update without having to bring the whole information system to its knees. When an information system is rendered inaccessible or inoperative, the system is considered to be down.

A primary function of maintaining an information system is to minimize downtime, or hopefully, to eradicate downtime altogether. The costs created by a department, facility, organization, or workforce being idled by an inoperative system can become staggering in a short amount of time. The inconvenience to customers can cost the firm even more if sales are lost as a result, in addition to any added costs the customers might incur.

Another vital consideration regarding the design and creation of an information system is to determine which users have access to which information. The system should be configured to grant access to the different partitions of data and information by granting user-level permissions for access. A common method of administering system access rights is to create unique profiles for each user, with the appropriate user-level permissions that provide proper clearances.

Individual passwords can be used to delineate each user and their level of access rights, as well as identify the tasks performed by each user. Data regarding the performance of any user unit, whether individual, departmental, or organizational can also be collected, measured, and assessed through the user identification process.

The open systems interconnection (OSI) seven-layer model attempts to provide a way of partitioning any computer network into independent modules from the lowest (physical/hardware) layer to the highest (application/program) layer. Many different specifications can exist at each of these layers.

A crucial aspect of administering information systems is maintaining communication between the IS staff, who have a technical perspective on situations, and the system users, who usually communicate their concerns or needs in more prosaic terminology. Getting the two sides to negotiate the language barriers can be difficult, but the burden of translation should fall upon the IS staff. A little patience and understanding can go a long way toward avoiding frustration on the part of both parties.

There is more to maintaining an information system than applying technical knowledge to hardware or software. IS professionals have to bridge the gap between technical issues and practicality for the users. The information system should also have a centralized body that functions to provide information, assistance, and services to the users of the system. These services will typically include telephone and electronic mail help desk type services for users, as well as direct contact between the users and IS personnel.


Document and record management. Documenting and recording management may well be the most crucial aspect of any information system. Some examples of types of information maintained in these systems would be accounting, financial, manufacturing, marketing, and human resources. An information system can serve as a library. When properly collected, organized, and indexed in accordance

with the requirements of the organization, its stored data becomes accessible to those who need the information.

The location and retrieval of archived information can be a direct and logical process, if careful planning is employed during the design of the system. Creating an outline of how the information should be organized and indexed can be a very valuable tool during the design phase of a system. A critical feature of any information system should be the ability to not only access and retrieve data, but also to keep the archived information as current as possible.

Collaborative tools. Collaborative tools can consist of software or hardware, and serve as a base for the sharing of data and information, both internally and externally. These tools allow the exchange of information between users, as well as the sharing of resources. As previously mentioned, real-time communication is also a possible function that can be enabled through the use of collaborative tools.

Data mining. Data mining, or the process of analyzing empirical data, allows for the extrapolation of information. The extrapolated results are then used in forecasting and defining trends.

Query tools. Query tools allow the users to find the information needed to perform any specific function. The inability to easily create and execute functional queries is a common weak link in many information systems. A significant cause of that inability, as noted earlier, can be the communication difficulties between a management information systems department and the system users.

Another critical issue toward ensuring successful navigation of the varied information levels and partitions is the compatibility factor between knowledge bases. For maximum effectiveness, the system administrator should ascertain that the varied collection, retrieval, and analysis levels of the system either operate on a common platform, or can export the data to a common platform. Although much the same as query tools in principle, intelligent agents allow the customization of the information flow through sorting and filtering to suit the individual needs of the users. The primary difference between query tools and intelligent agents is that query tools allow the sorting and filtering processes to be employed to the specifications of management and the system administrators, and intelligent agents allow the information flow to be defined in accord with the needs of the user.


Managers should keep in mind the following advice in order to get the most out of an information system:

  • Use the available hardware and software technologies to support the business. If the information system does not support quality and productivity, then it is misused.
  • Use the available technologies to create and facilitate the flow of communication within your organization and, if feasible, outside of it as well. Collaboration and flexibility are the key advantages offered for all involved parties. Make the most of those advantages.
  • Determine if any strategic advantages are to be gained by use of your information system, such as in the areas of order placement, shipment tracking, order fulfillment, market forecasting, just-in-time supply, or regular inventory. If you can gain any sort of advantage by virtue of the use of your information system, use it.
  • Use the quantification opportunities presented by your information system to measure, analyze, and benchmark the performances of an individual, department, division, plant, or entire organization.


