Storage: In every MIS, the data must be stored with as much detail as possible. It needs to be backed up regularly to avoid data loss, which can be a tragedy. The IT department may also decide to store various summaries of data for consistency and ease of use. It is also important that the information is stored over different locations, should anything happen to the original data.
Processing: This is the action that turns data into information, so it is when it becomes useful for a business. It can be processed in two ways, simple and complex. At its simplest, data can be processed simply by adding up all items sold by a supermarket. After this, totals by store, by product, by time of the day etc. would be produced. A more complex way of processing data is by using a computer program, or even the user to do complex calculations, select criteria to include or exclude and to make assumptions about data that is missing.
Output: It can be performed in two formats: graphical (pictures, charts) or textual (words). Textual output is the best option where it is important to examine detail and to know exact values. On the other hand, graphical output is usually the best for seeing the big picture, presenting the proper information to the management team and understanding trends. There is a common way of using both types of outputs, for example using the graphical side to identify areas of interest and focus on the details, and using the textual format to see the lowest level of detail. The output must be presented depending on the user’s needs. A good example is a manager in a supermarket; he would mainly want to see sales by product or product group, and the store manager have a specific interest in what is happening in their own store. A regional manager would want to see what’s happening across all stores in their region, because it is a massive part of their job, so the rule is that the default output for the user should be the one that they are interested in.
Control and feedback loops: These two loops are what happen in the organization, as a result of the output from an information system. This will have an effect, direct or not, on future inputs to the information system. An automated example is a data feed of actually sales data to a computerised stock control system. By doing this, it could note which products have increased their sales and reorder these products from suppliers in order to reduce the chances of being out of stock. Another similar example is the management team having a look at the reports, to check out which products are selling well and which aren’t. In order to maximise profit, the business might choose to increase the price of the products that are making good sales and reduce the price or offer a promotion on those that are not selling well.
Closed and open systems: An open system uses both graphical and textual formats, and is aimed more at analysts. There is a great range on what to report on and the format in which the information is showed. This type of power may mean that significant training may be needed before the systems can be used effectively. In a closed system, the user has a limited choice about what to report on, because they are limited to predefined output formats. They are often easy to use, and they mainly use graphical formats and are often aimed at management.
A MIS has 5 key elements, which are:
Data: Data input into a system is subject to its cost and timescales, so it is really important that it is as accurate as it can be. It needs to be stored logically. After this step is complete, it then needs to be summarised to create information that is most useful for the systems’ users, although it might not be the most cost-effective solution or the most logical.
People: They are involved in two tasks, capturing data and exploiting information. It is of added value to motivate whoever captures the data, by telling them how important it is for the company to get exploited data.
Hardware: Usually it does not require any specialised hardware in order to be run. In a large organization, it is common to be used in a server, either shared or dedicated. They also have Internet/Intranet available, should it be needed by its users. In a smaller business, it may run on the sales or finance director’s PC.
Software: A Management Information System can be built easier that most people think, with standard software, although it is advisable to be built with specialized software, which is already pre-configured with most of the standard software features. The MIS can be configured by describing its structure and the database, where the origin of the data is, how to summarise it and what standard queries will be needed. The cost varies a lot; the cheapest option offers a limited amount of functions for one PC, whereas the most expensive provides high-tech performance for a massive amount of users, and also vast amounts of data.
Telecommunications: There is the possibility of an MIS being used over the Internet, but this has serious security implications. Most of MIS are delivered through an Intranet of a company, within its firewall, for protection over competitive business and others looking to obtain valuable management information. This information can help a business progress in many ways. Sometimes business have to use a dedicated telecommunications network in order to have the best security possible.
