MIS is a system providing management with accurate and timely information. Such information is necessary to facilitate the decision-making process and enable the organizations planning, control, and operational functions to be carried out effectively. MISs increase competitiveness of the firm by reducing cost and improving processing speed. The power of technology has transformed the role of information in a business firm. Now information has become recognized as the lifeblood of an organization and without information, the modern company is dead.
MIS and its organizational subsystems contribute to the decision making process in many ways. Power has stated that making decisions is an important part of working in the business environment. Companies often make decisions regarding operational improvements or selecting new business opportunities for maximizing the company's profit. Companies develop a decision-making process based on individuals responsible for making decisions and the scope of the company's business operations. A useful tool for making business decisions is a management information system. Historically, MIS was a manual process used to gather information and funnel it to individuals responsible for making decisions.
Figure 1 shows this understanding about information as data processed for a definite purpose.
MIS is an organization – wide effort to provide decision making process information. The system is a formal commitment by executive to make the computer available to all managers. MIS sets the stage for accomplishments in the other area, which is DSS, the virtual office and knowledge based systems. The main idea behind MIS is to keep a continuous supply of information flowing to the management. Afterwards, by data and information gathered from MIS, decisions are made.
MIS is useful in the area of decision making as it can monitor by itself disturbances in a system, determine a course of action and take action to get the system in control. It is also relevant in nonprogrammer decisions as it provides support by supplying information for the search, the analysis, the evaluation and the choice and implementation process of decision making. Adebayo (2007) stressed the need for MIS in decision making as it provides information that is needed for better decision making on the issues affecting the organization regarding human and material resources.
MIS may be viewed as a mean for transformation of data, which are used as information in decision-making processes.
MIS differs from regular information systems. The primary objectives of these systems are to analyze other systems dealing with the operational activities in the organization. MIS is a subset of the overall planning and control activities covering the application of humans, technologies, and procedures of the organization. Within the field of scientific management, MIS is most of ten tailored to the automation or support of human decision making.
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