Management Information Systems and Benefits for Business : Along with technological developments in the business world, management information systems are needed to help business activities run well. Almost in every field definitely need a system that can control and manage information well and neatly.
The main purpose of making an information system is to help business activities and human work. So that it can be implemented in a more systematic and structured manner.
Definition of Management Information System
Management information system (MIS) is a group or set of processes where data can be processed, analyzed, and displayed so that the data becomes useful for the needs of making a decision. This system is a very useful tool to support and control the company’s operations.
The main purpose of this system is to collect and organize all data from various levels of the company, summarize, then facilitate and improve the quality of decision making to increase the productivity and profitability of a company.
These systems are computer based and can be excel sheets or more complex platforms. In addition, data can be accessed and processed internally and externally. Thus, the information system used is more efficient and productive.
Functions of Management Information Systems in Business
This system is needed because it has a high level of complexity in business organizations. If you don’t have the right information, no organization or business will be able to make a good decision.
Every decision making of a business or organization must be based on relevant and verified information. If you don’t have relevant or verified information, then your business can suffer huge losses and productivity will decrease.
The following are the functions of a SIM in business:
1. Assist in the decision-making process
A system must of course be based on relevant information and from valid sources. The information must contain a fact so that the decision-making process goes well. With a management information system in your business, decision making will be easier and well structured.
2. Help in finding a problem
As is well known, this system will provide relevant information in every aspect of the activity. If there is an error in management, the information on the SIM will provide a solution to the problem.
3. Help in comparing business performance
In this system also store history data and store data in a database (database). So the management information system can compare your business performance more easily and quickly.
4. Assist in coordination between departments
Sometimes, in some business companies have several departments and carry out their respective duties. So there needs to be a system that can coordinate each department well. SIM here, has the ability to help coordinate each department.
Exchange of information becomes better and faster with structured management. A healthy relationship will be formed in everyone in one department with other departments in the exchange of information.
Management Process Stages
The management process has several stages which can be defined as follows:
The first process is the formulation stage which is arranged in detail to achieve the final goal and is included in management activities. The planning stage has requirements to set goals and identify methods to achieve an objective (objective).
The second stage goes into the control process, where after the plan has been successfully made, the next step is to enter the process of implementing the plan. The role of managers and employees is to monitor its implementation so that it runs smoothly and properly.
3. Decision Making
The last stage, the selection process will be carried out among various alternative choices. The managerial function acts as a liaison between the planning and control processes. A manager must be able to between goals as well as methods to carry out these goals.
Management Information System Components
A management information system needs to be built with several components that are interrelated and have an influence on one information with another. The design of a MIS involves the following components:
In a SIM, humans play a very important role. The role of humans themselves is to design, process, operate, build, and use the system.
So that the information generated on the SIM will provide benefits for humans and the business being run. Human resources are needed in order to create a system that runs properly and properly.
Management information systems are made by humans to produce information from raw data so that it becomes data that can be processed and can be useful for businesses. Information that is useful here is information that is relevant, comparable, has high accuracy, is timely, and can be accounted for.
Information that meets the requirements above, will provide great benefits for humans and the business they run. Processing of data and information will be easier and tested if the business is developed using the right SIM.
Management information system is a large system which is formed from several subsystems that have different tasks, but are interconnected and integrated. The subsystem in the management information system is tasked with collecting, processing, and perfecting data so as to produce information.
4. Management organization
Every business and business forms a management organization to achieve the goals of its business and business. The function of the management organization itself is to organize, implement, plan, and control the operations of the company or organization.
5. Decision making
Decision making can be taken if the business has relevant and accountable information. A businessman or entrepreneur cannot make good decisions if there is no SIM as a forum for managing information.
It can be said that the basis of consideration for making a decision is to use a management information system. In addition, information must also be relevant and contain facts and not contain elements of engineering.
Types of Reports Generated
In general, management information systems are used to store data and generate reports that will be used by business professionals for analysis and decision making. There are at least three types of reports generated from SIM:
1. Real – Time
The first type of report is real-time or it can be interpreted that the report can be monitored directly. This type of report is usually used in business to see any changes to information in real time and there is no time limit.
For example, someone to customer service who monitors the spike in call volume so that they can solve the problem as soon as possible. With this type of real-time report, it can also increase the productivity of the business you run.
2. Ad – Hoc
This report is only generated once by the user to answer a question. If the report is useful, then you can convert the report into a scheduled report.
This type of report can only be used once and serves to create reports in a short period of time. A business needs a system that can manage reports quickly and therefore, it is very suitable to use ad-hoc.
The third report is a report that is made periodically. Scheduled reports allow a company or organization to manage data periodically from time to time. The applicant has provided to retrieve and organize data.
An example of a scheduled report is that a distributor can compare sales figures from different stores and use different parameters. This can increase the profits of the business and can monitor business market conditions properly.
Category Management Information System (MIS)
Management information system has a very broad understanding, so it can be categorized in a system, including the following.