With companies outsourcing significant portions of their business operations (such as supply chain management), information systems can play an important role. General Motors (GM) is one company that outsourced many of its information technology operations in 2003. Doing so required coordinating operations and information systems among GM's internal IT operations and numerous other companies. One major task in this process has been standardizing information technology and other software processes.

Others note that globalization and, indeed, multinational operations would simply not be possible without sophisticated information systems.

An information system is more than hardware or software. The most integral and important components of the system are the people who design it, maintain it, and use it. While the overall system must meet various needs in terms of power and performance, it must also be usable for the organization's personnel. If the operation of day-to-day tasks is too daunting for the workforce, then even the most humble of aspirations for the system will go unrealized.

A company should not view information systems as ancillary. As management school professor Petter Gott-schalk notes, information technology operations should be central to a company's management. The emergence of the CIO, or chief information officer, as a top management position also speaks to the importance of information systems and information technology.

A company will likely have a staff entrusted with the overall operation and maintenance of the system and that staff will be able to make the system perform in the manner expected of it. Pairing the information systems department with a training department can create a synergistic solution to the quandary of how to get non-technical staff to perform technical tasks. Oft times, the individuals staffing an information systems department will be as technical in their orientation as the operative staff is non-technical in theirs. This creates a language barrier between the two factions, but the communication level between them may be the most important exchange of information within the organization. Nomenclature out of context becomes little more than insular buzzwords.

If a company does not have a formal training department, the presence of staff members with a natural inclination to demonstrate and teach could mitigate a potentially disastrous situation. Management should find those employees who are most likely to adapt to the system and its operation. They should be taught how the system works and what it is supposed to do. Then they can share their knowledge with their fellow workers. There may not be a better way to bridge the natural chasm between the IS department and non-technical personnel. When the process of communicating information flows smoothly and can be used for enhancing and refining business operations, the organization and its customers will all profit.

SEE ALSO Knowledge Management


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Management Information Systems


Before management information systems can be understood, the terms systems, information, and management must briefly be defined. A system is a combination or arrangement of parts to form an integrated whole. A system includes an orderly arrangement according to some common principles or rules. A system is a plan or method of doing something.

The study of systems is not new. The Egyptian architects who built the pyramids relied on a system of measurements for construction of the pyramids. Phoenician astronomers studied the system of the stars and predicted future star positions. The development of a set of standards and procedures, or even a theory of the universe, is as old as history itself. People have always sought to find relationships for what is seen or heard or thought about.

A system is a scientific method of inquiry, or observation, of the formulation of an idea, the testing of that idea, and the application of the results. The scientific method of problem solving is systems analysis in its broadest sense. Data are facts and figures. However, data have no value until they are compiled into a system and can provide information for decision making.

Information is what is used in the act of informing or the state of being informed. Information includes knowledge acquired by some means. In the 1960s and 70s, it became necessary to formalize an educational approach to systems for business so individuals, work groups, and businesses who crossed boundaries in the various operations of business could have appropriate information. Technical developments in computers and data processing

and new theories of systems analysis made it possible to computerize systems. Much of this computerization of systems was an outgrowth of basic research by the federal government.

Management is usually defined as planning, organizing, directing, and controlling the business operation. This definition, which evolved from the work of Henri Fayol in the early 1900s, defines what a manager does, but it is probably more appropriate to define what management is rather than what management does. Management is the process of allocating an organization's inputs, including human and economic resources, by planning, organizing, directing, and controlling for the purpose of producing goods or services desired by customers so that organizational objectives are accomplished. If management has knowledge of the planning, organizing, directing, and controlling of the business, its decisions can be made on the basis of facts, and decisions are more accurate and timely as a result.

