ISDP2: Management information system – UNIT 3 MANAGEMENT INFORMATION SYSTEMS (MIS)

• Overview

The field of Management Information Systems (MIS) addresses the effective use of human and computer resources to realize important business objectives. MIS professionals are responsible for developing information systems that provide accurate and timely information to all levels of decision-making in a business organization. MIS has evolved into an exciting area of study in which students are exposed to leading-edge technologies and trained in their deployment. With information systems permeating every functional area of business, this knowledge has become an essential component of a student’s educational preparation.

• MIS and DSS

A management information system (MIS) is an organized collection of people, procedures, and devices used to provide information. This information can relate to internal and external intelligence, and it can assist with planning, staffing, organizing, directing, and controlling. The overall purpose of a management information system is to provide the right information to the right manager or decision maker at the right time. As defined, a management information system is a specialized data processing system. All management information systems are also data processing systems, but only those data processing systems that provide useful information are considered management information systems.

A decision support system (DSS) is an organized collection of people, procedures, and devices used to support decision making. While decision support systems and management information systems appear to be the same, there are important differences. The major impact of a management information system is on structured tasks, and the major payoff has been to improve efficiency. In many cases, managers play a passive role in the development of the system. A decision support system has an impact on both structured tasks and unstructured tasks that require managerial judgment, and the major payoff has been to improve effectiveness. In addition, managers play an active role in the development and implementation of the system. A decision support system works from a managerial perspective, and it recognizes that different managerial styles and decision types require different systems. A decision support system can have a significant impact on the decision-making process, while a management information system does not. The overall emphasis is to support rather than replace managerial decision making.

• Emergence of DSS

There is a great deal of excitement about the potential of decision support systems. New products are being developed that claim to be decision support systems, and academics are conducting numerous research projects to investigate this new computer-related tool. Due to problems with traditional management information systems, there may be advantages to taking a fresh, new approach.

Decision support systems concentrate on a particular manager’s decision-making style. The overall process involves investigating a particular problem, finding out how a manager solves this problem, seeing what actual information is needed, and then developing tools and techniques to generate the information and to support the decision-making process in general. In other words, the decision support system ties directly into an individual’s decision-making style. In some cases, small systems are developed, run, and tested to make sure they are satisfying a decision maker’s needs. This approach is called prototyping. With prototyping, a small prototype, or model, is made on the computer. This prototype is then tested and refined numerous times until a manager is satisfied with the decision support received from the computer system. This is unlike the traditional approach, which first generated information needs and then developed computer programs to retrieve the information without testing to make sure the information needs were legitimate.

This new excitement does not mean that all of the manager’s problems will be solved by the development and use of a decision support system. Indeed, many data processing experts are skeptical of decision support systems. Other people feel that a decision support system is a lot of hype for a technique that is not radically different from an information system.

Regardless of the terminology used, there is a need for an effective system to help managers make good decisions. These systems must produce the right type and right amount of information. Too much information can be as dangerous as too little. During a crisis or critical corporate situation, all information should be turned off except that information directly dealing with the crisis, problem, or situation at hand.

• The Information Resource

One of the most difficult problems facing MIS and DSS designers is managing a vast information resource. Many organizations have huge data bases containing millions of facts. In many of these organizations, all of this data and information is just sitting there. There is no effective way to gain access to it. In an attempt to manage data and information, a number of organizations have adopted the notion of information resource management (IRM). The idea is to consider information like any other resource in an organization. Like labor, capital, and raw materials, information needs to be managed efficiently and effectively. Indeed, for many organizations, information can be the most valuable asset.

Even with the use of modem data base management systems, managing information can be difficult. Today it is impossible for most organizations to place all data on direct access storage devices and use data base management systems for immediate retrieval. Thus, it is important to identify information and data within the data base that is critical and requires immediate access. Academicians and professionals are investigating ways to identify important information in large data bases. This is called information requirements analysis. In the past, managers were asked to make a list of the information items important to their jobs. Unfortunately, many managers do not know what information they need. As a result, formalized procedures have been developed to determine information requirements for managers and decision makers. One such technique is critical success factors (CSF). This technique, developed at MIT, has shown early success in helping managers determine what information they need to perform their jobs. Typically, three to six hours of interviews are conducted in two or more separate sessions. The first interview session outlines a manager’s goals and objectives. The important factors needed to achieve these goals are then determined. These factors are called critical success factors (which is how the technique was named). During the first interview session, the relationships between the goals and the CSFs are determined and clarified. During the second interview session, the results of the first interview are reviewed and refined. Then possible reports that can be generated to obtain corporate goals are discussed in depth. In some cases, a third or even fourth session may be required to obtain agreement on the critical success factors and the reports needed to help obtain corporate goals.

• CONCLUSION

MIS and DSS provide mechanisms around which information, no matter how vast or complex in an organization, can be tamed and channeled into an effective weapon of organizational success and enhancement.