Management information system uses information technology for collecting and communicating information a company uses to operate. Every function of the business produces its own data be it financial or operational and as a result, requires a separate information system of its own to keep a track of it all. There are many types of MIS as the functions of a company, but a few specific information systems are used by all firms to operate smoothly.
The different types of Management Information System can be identified through classification. Classification helps to combine similar things, so they can be treated as a single unit. The classification of an information system’s into various types is a technique for designing Management information system and their application.
Types of management system
Types of MIS depends upon how one creates their classification, any number of different types of Information system can be found. Most attempts to classify information system into various types rely on how tasks and responsibilities are divided with in an organization. Since the flow of information runs in a hierarchy, most organization’s tend to follow the hierarchy. Also described as a pyramid Model, for the way systems are arranged mirrors how tasks are found at various levels of the organization.
For example- a three level pyramid model based on types of the decision taken by managers at different levels of the organization.
- Strategic decisions –Executive information system
- Tactical decisions –Management information system
- Operational decisions –Transaction processing system
( This 3 levels of pyramid shows the type of decision taken at different levels )
Most widely used Management Information System Types
There are many types of information systems used to extract data, create reports and help operational and middle level managers in decision making. Uses of management information system differs based on requirement. Selecting the requited type of MIS is thus important. Some of the widely used MIS types are explained here:
- Management Reporting System –it’s a database designed to report on all the finances and operations of all management levels. A management reporting system is generally used by middle level managers to generate regular reports by comparing past and present financial performance to determine financial growth. It’s also a great tool for the middle level managers to analyse their own performance. The upper level managers use data that generated by reporting system to make a comparison in between company’s current financial position and it’s efficiency of operations against company’s predetermined goals.
- Process Control Systems –this monitors physical and industrial processes of a business like petroleum processing, metal fabrication or automobile assembly. The system constantly collects data and programme’s it to generate reports on system performance. A manager by looking at the reports can tell how often, over the course of defined time, an event occurs in the production process. Or how often a company deviates from the repetitive production process. This information helps to track the overall efficiency of production and safety of its employees and machinery.
- Sales and marketing system – It supports Management to execute and track effectiveness of Organizations sales and marketing functions. With the help of these reports, the manager’s are able to find out which products are selling and which aren’t, also how well each product is selling at each retail location. It includes
- Product Development
- Sales forecast
- Track and compile the advertisement outlets and schedule
- Manage distribution channel
- Pricing and promotion
- To implement effective advertisement and sales promotion
- Inventory control system – it tracks everything that has to do with inventory, including theft, spoilage, and inventory in hand, thereby allowing management to determine which items are selling out more and need to be re-stocking, either in individual retail outlets or in the company warehouse. The inventory control system also keeps a record of movement of inventory into the warehouse, from the warehouse to the stores, sales, and returns.
- Accounting and Finance systems – It tracks organizations assets and investment and combines all data related to financial reports as needed by law for functions such as payroll, local taxes, federal, state and pension funds. Accounting and Finance system provides reports necessary for financial audits and annual reports if the institution produces one. It also facilitates daily posting of routine transactions like sales income, returns, and bank deposits. The monthly statement’s such as the balance sheet or the Profit and loss statement are derived from this system. Apart from that these statements help managers track current financial success against past performance and predetermined goals for the future growth of the company.
- Human resources– office automation and enterprise collaboration information system help management in controlling the flow of information all throughout the organization. Any medium or any electronic communication device used by managers in the organization to communicate with other manager’s, or employees or for employees to communicate with one another falls under the office automation information system. These devices may include any medium of transfer such as landline phones to talk to each other or Cell phones, Intranet or Internet, voicemail, multimedia, file sharing and conferencing.
- Decision support system – these are used by middle and higher level management to help make decisions and solve problems of the company.
- Executive information system – it’s a reporting tool for providing easy and quick access to company’s reports from all level’s and departments such as human resources, accounting, and operations, etc.
- Marketing information systems – these are information systems to help with marketing aspects of the business.
- Office automation system – for supporting communication and productivity in an enterprise by eliminating bottlenecks and even automating workflow in all levels of management.
- School Information management system – Used in schools, for helping in school administration, this includes teaching and learning material.
- Enterprise resource planning – facilitating the flow of information in between all functions of business, inside the organization boundary and helps manage connections with stakeholders outside.
Conclusion – So, whatever type of business you do or for whichever purpose you need a MIS, based on that so many MIS are available nowadays. Choose your most suited MIS and make your life easy.