Management information systems are those systems that allow managers to make decisions for the successful operation of businesses. Management information systems (MIS) consist of computer resources, people, and procedures used in the modern business enterprise. MIS also refers to the organization that develops and maintains most or all of the computer systems in the enterprise so that managers can make decisions. The goal of the MIS organization is to deliver information systems to the various levels of corporate managers. MIS professionals create and support the computer system throughout the company. Trained and educated to work with corporate computer systems, these professionals are responsible in some way for nearly all of the computers, from the largest main-frame to the desktop and portable PCs.


Management information systems do not have to be computerized, but with today's large, multinational corporations, computerization is a must for a business to be successful. However, management information systems began with simple manual systems such as customer databases on index cards. As early as 1642, the French mathematician and philosopher Blaise Pascal (16231662) invented the first mechanical adding machine so that figures could be added to provide information. Almost two hundred years later, Charles Babbage (17911871), a professor of mathematics at Cambridge University in England, wanted to make a machine that would compute mathematical tables. He attempted to build a computing machine during the 1880s. He failed because his ideas were beyond his technical capabilities, not because the idea was flawed. Babbage is often called the father of the computer. With the advent of the computer, management information systems became automated.

In the late 1890s, because of the efforts of Herman Hollerith (18601929), who created a punch-card system to tabulate the data for the 1890 census, it was possible to begin to provide data-processing equipment. The punch card developed by Hollerith was later used to form a company to provide data-processing equipment. This company evolved into International Business Machines (IBM). Mainframe computers were used for management information systems from the 1940s up until the 1970s. In the 1970s, personal computers were first built by hobbyists. Then Apple computer developed one of the first practical personal computers (PC). In the early 1980s, IBM developed its PC, and since then, the personal computer industry has mushroomed. Almost every management information system revolves around some kind of computer hardware and software.

Management information systems are becoming more important, and MIS personnel are more visible than they were in the 1960s and 1970s, when they were hidden away from the rest of the company and performed tasks behind closed doors. So remote were some MIS personnel from the operations of the business that they did not even know what products their companies made. This has changed because the need for an effective management information system is of primary concern to the business organization. Managers use MIS operations for all phases of management, including planning, organizing, directing, and controlling.


MIS personnel must be technically qualified to work with computer hardware, software, and computer information systems. Colleges and universities could not produce enough MIS personnel for business needs, and job opportunities were great in the mid-2000s. MIS managers, once they have risen through their technical ranks of their organization to become managers, must remember that they are no longer doing the technical work. They must cross over from being technicians to become managers. Their job changes from being technicians to being systems managers who manage other people's technical work. They must see themselves as needing to solve the business problems of the user, and not just of the data-processing department.

MIS managers are in charge of the systems development operations for their firm. Systems development requires four stages when developing a system for any phase of the organization:

Phase I is systems planning. The systems team must investigate the initial problem by determining what the problem is and developing a feasibility study for management to review.

Phase II identifies the requirements for the systems. It includes systems analysis, user requirements, necessary hardware and software, and a conceptional design for the system. Top management then reviews the systems analysis and design.

Phase III involves the development of the systems. This involves developing technical support and technical specifications, reviewing users' procedures control, designing the system, testing the system, and providing user training for the system. Management again reviews and decides on whether to implement the system.

Phase IV is the implementation of the system. The new system is converted from the old system, and the new system is implemented and then refined. There must then be ongoing maintenance and reevaluation of the system to see if it continues to meet the needs of the business.


Management information systems can be used as a support to managers to provide a competitive advantage. The system must support the goals of the organization. Most organizations are structured along functional lines, and the typical systems are identified as follows:

Accounting management information systems : All accounting reports are shared by all levels of accounting managers.

Financial management information systems : The financial management information system provides financial information to all financial managers within an organization including the chief financial officer. The chief financial officer analyzes historical and current financial activity, projects future financial needs, and monitors and controls the use of funds over time using the information developed by the MIS department.

Manufacturing management information systems : More than any functional area, operations have been impacted by great advances in technology. As a result, manufacturing operations have changed. For instance, inventories are provided just in time so that great amounts of money are not spent for warehousing huge inventories. In some instances, raw materials are even processed on railroad cars waiting to be sent directly to the factory, eliminating the need for warehousing.

