Management Information Systems

A management information system is a system to convert data from internal and external sources into information. It must also communicate that information in an appropriate form to managers at different levels. Its purpose is to enable the managers to make effective decisions for planning, directing and controlling the activities for which they are responsible.

Normally the bulk of data that a MIS processes will come from internal sources - particularly from the day to day data processing activities that the computer system will be performing. External sources may include data from market research, data purchased from other organisations or data that is publicly available

An important function of the MIS will be to select and summarise this data into a format that is usable by the manager. The manager is unlikely to need details of all transactions that have taken place. A more useful format would be a summary based on headings.

In general, the higher the level of management, the less detail will be required. For example a supermarket chain stores manger will need summary information about stock ordered and stock sold. The general manager however requires summary information giving details of expenditure under the headings salaries, stock, losses, and advertising. The overall management of the supermarket chain will want to know only the overall profit and loss figures for individual shops.

Supervisory management will need information that applies to short term needs such as holiday rotas or lists of items that are out of stock. They need information for immediate short term decision making and normally the information will be in tabular form with a standard layout.

Middle management require information that relates to the manager's immediate area of responsibility and that allows him or her to engage in short term tactical planning. An example might be whether or not to carry a particular item in a supermarket branch, based on previous sales over the past three months. Graphics may be useful for some of this information.

Senior management requires information to allow long term planning to take place. The information will show an overall organisational picture rather than being cluttered by too much detail, although the detail would be available on request. Graphics are likely to play an important part in presenting information at this level.

Much information will be presented in tabular form but trends are best illustrated by a graph. Pie charts and bar charts will also be used as appropriate.

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