The Purpose and Scope of MIS - Management information systems.

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1.1 The Purpose and Scope of MIS 

Management Information Systems can be defined as ‘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’. Source: Kelly

Management Information Systems are primarily concerned with the delivery of information (both internal and external) to organisational members from the shop floor workers to the management. The purpose of MIS is to help the smooth running of the business by providing information on the firms data (such as accounting figures) employees from different levels will then evaluate this information so that decisions can be made to ensure that the business remains competitive and successful.

MIS have been created to support the whole range of business’s administration and regulatory activities and can be seen in all parts of the world and in all types of industries both public and private sector.  In the US, for example, the National Drivers Register has MIS facilities to report on driver licence details, such as all those within a given state whose licence has been revoked or suspended (Danziger, 1991). Similarly, the Environmental Protection Agency is pushing forward in use of MIS to help monitor and control environmental risks.

         Data                                       Information                                    


        Flows                                       Flows

Figure 1 – How an MIS Works

The processing of data into information and communicating that information to the user is the basis of MIS. Form the figure above it is clear to see how this process helps to make decisions. Data is the term for collections of facts and figures; hours worked, part numbers, profit etc. These basic facts are then stored and analysed and generally worked on to produce information in the form required by the user, i.e. the manager. MIS exist in organisations in order to help them achieve objectives, to plan and control their processes and to help deal with uncertainty. It is therefore important that the information that is produced is correct.

There are different types of information such as

  • Strategic information which is usually used to set goals for the organisations and objectives. By doing this it also looks at whether the current objectives are being met. This would usually include financial data such as profitability.
  • Tactical Information which looks at the resources of the business and how they should and are being utilised this will include productivity reports.
  • Operational Information which is concerned that operations are planned and conducted correctly. This is likely to include reports on employee hours and absenteeism, output per employee etc.

Good information is vital in order for the correct decisions to be made. Characteristics of good information are:

  • Relevant for its purpose
  • Accurate
  • Complete
  • Communicated by a correct channel of communication
  • Communicated to the right person
  • Cost Beneficial
  • Easy to use
  • Up to Date

All of these aspects combined should insure that the information reaching the different levels of the organisation would allow them to make correct and successful decisions for the business.

A primary task of management for any firm is coping with change. Management, and the information systems that support them, have to learn to deal with change and to adapt their operations accordingly in order to survive. Competition is a typical change that is taking place in every industry, managers need to be able to view data such as performance related data in order to constantly evaluate their position in the market place. This is important in making sure that they do not begin to lose their market share to their competitors. There is also increased globalisation with lower trade barriers etc. Another change is the faster pace at which business is moving. MIS systems need to be able to cope with these changes and the managers need to ensure that they are receiving the correct information, which will allow them to deal with these changes and make decisions accordingly.

Information Technology is one area, which has seen a lot of change and businesses have adapted to this change and are constantly using new technology. Computers play a big part in information flow in organisations. They are used in order to facilitate the various systems in place by acquiring, monitoring and communicating information. There are many functions of IT, which can produce data of company facts and figures, which is then processed into the information that the different levels in the organisation receive according to their needs. Although computers are not necessarily essential for MIS, they are an important means of producing information.

1.2 The Need for and Use of Internal and External Business Information In Organisations

As we have seen planning requires a lot of information. The types of information and their sources will vary from organisation to organisation but there is a general principle that for long term planning, external information is critical. At lower levels and on a short term basis internal information is important but for long-term goals and ensuring the survival of the company external information is vital.

Types of External Information:

Social Factors – this includes changing views on consumption and savings, what would be the effect of the changing family pattern?

Demographic Trends – This includes how the population structure is changing, is it an ageing population? Economic conditions such as what are the forecasts for growth, inflation and G.D.P. What will be the effect of the European single market?

Political Factors – How will political decisions affect businesses, will it effect trading in overseas markets?

Markets and Competition – How will the market be segmented, what would be the effect of growth in the market, what will competitors be doing?


Technological Change – Will the business be able to change and adapt to new technology, if so how will the changes affect the organisation.

Internal information is just as important to a business, however it is likely to be more useful to lower management for the day to day running of the business and for the short term. The majority of internal information is performance based and so managers and lower levels will be looking at where improvements can be made and will make decisions and set targets based on this information. This is using the feedback process. Feedback is a means towards improvement. It will be part of the output of systems and become part of the input of the system.

Types of Internal Information:

Personal Information – this will include labour skills, and training, sickness and attendance records

Financial Information – this will include data on profit, costs, cash flows and investments

Marketing and Sales information – this will be information on performance, revenues, distribution, market share

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Production and Operational Information – this will be on assets, quality standards, outputs, and lead times.

Research and Development Information – this will focus on new products and developments.

The sources of internal information will be outputs of the organisations MIS, whereas with the external information the sources are likely to be published reports, government statistics, company reports etc.

The Banking Industry is one of the largest and most lucrative industries in the world. With new entrants constantly entering the market and the rapid speed of the changes in the market, these businesses have to keep up with ...

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