MIS and The Three Fundamental Roles of Information Systems in Business

, or MIS, broadly refers to a computer-based system that provides managers with the tools to organize, evaluate and efficiently manage departments within an organization.Management information system

Definition: A Management Information System is a set of combined procedures that gathers and produces reliable, relevant, and properly organized data that supports the decision making process of an organization. To sum up, it is a group of processes through which data is obtained, sorted, and displayed in a useful way for decision-making purposes.

The organization and coordination of the activities of a business in order to achieve defined objectives. ... Management consists of the interlocking functions of creating corporate policy and organizing, planning, controlling, and directing an organization's resources in order to achieve the objectives

process form of data is called information.

A system is a collection of elements or components that are organized for a common purpose.

MIS :
 Right information
To the right person
At the right place
At the right time
In the right form
At the right cost

What Does Management Information Systems Mean?

What is the definition of MIS? Management Information Systems are very useful tools for the purpose of reviewing and controlling company’s operations. The main goal of these systems is to organize all data collected from every level of the company, summarize it, and present it in a way that facilitates and improve the quality of the decisions being made to increase the company’s profitability and productivity.

These systems are typically are computer-based including either simple excel sheets or more complex platforms. The information being collected and gathered for the system normally comes from both inside and outside sources.

An information system is described as having five components.

• Computer hardware. This is the physical technology that works with information. ...
• Computer software. The hardware needs to know what to do, and that is the role of software. ...
• Telecommunications. ...
• Databases and data warehouses. ...
• Human resources and procedures.

The computer age introduced a new element to businesses, universities, and a multitude of other organizations: a set of components called the information system, which deals with collecting and organizing data and information. An information system is described as having five components.

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• Computer hardware

  This is the physical technology that works with information. Hardware can be as small as a smartphone that fits in a pocket or as large as a supercomputer that fills a building. Hardware also includes the peripheral devices that work with computers, such as keyboards, external disk drives, and routers. With the rise of the Internet of things, in which anything from home appliances to cars to clothes will be able to receive and transmit data, sensors that interact with computers are permeating the human environment.

• Computer software

  The hardware needs to know what to do, and that is the role of software. Software can be divided into two types: system software and application software. The primary piece of system software is the operating system, such as Windows or iOS, which manages the hardware’s operation. Application software is designed for specific tasks, such as handling a spreadsheet, creating a document, or designing a Web page.

• Telecommunications

  This component connects the hardware together to form a network. Connections can be through wires, such as Ethernet cables or fibre optics, or wireless, such as through Wi-Fi. A network can be designed to tie together computers in a specific area, such as an office or a school, through a local area network (LAN). If computers are more dispersed, the network is called a wide area network (WAN). The Internet itself can be considered a network of networks.
• • Databases and data warehouses

    This component is where the “material” that the other components work with resides. A database is a place where data is collected and from which it can be retrieved by querying it using one or more specific criteria. A data warehouse contains all of the data in whatever form that an organization needs. Databases and data warehouses have assumed even greater importance in information systems with the emergence of “big data,” a term for the truly massive amounts of data that can be collected and analyzed.

  • Human resources and procedures

    The final, and possibly most important, component of information systems is the human element: the people that are needed to run the system and the procedures they follow so that the knowledge in the huge databases and data warehouses can be turned into learning that can interpret what has happened in the past and guide future action.

Information Systems role in Business

The environment in which organizations operate has changed dramatically over the last few years. Increased competition, globalization, the influence of the Internet and international events affect the performance and survival of organizations on a world-wide scale. The Internet has changed the way organizations do business, from the acquisition and servicing of customers to the management of their relations with suppliers. This is not only revolutionizing the way people access information, communicate, shop and entertain themselves, but also the way organizations compete and operate. With the extensive use and familiarity of the Internet, a trend has developed where organizations are moving their information systems to Web-centered information systems. A Web-centered information system interrelates all the different information systems in an organization using Web-based technologies and interfaces. Organizations also use the Internet to electronically provide innovative products and services. Users in organizations are demanding that the information systems used by the organization should become more efficient and effective. Therefore, organizations are forced to invest heavily in the deployment of information systems to obtain value and benefit, and to stay competitive in this new environment.

As the cloud continues to gain momentum, companies worldwide are increasing their spending towards the IT sector. Traditional IT systems are declining as modern digital technologies like AI and virtual reality are proving to be strong business driving forces. Indeed, the IT sector is being dominated by emerging cloud infrastructure, AI, VR, blockchain, and other modern technologies.

world’s leading IT research and advisory company, Gartner, found that worldwide IT spending is projected to touch $3.5 trillion in 2017, a 2.7 percent increase from 2016.