1. Business Intelligence System (BIS)
This category will usually be used by companies that make business decision systems based on the collection, integration, and analysis of the data and information collected. This system has similarities with the EIS, but only managers and lower-level executives use the BIS.
2. Executive Information System (EIS)
Senior-level management more often uses EIS to assist in making decisions to influence the organization. What executives need to prepare is data with a high level of accuracy and the ability to read data precisely and accurately.
3. Customer Relationship Management (CRM)
CRM stores various information about customers, including sales, contact information, and earned revenue opportunities. The marketing department, customer service, business analyst, and sales team will often use a CRM system.
4. Sales Force Automation System (SFA)
This particular component of the SFA system is capable of automating many tasks performed by a sales team or department. These components include contact management, tracking, contact creation, and order management.
5. Financial Accounting System (FAS)
This category is devoted to each department engaged in accounting and finance. An example of a task being carried out is calculating accounts payable (AP) and accounts receivable (AR).
6. Knowledge Management System (KMS)
A customer service can use KMS to answer any questions, as well as provide solutions to existing problems.
7. Marketing Information System (MkIS)
The marketing team uses MkIS to be able to report on the effectiveness of the marketing process that has been carried out. In addition, it is also used as data that can be analyzed to help marketing in the future.
8. Supply Chain Management System (SCM)
Examples of companies that use SCM are retail and manufacturing businesses, which are used to track the flow of resources, materials and services from early development to product delivery or distribution.
9. Transaction Processing System (TPS)
Point of Sale (POS) is also included in the TPS, where the system can allow tourists to find hotels or lodging places quickly and with quality. The job of an employee here is to use the best possible data to report sales trends incrementally.
10. Human Resource Management System (HRMS)
This last category is used to record the performance of employees, and to compile employee salary data reports.
Examples of Management Information Systems
The following is an example of a management information system for the business you are developing:
1. Enterprise Resource Planning (ERP)
For this system is very often used by large companies. It is possible that small and start-up companies can also use this system. ERP itself is used to manage and manage integrated data between units within the company.
2. Supply Chain Management (SCM)
This system is very useful for the management to perform data integration. Examples such as raw material supply management starting from suppliers, manufacturers, retailers, to consumers.
3. Transaction Processing System (TPS)
The next system is TPS which functions to process large amounts of data as well as large transactions that are carried out regularly. This system is perfect for businesses engaged in finance such as inventory, banks, etc.
4. Office Automation System (OAS)
The fourth system is OAS which is used to simplify and expedite communication between departments within one company. Then, can integrate between servers within the company. An example is the use of e-mail.
5. Informatic Management System (IMS)
In this system supports the process spectrum of tasks in the organization. What is meant by spectrum here is combining several tasks into one and integrated with each other.
In addition, IMS can also integrate several information functions with computerized programs such as e-procurement. This system is very suitable for analyzing an information to make a decision.
6. Knowledge Work System (KWS)
This one system is more directed in terms of integrating new knowledge into an organization or entity. Knowledge means something new that can increase productivity in the business you run.
7. Group Decision Support System (GDSS) and Computer – Support Collaborative Work System (CSCWS)
GDSS itself is a system that functions to find a solution to a problem that is obtained through the collection of knowledge in groups and is not individual. In general, it can be in the form of questionnaires, scenarios, or consultations. An example of such a system is e-government.
8. Expert System (ES) and Artificial Intelligent (AI)
This system is slightly different from other systems, because the implementation uses artificial intelligence. The function of this system is to be able to analyze problems with the help of experts who have been programmed previously. An example of the application of ES and AI is the creation of a mechanical schedule system.
9. Executive Support System (ESS)
This system tends to benefit a manager. Because ESS is able to assist managers in helping interact with the company environment. The interaction can be in the form of graphic aids and other communication tools.
10. Decision Support System (DSS)
For this last system is very helpful for a manager in making a decision by observing the environment within the company. Observations here are very important so that the business that is run can develop and increase productivity.
Benefits of Management Information Systems
By using a management information system at the company, it can improve the performance of the business being run. The following are some of the benefits of using a management information system in business:
Managers can compare planned performance results and can analyze weaknesses and strengths in performance and business plans.
A manager can also have the ability to receive feedback on the performance of the business being run.
Management gets an overview of each operation carried out.
Many decisions are transferred from top management to a more efficient organizational level, taking into account the experience and knowledge factors possessed.
Organizations can maximize the benefits of investment by looking at and identifying whether systems and information are functioning properly or not.
Companies can drive process improvement workflows, resulting in better alignment of business processes with the needs of each customer.
Improve the quality of human resources so that the work unit system can be more systematic and organized.
Management information system is a set of processes where data can be processed, analyzed, and displayed so that the data becomes useful for the needs of making a decision.
The types of reports generated by SIM are divided into three, namely real-time, ad-hoc, and scheduled.
Examples of SIM itself are divided into 10 which have different tasks and roles.
The most important benefit of a SIM is to improve the performance of the business you are engaged in and run.