Information system’s Support in Management

Decision Making
Computer-based or manual system that transforms data into information useful in the support of
decision making. MIS can be classified as performing three functions:
(1) To generate reports-for example, financial statements, inventory status reports, or
performance reports needed for routine or non-routine purposes.
(2) To answer what-if questions asked by management. For example, questions such as "What
would happen to cash flow if the company changes its credit term for its customers?" can be
answered by MIS. This type of MIS can be called Simulation.
(3) To support decision making. This type of MIS is appropriately called Decision Support
System (DSS). DSS attempts to integrate the decision maker, the data base, and the quantitative
models being used.
Before one can explain management information systems, 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, that is, observation, 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 that individuals and 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 out growth 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 consist of computer
resources, people, and procedures used in the modern business enterprise. The term MIS stands
for management information systems. 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
mainframe to the desktop and portable PCs.
Background
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
invented the first mechanical adding machine so that figures could be added to provide
information. Almost two hundred years later, Charles Babbage, 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, 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, 50s, 60s,
and 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. In the early 1980s, IBM
developed its PC, and since then, the personal computer industry has mush roomed. Almost
every management information system revolves around some kind of computer hardware and
software.
Management information systems are be coming more important, and MIS personnel are more
visible than 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.
The Mis Job Today
MIS personnel must be technically qualified to work with computer hardware, software, and
computer information systems. Currently, colleges and universities cannot produce enough MIS
personnel for business needs, and job opportunities are great. 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 the systems analysis, the 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. At this time, 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.
Types of Systems
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. Thus there is no 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.
Bibliography
Rochester, Jack B. (1996). "Tools for Knowledge Workers." I Using Computers in Information.
Indianapolis, IN: Que Education and Training.
Stair, Ralph M. (1996). Principles of Information Systems and Managerial Approach, 2nd ed.
Cincinnati, OH: Boyd & Fraser.
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