While people use business productivity software like word processors, spreadsheets, and graphics programs to complete a variety of tasks, management information systems—users, hardware, and software that support decision-making—are responsible for managing a company’s information needs. Systems for information gathering and storage produce the information managers require for analysis, control, and decision-making.
Computer-based information systems are used in factories to order and track inventory as well as automate production processes. The majority of businesses employ them to manage billing and vendor payments as well as customer orders. Banks process transactions like deposits, ATM withdrawals, and loan payments using a variety of information systems. Most consumer transactions also involve information systems. Information systems keep track of every transaction you make, such as when you purchase groceries, book a hotel room online, or download music from the internet. They also send the data to the appropriate locations.
Most businesses have a variety of information systems, starting with those that handle transactions. Systems that are dynamic and enable data analysis for forecasting, identifying business trends, and modeling business strategies are known as management support systems. Office automation systems enhance internal communication within the company. Operational, tactical, and strategic levels of decision-making are served by different types of information systems. The connection between transaction processing and management support systems, as well as the management levels they support, is depicted in (Figure). Let’s look at how businesses and managers use transaction processing and management support systems to manage information in more detail.
Transaction processing system (TPS) is the foundation of an organization’s integrated information system. The TPS prepares the raw data it receives from internal and external sources for storage in a much larger database that resembles a microcomputer database. In actuality, the company’s crucial data are all kept in a single, enormous database, which serves as its main information source. As was already mentioned, the database management system keeps track of the information and enables users to search the database for the data they require. A Company’s Integrated Information System (Creative Commons Attribution-ShareAlike 4.0 International License) 0 license. ).
There are two ways to update the database: batch processing, in which data are gathered over a period of time and processed all at once; and online, or real-time, processing, in which data are processed as they are made available. Batch processing is ideal for applications like payroll processing that require periodic rather than continuous processing because it makes excellent use of computer resources. Online processing keeps the company’s data current. When you book a flight, the details are entered into the airline’s information system, and you promptly receive confirmation, usually via email. Companies must compare the cost and benefit of online processing because it is more expensive than batch processing. For instance, a factory that is open 24/7 might use real-time processing for inventory and other time-sensitive needs, but overnight batch processing for accounting data.
What is a management information system?
A management information system is a unique system designed to manage data for a company, provide managers with useful question results, or carry out other particular tasks. For instance, a human resources system could help organize employee names, photos, and company data. These information systems can be used by managers to track a department’s activities or gauge progress by comparing them to earlier results. Certain management information systems can periodically gather data throughout the working day. Once the system stores it, users can generate reports on-demand.
12 types of management information systems
There are many management information systems, including:
1. Process control
Some management information systems manage the various production processes for companies with production lines. A process control system keeps an eye on operations like making steel, processing oil, or building cars. The process control system continuously collects data during the product creation process in order to generate reports about the system performance. The process control system can show the irregularity if a process step is slower or faster than usual. Since manufacturing businesses run multiple processes concurrently, process control software can be crucial for regulating product and performance.
Process control systems can also alert managers to certain critical events that take place during a process. For instance, if a steel defect is discovered during automated testing in a steel processing line, a process control system can generate a report. A product’s regularity and quality can both be assessed using the process control system.
2. Management reporting system
The management reporting system produces reports for company operations. These can include financial, operational, attendance, accident and efficiency reports. A management reporting system aids in managing some reports from other systems to streamline information for management personnel, even though it does not manage every process within a system. For instance, various systems assess the lines, attendance, and error reports of a production company. Any reports from the three systems are combined and converted into information by a management reporting system for management staff to review.
Without collecting information from every department, managers can monitor a company’s operations thanks to management reporting systems. Some businesses may even implement a system separate from the management reporting system that generates a thorough report for managers to review. Managers can assess the financial output, operational effectiveness, and goal-achieving capabilities of the company using management reporting systems.
3. Inventory control
Inventory management aids managers in monitoring the status of a department’s or organization’s inventory. Through a single report, managers can use inventory control to comprehend the effects of any potential spoilage, theft, or sale of inventory. This can assist purchasing managers in determining when to restock particular retail items. Inventory management can keep track of inventory movements within the warehouse and notify managers when everything safely reaches the destination.
An inventory control system can assist in displaying returns from customers for any reason, as well as how frequently they occur. A management information system for inventory control can be crucial for effectiveness and continuous improvement because a business that produces goods for direct sales needs to keep inventory to support business operations.
4. Sales and marketing systems
Managers can monitor a company’s sales and advertising effectiveness with the aid of sales and marketing systems. Through customer reviews and feedback, marketing systems can produce reports that assist managers in enhancing the quality of their products. Through reports, they can also assist managers in comprehending distribution networks and determining which ones result in customer reactions. Marketing managers can use reports from sales systems to learn more about anticipated sales and evaluate them against current profits. They can use this to recognize patterns and come up with solutions for future growth.
