Management Information systems – An Overview
ObjectivesAfter you have studied this chapter you will:
have had an introduction to the book as a whole;
know that the book takes a decision focus to management information systems;
understand that it is the user who determines what is information not the producer;
know the main knowledge requirements for MIS design.
What is a management information system (MIS)?
There is no universally accepted definition of an MIS and those that exist reflect the emphasis – and prejudices! – of the particular writer. The term MIS has become almost synonymous with computer based data processing and indeed many books with MIS in the title tum out to exclusively concerned with topics such as systems analysis, file design and the various other technical facets of .computer based systems. This emphasis results in a production – orientated definition of MIS of which the following by Kelly is a typical example:
„Management Information System: The combination of human and computer – based resources that results in the collection storage, retrieval, communication and use of data for the purpose of efficient management of operations and for business planning.“
This manual does not take a production – orientated view and emphasises that the means of producing the information – whether by computer or manual methods – is a secondary consideration compared with the importance of ensuring that the correct problems are addressed and that relevant information is available when, where, and in the form required to be usable by management. Then, and only then, should the means of producing the information be considered.
This manual takes a decision focus to the design and operation of MIS which means ,that the information system is viewed as a means of processing data, ie the routine facts and figures of the organisation, into information which is then used for decision making. It is changes in decision behaviour which distinguish data from information. Figure 1/1 summarises this approach.
This means that MIS are qualitatively different from data processing systems and that management involvement and interaction between information specialists and management is the key feature of successful MIS design.Having regard to the emphasis of this manual an MIS can be defined as:
A system to convert data from internal and external sources into information and to communicate that information, in an appropriate form, to managers at all levels in all functions to enable them to make timely and effective decisions for planning, directing and controlling the activities for which they are responsible.
Note the emphasis on the use of information in the definition, not on how it is produced.
Problems with MIS
There is abundant evidence from numerous surveys both in the UK and the USA that existing MIS, often using advanced computer equipment, have had relatively little success in providing management with the information it needs. The typical reasons discovered for this include the following:
• lack of management involvement with the design of the MIS;
• narrow and/or inappropriate emphasis of the computer system;
• undue concentration on low level data processing applications particularly in the accounting area;
• lack of management knowledge of computers;
• poor appreciation by information specialists of management_s true information requirements and of organisational problems;
• lack of top management support
To be successful an MIS must be designed and operated with due regard to organisation and behavioural principles as well as technical factors. Management must be informed enough to make an effective contribution to systems design and information specialists (systems analysts, accountants, operations researchers and others) must become more aware of managerial functions and needs so that, jointly, more effective MIS are developed.
Management do not always know what information they need and information specialists often do not know enough about management in order to produce relevant information for the managers they serve. An example given by Professor Kaplan graphically illustrates this point.
He reported that a group of American industrialists visiting Japan found that their counterparts were regularly supplied with information on the proportion of products which pass through the factory without re-working or rectification. They found that a typical percentage of products that needed no re-working was 92%. The American managers found that this information was not available to them in their factories at home but on investigation it was found that their ratio was 8%. They then worked on this factor for 6 months at which point the ratio had moved up to 66% and, more importantly, productivity was 25% higher.
There is no doubt that better communication between management and information specialists and a wider knowledge by both groups of MIS principles would greatly facilitate the task of developing relevant and appropriate information systems. There is/ unfortunately, no simple checklist of essential features which, if followed, will automatically produce the perfect MIS. What is required is an awareness and understanding of key principles and function so that the design, implementation and operation of the MIS is the result of informed decisions and judgements rather than
haphazard development without regard to real organisational requirements.
Knowledge Requirements for MIS
By their nature, MIS draw upon a wide and growing range of concepts and techniques and Figure 1/2 shows the major areas of knowledge which are considered to be the most important in the development and operation of MIS.Figure 1/2 Knowledge Requirements for the Development & Operation of MIS
Figure 1/2 has been drawn not only to show the various areas of knowledge, which are each developed in subsequent chapters of the manual, but also to show that inter-relationships exist between all the areas. This point is stressed because the knowledge areas are not self-contained, independent entities but interact with, and complement, each other. The understanding of these interactions and cross relationships makes the task of designing MIS much more difficult but conversely, enhances the likelihood of designing relevant information systems which make a positive contribution to the organisation.