Information System is the use of information technology, people, and business processes. To record, store and ultimately process data in an attempt to produce information that can be helpful to decision-makers daily. The idea behind MIS is to create a system where data extracts from a variety of sources and insights can drive support for business growth.
In this piece, we’ll be looking at the various types of Information systems, components of MIS, and the differences between a manual and computerized information system. You would be able to gain ample knowledge about the system and how it operates in today’s world.
Types Of Information Systems
With information systems, you get the option of choosing the one that fits in with your particular needs. Also, provides you just the kind of access that you’re looking for. This might sound a little confusing. So, let’s break down the three major levels of users in an organization and the type of information systems they might be using.
Transaction Processing Systems (TPS)
Used on a rather regular basis, this type of information system records the day-to-day transactions of a business.
A rather common example of this is a Point of Sale (POS) system. Which is simply used to record the daily sales of a business.
Decision Support Systems (DSS)
In the last step of this pyramid, the decision support systems are there solely for top-level managers to make decisions. The input for this comes from the MIS. But, they might also garner input from external sources such as current market forces, competition, etc.
Management Information Systems (MIS)
This is the area of focus for this particular piece as you’ve read above. MIS refers to systems that are in place to guide managers and help them derive tactics to make semi-structured decisions.
The input for this particular system comes from the output that the transaction processing system creates at the end of the day. In a way, one feeds into the other.
Before we get into the specifics of MIS, we must answer the simple question: Why is there even a need for MIS?
Importance Of MIS
In today’s world, you not only need to make the right calls at the right moments. Also, make sure that those decisions support through evidence and provide sound reasoning. To do that and more is why companies invest in MIS systems.
Let’s have a look at some justifications for installing an MIS system into your organization:
- Decision-makers need the information to effective decisions daily – MIS makes this possible by providing them with adequate information. This not only sustains their business but also provides them with enough knowledge concerning the workings of their operations. Also, how efficient their current processes are.
- Facilitating communications – With MIS, all employees within the organization can gain access to the required information for day-to-day operations. We can also integrate Short Message Service (SMS) and email to channel communication easily across to customers and suppliers from within the MIS system that the organization is using.
- Recordkeeping – You always do need an integrated system that can hold all of your company information and record transactions for your organization. Not only is the data recorded and stored. It also provides a reference point for any past transactions that might need some discovery or discussion.
Components Of MIS
The major components of a typical MIS system are as follows:
People – refers to simply anyone and everyone who uses the information system and has access to the data available on the platform
Data – all data that is being recorded on the information systems and stores within its records
Business Procedures – all procedures put in place on the ways to record, store and analyze data regularly
Hardware – these include servers, workstations, networking equipment, printers, and so on.
Software – any programs used to handle the data and include programs such as spreadsheet programs, database software, etc.
When we dive into the types of Management information systems at play. We realize how a major chunk of the pressure lies on the MIS – not only does it act as a bridge between the initial data and the final decision that’s taken. But, it also provides room for research and the studying of external factors to garner enough data to make an informed decision.
Manual Vs Computerized Information System
When working with management information systems, you have the option to either go down a manual route or pick the computerized information system to work with. Since data is at the heart of every business. There obviously needs to be a system that is not only adept at dealing with the massive influx of data. But, also is adept at data retrieval and storage.
Let’s take a glance at both manual and computerized information systems to better understand how each of them works.
Manual Information System
As the name suggests, this is a system that does not use any computerized devices. The entire process of recording, storing, and retrieving data completes manually by the staff responsible for the information system.
Components Of Manual Information System
The breakdown of components for a manual information system will be somewhat like this:
People – those individuals that are the recipients of the information system and interact with it daily
Business procedures – all measures put into place that helps define the rules for the processing of data, the storage, and its analysis. Also, helping produce information that helps the business in developing strategies for the future
Data – a collective record of the day to day transactions
Filing system – a rather organized manner of storing information
Reports – all reports generated manually that help analyzes the data from the filing system and then cumulatively compile data.
This obviously follows a pattern of sorts whereby the information received by the individual i.e. people, collects through business procedures. This then leads to the recording and filing of the data generated based on the business procedures. Once this is done, that very data is then analyzed and reported in particular forms to give an overall picture of the entire day’s workings.
Computerized Information System
Created to counter the challenges faced by the manual system, the computerized system came to combine software and hardware to record, store, analyze and retrieve information.
While the computerized system may have its drawbacks due to the high setup cost and the overwhelming reliance on technology, it still provides immense potential and offers businesses a wide variety of advantages that we’ll be looking at next.
Advantages Of Computerized Information System
Fast data processing and information retrieval – It’s fairly obvious that a computerized system would process data at a faster rate as compared to manual labor and not only will this lead to faster results but also improve client/customer service.
Improved data accuracy – By using an automatic system, you’re directly reducing the risk of errors since data validation and verification is easier to implement in a computerized system.
Improved security – With automation, comes more security. Not only can access restricts to the database server but the information can implement other security controls such as user authentication, biometric authentication, and even individualized access controls.
Reduced data duplication – With the correlations that exist within these systems. It’s possible that if one department updates a piece of information. It will automatically appear to other systems present on the same line.
Improved backup systems – In today’s world where security is key, one needs as many backups as one can get. With the cloud, it’s become easier to not only save data but also recover data if the hardware goes through a malfunction.
Easy access to information – With the availability of web and mobile technologies, it’s become easier for anyone and everyone to access data from literally anywhere and always be on the go.
Summing It All Up
Management Information Systems have now cemented themselves as a major player in the world of business. With more and more organizations deciding to incorporate it into their everyday workings. To ensure that their operations are carried out as smoothly as possible.
With computerized information systems also becoming widely used. The efficiency at which businesses operate has also improved massively. This has led to better overall results and performances.
With a system like this, businesses can cut down on communication barriers and work in cohesion as a single unit. With each representing a particular stage in the process and playing their role to support the other. It is through this co-dependency and the teamwork that ensues, that businesses are now able to achieve targets that might have seemed unimaginable before.