Managers can also track the success of in-store advertising campaigns and where they are in the rotation using sales and marketing systems. These systems can keep track of price discrepancies between products as well as the promotions and advertising campaigns that specific retailers are currently using. This can assist managers in tracking product sales and directing additional promotions or advertising.
5. Human resource systems
HR managers can manage the information flowing throughout the company thanks to human resource systems. The company system includes electronic equipment like company computers, phones, and other machines. HR managers can monitor the actions of managers, staff members, and even contractors with the aid of an information management system for human resources, which will improve daily administration. After hiring, the HR department monitors activity to make sure all workers adhere to company standards.
A system for managing human resources can keep track of things like payroll, employee benefits, and retirement accounts. It might assist in managing communication demands like alerts for legal compliance, instruction, HR-led meetings, and policy updates. Work attendance, timesheets, and employee sick or vacation days are additional items that can be tracked. Additionally, managers can use this system to automate hiring by scanning potential candidates’ resumes for crucial information and alerting the team if they meet certain criteria.
6. Accounting and finance systems
Systems for accounting and finance assist managers in keeping tabs on a company’s investments or assets. To carry out tasks like payroll, local tax compliance, federal law compliance, pension fund management, and state law adherence, managers can use accounting or finance systems. These systems allow auditors to produce annual reports for management as well as reports for their audits. A business’s daily transactions, such as bank deposits, transfers, income, and returns, can be managed with the aid of an accounting and finance system.
Managers can better understand financial activity and prepare for an influx or recess of funds when the system manages these financial activities. Additionally, the system generates balance sheets for all reports and profit-and-loss statements. Accounting systems are useful for monitoring a company’s financial health because balance sheets display the company’s financial situation. A manager can use these records to support departmental or new financial strategies, as well as profit growth.
7. Decision support systems
Systems that support decision-making gather data from internal and external sources to assist managers in making decisions for a business Data from other departments, such as financial data, inventory data, or current sales margins over the course of a quarter, are examples of internal sources. Sources of external data include things like industry trends, interest rates, or prices from competitors or suppliers. Using a decision support system, a manager can make choices regarding building expansion, annual work quotas, or new policy creation.
8. Expert systems
Expert systems are algorithms that assist novice workers in interacting with and developing ideas in a particular field. Expert systems may be created by experts in a field to assist new hires, contractors, or managers. They might even employ artificial intelligence to support various employees more based on their prior behavior. For instance, the artificial intelligence within a system for setting up a new employee’s email may prompt a help button or other assistance tip if it detects inactivity for a prolonged period.
9. Executive information system
Executive information systems report company data to executives directly. It can compile processing records, financial data, and summaries of corrective actions into a report that is simple to read. These executive information systems can present data using summaries, graphs, charts, and spreadsheets, among other formats. Employees who receive these reports can use them to conduct departmental comparison research to find new opportunities to boost organizational efficiency.
10. Transaction system
Data is gathered by transaction process systems throughout an organization’s daily transactional activities. Transaction systems can automate financial operations like payroll that require deposits. They can also keep an eye on other routine tasks like queues of goods or reservations for various materials. Transaction systems, unlike financial systems, are automatic. For consistent processes, such as materials a department always uses or money that moves between accounts once a month, managers orchestrate transaction systems.
11. School information management systems
School information management systems assist educational institutions in effectively managing daily operations. These systems manage a number of potentially automated processes, including employee schedules, payroll, and attendance. With school information systems, faculty and staff can concentrate on more fruitful endeavors while the management system takes care of automated tasks. Programmers create school information management systems for academic purposes, but they also have a lot in common with those who create financial and human resource management systems.
12. Local databases
Local databases are community-managed systems that give local residents access to information. They might include details about business listings, public service announcements, social surveys, and publicly available information. Local systems can be developed by managers, mayors, or council members for a variety of purposes, making them some of the most customized management information system types. To assist staff in managing database information such as employee profiles, training data, process reports, and general employee management, managers may develop local database systems.
Types of Information Systems (TPS, MIS, and DSS)
FAQ
What are the 5 main types of Management Information Systems MIS )?
- Process Control :
- Management Reporting System :
- Inventory control :
- Sales and Marketing :
- Human resource (Enterprise collaboration/Office automation) :
- Accounting and finance :
- Decision Support System :
- Expert system :
What are the four major types of Management Information Systems?
- Low level workers – Transaction Processing Systems.
- Middle Managers – Management Information Systems.
- Senior Managers – Decision Support Systems.
- Executives – Executive Information Systems.
How many types of systems are there in MIS?
- Major Enterprise Applications.
- MIS – Major Enterprise Applications.
- MIS – Introduction.
- MIS – Enterprise Resource Planning.
- MIS – Customer Relationship Mgmt.
- MIS – Decision Support System.
- Knowledge Management System.
- MIS – Content Management System.