Marketing management information systems : A marketing management information system supports managerial activity in the area of product development, distribution, pricing decisions, promotional effectiveness, and sales forecasting. More than any other functional area, marketing systems rely on external sources of data. These sources include competition and customers, for example.

Human resources management information systems : Human resources management information systems are concerned with activities related to workers, managers, and other individuals employed by the organization. Because the personnel function relates to all other areas in business, the human resources management information system plays a valuable role in ensuring organizational success. Activities performed by the human resources management information systems include, work-force analysis and planning, hiring, training, and job assignments.

The above are examples of the major management information systems. There may be other management information systems if the company is identified by different functional areas.

see also Information Processing ; Information Systems


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Lloyd W. Bartholome

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Management Information Systems (MIS)

Management Information Systems (MIS)

A management information system (MIS) is a computerized database of financial information organized and programmed in such a way that it produces regular reports on operations for every level of management in a company. It is usually also possible to obtain special reports from the system easily. The main purpose of the MIS is to give managers feedback about their own performance; top management can monitor the company as a whole. Information displayed by the MIS typically shows "actual" data over against "planned" results and results from a year before; thus it measures progress against goals. The MIS receives data from company units and functions. Some of the data are collected automatically from computer-linked check-out counters; others are keyed in at periodic intervals. Routine reports are preprogrammed and run at intervals or on demand while others are obtained using built-in query languages; display functions built into the system are used by managers to check on status at desk-side computers connected to the MIS by networks. Many sophisticated systems also monitor and display the performance of the company's stock.


The MIS represents the electronic automation of several different kinds of counting, tallying, record-keeping, and accounting techniques of which the by far oldest, of course, was the ledger on which the business owner kept track of his or her business. Automation emerged in the 1880s in the form of tabulating cards which could be sorted and counted. These were the punch-cards still remembered by many: they captured elements of information keyed in on punch-card machines; the cards were then processed by other machines some of which could print out results of tallies. Each card was the equivalent of what today would be called a database record, with different areas on the card treated as fields. World-famous IBM had its start in 1911; it was then called Computing-Tabulating-Recording Company. Before IBM there was C-T-R. Punch cards were used to keep time records and to record weights at scales. The U.S. Census used such cards to record and to manipulate its data as well. When the first computers emerged after World War II punch-card systems were used both as their front end (feeding them data and programs) and as their output (computers cut cards and other machines printed from these). Card systems did not entirely disappear until the 1970s. They were ultimately replaced by magnetic storage media (tape and disks). Computers using such storage media speeded up tallying; the computer introduced calculating functions. MIS developed as the most crucial accounting functions became computerized.

Waves of innovation spread the fundamental virtues of coherent information systems across all corporate functions and to all sizes of businesses in the 1970s, 80s, and 90s. Within companies major functional areas developed their own MIS capabilities; often these were not yet connected: engineering, manufacturing, and inventory systems developed side by side sometimes running on specialized hardware. Personal computers ("micros," PCs) appeared in the 70s and spread widely in the 80s. Some of these were used as free-standing "seeds" of MIS systems serving sales, marketing, and personnel systems, with summarized data from them transferred to the "mainframe." In the 1980s networked PCs appeared and developed into powerful systems in their own right in the 1990s in many companies displacing midsized and small computers. Equipped with powerful database engines, such networks were in turn organized for MIS purposes. Simultaneously, in the 90s, the World Wide Web came of age, morphed into the Internet with a visual interface, connecting all sorts of systems to one another.

Midway through the first decade of the 21st century the narrowly conceived idea of the MIS has become somewhat fuzzy. Management information systems, of course, are still doing their jobs, but their function is now one among many others that feed information to people in business to help them manage. Systems are available for computer assisted design and manufacturing (CAD-CAM); computers supervise industrial processes in power, chemicals, petrochemicals, pipelines, transport systems, etc. Systems manage and transfer money worldwide and communicate worldwide. Virtually all major administrative functions are supported by automated system. Many people now file their taxes over the Internet and have their refunds credited (or money owning deducted) from bank accounts automatically. MIS was thus the first major system of the Information Age. At present the initials IT are coming into universal use. "Information Technology" is now the category to designate any and all software-hardware-communications structures that today work like a virtual nervous system of society at all levels.