94 million people read at least some of their news online. 60 million bank online, and 55 million now read blogs.

Google, reported that it topped $100 billion in annual sales for the first time in Google's 20-year history. It posted $32.3 billion in sales for the fourth quarter, pushing its total annual revenue to $110 billion. That's up from about $90 billion in 2016.Feb 1, 2018

The Three Fundamental Roles of Information Systems in Business

Operations

A business information system carries out specific functions in support of operations, including payroll, employee record storage, preparing and storing company documents and credit card processing. If your company operates a manufacturing line, the information system can schedule tasks and processes while keeping quality records. Some companies, such as graphic designers or advertising companies, use the information system to produce their products and services. In supporting operations, the information system can increase efficiency and improve employee productivity.

Controls

Monitoring and controlling the activities of employees is a core function of information systems. This is especially true of financial transactions in which management has a duty to prevent fraud and theft. In this role, the security of the information system is critical, as managers rely on it to track payments received from customers and invoices from suppliers. The system imposes its control functions by allowing only authorized employees to log in and access the relevant functions. For example, only a few employees may be authorized to generate a company check. In addition to limiting who can perform such functions, the system keeps track of who logged in and carried out the task.

Decisions

A third fundamental role for information systems is management support in making decisions. Managers can get all the information they need about company activities from the system. Complete, accurate information means management decisions are more effective. More sophisticated systems can go beyond supplying data to running scenarios:

Strategic Business Objectives of Information System

think local and act globally.

Although many managers are familiar with the reasons why managing their typical resources such as equipment and people are important, it is worthwhile to take a moment to examine the growing interdependence between a firm’s ability to use information technology and its ability to implement corporate strategies and achieve corporate goals. Specifically, business firms invest heavily in information to achieve six strategic business objectives:

1. Operational excellence

2. New products, services, and business models

3. Customer and supplier intimacy

4. Improved decision making

5. Competitive advantage

6. Survival

1. Operational Excellence

Businesses continuously seek to improve the efficiency of their operations in order to achieve higher profitability. Information systems and technologies are some of the most important tools available to managers for achieving higher levels of efficiency and productivity in business operations, especially when coupled with changes in business practices and management behavior.

EX: 

PIZZA 20 min.

Wal-Mart

2. New Products, Services, and Business Models

Information systems and technologies are a major enabling tool for firms to create new products and services, as well as entirely new business models. 

A business model describes how a company produces, delivers, and sells a product or service to create wealth. As successful as Apple Inc, NetFlix, and Wal-Mart were in their traditional brick-and-mortar existence, they have all introduced new products, services, and business models that have made them both competitive and profitable.

EX: 

Apple INC. (Especially iPad)

NetFlix

Wal-Mart

3. Customer and Supplier Intimacy

When a business really knows its customers, and serves them well, the way they want to be served, the customers generally respond by returning and purchasing more. This raises revenues and profits. Likewise with suppliers: 

the more a business engages its suppliers, the better the suppliers can provide vital inputs. Wal-Mart is an excellent example of how the use of information systems and technologies are extensively used to better serve their suppliers and retail customers. 

The RealLink system that they use digitally links their suppliers to every one of Wal-Mart’s 5,289 stores worldwide. Suppliers are able to ensure the continuous flow of products to the stores in order to satisfy customer demands.

EX: 

Wal-Mart (RealLink System)

Hotel Ritz-Carlton (CLASS System)

CLASS: Customer Loyalty Anticipation Satisfaction System

4. Improved Decision Making

Information systems and technologies have made it possible for managers to use real-time data from the marketplace when making decisions. 

Previously, managers did not have access to accurate and current data and as such relied on forecasts, best guesses, and luck. The inability to make informed decision resulted in raising costs and lost customers.

EX: 

DSS (Decision Support System)

For: Structured, Unstructured or/and Semi-Structured Problems

5. Competitive Advantage

Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales and higher profits that your competitors cannot match. 

Dell Computers and Wal-Mart are prime examples of how these companies used information systems and technologies to separate themselves from their competition. Dell remains the most efficient producer of PCs in the world. Wal-Mart is the most efficient retail store in the industry.

EX: 

Wal-Mart (Created Largest Retail Chain)

UPS (Created Largest Network)

6. Survival

Firms also invest in information systems and technologies because they are necessities of doing business. Information system is not a luxury. In most businesses, information systems and technology is the core to survival. Citibank was the first banking firm to introduce ATMs. 

In doing so, they had a major competitive advantage over their competitors. In order to remain and survive in the retail banking industry, other banks had no choice but to provide ATM services to banking customers.

EX: Citi Bank (First Banking firm Introduce ATMs)