If MIS is defined as a computer-based coherent arrangement of information aiding the management function, a small business running even a single computer appropriately equipped and connected is operating a management information system. The term used to be restricted to large systems running on mainframes, but that dated concept is no longer meaningful. A medical practice with a single doctor running software for billing customers, scheduling appointments, connected by the Internet to a network of insurance companies, cross-linked to accounting software capable of cutting checks is de facto an MIS. In the same vein a small manufacturer's rep organization with three principals on the road and an administrative manager at the home office has an MIS system, that system becomes the link between all the parts. It can link to the inventory systems, handle accounting, and serves as the base of communications with each rep, each one carrying a laptop. Virtually all small businesses engaged in consulting, marketing, sales, research, communications, and other service industries have large computer networks on which they deploy substantial databases. MIS has come of age and has become an integral part of small business.

But while virtually every company now uses computers, not all have as yet undertaken the kind of integration described above. To take the last step, however, has become much easierprovided that good reasons are present for doing so. The motivation for organizing information better usually comes from disorderordering again what has already been ordered, and sitting in boxes somewhere, because the company controls its inventory poorly. Motivation may arise also from hearing about others who are exploiting some resource, like a customer list, while the owner's own list is in sixteen pieces all over the place. There are sometimes also reasons for not automating things too much: in modern times a business can grind to a dead halt because "the network is down."

Upgrading the information system usually begins by identifying some kind of a problem and then seeking a solution. In that process a knowledgeable resource-person brought in from the outside can provide a great deal of help. If the problem is over-stocking, for example, solving that problem will often become the starting point for a new information system touching on many other aspects of the business. The first question a consultant is likely to ask will concern how things are managed now. In the description of the process, the discovery of potential solutions will begin. It is usually a good idea to call on two or three service firms for initial consultations; these rarely cost any money. Once the owner feels comfortable with one of these vendors, the process can then be deepened.

The business owner has the option of buying various software packages for various problems and then gradually linking them into a system with the help of a value-added reseller (VAR) or a systems integrator. This solution is probably best for the small business with fewer than 50 employees. Larger companies may in addition also want to explore options offered by application services providers or management service providers (ASPs and MSPs respectively, collectively referred to as xSPs) in installing ERP systems and providing Web services. ASPs deliver high-end business applications to a user from a central web site. MSPs offer on-site or Web-based systems management services to a company. ERP stands for "enterprise resource planning," a class of systems that integrate manufacturing, purchasing, inventory management, and financial data into a single system with or without Web capabilities. ERPs are very popular with larger and midsized firms but were increasingly penetrating the small business sector as well in the mid-2000s.

see also Automation


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                                        Darnay, ECDI

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management information system

management information system (MIS) An information system whose prime purpose is to supply information to management. The early concept of an MIS, commonplace in the 1960s and early 1970s, was that systems analysts would determine the information requirements of individual managers in an organization, and would design systems to supply that information routinely and/or on demand.

Decision support systems (DSS) form a class of MIS, giving managers much greater independence in their use of computer-based information. They depend on the union of office information systems (including personal computing facilities for managers, operated by themselves) with more conventional database and data-processing systems. They assume that managers will be able to build and access their own personal databases, as well as accessing the corporate databases, and that they will be able to formulate their own access enquiries without depending on specialist intermediaries.

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management information system

man·age·ment in·for·ma·tion sys·tem • (abbr. MIS) n. a computerized information-processing system designed to support the activities of company or organizational management.

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MIS Comput. • abbr. management information system.

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MIS Abbrev. for management information system.

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MIS management information system
• manufacturing information system
• marketing information system
• Member of the Institute of Statisticians
• meteorological information system
• Mining Institute of Scotland

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Mis Geology Mississippian

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