Management information system consists of three words.

Management: We can manage data

Information: Get information from raw data

System: Computer/hardware system used to process all data

So it is clear now that a large amount of data is collected by some company and then convert to precise information that summarizes future planning of the company.

Advantages disadvantages of MIS
Advantages disadvantages of MIS

Let us take an example of car manufacturing company. The company has staff that collects data. That data is then used by managers and company owners to make future plans. Company owners make a decision on what type of cars they have to make and how much quantity of cars they can make in next 6 months or next 5 years.

In MIS database plays an important role in storing a large amount of data. All data is stored in files, databases. This type of data may be used for:-

  • Making next salary of employees
  • Hiring staff
  • Removing unwanted staff

Advantages of MIS:

By using management information system, managers can have an overall brief look at the company. They can use these statistics to compete in the market. Company owners can make actions in quick time. Also, they can make better communication within the company. So the company can now better manage different departments, and coordination within company becomes better.

Quality of products also becomes good because all the past experiences and customers responses are noted. The decisions in the company are made in a timely manner.

The information delivered to managers are well-structured and they can improve company performance. As information is stored in digital form so this type of information is always available in a timely manner. Creation of jobs in the company is better handled in MIS.

Disadvantages of MIS:

Management information system is expensive to set up and maintain. Managers and company owners have to learn skills to use MIS. As with passage of time, new tools are introduced so updating with latest trends is also required. Up-gradation of the system is also another problem in MIS and it involves extra fees and staff.

As MIS is online connected so hacking is also done by 3rd party people. In some cases, some sensitive data is stolen like credit card details of customers.

If the type of data gathered by the company is not beneficial then the result of information is useless and wastage of time and resources.

MIS works on quantitative data and not quality data that is another drawback of this system. Effectiveness is also a problem in this system which means top management team can be fired at any time and the new team can change company policy that effects overall company decisions and employees interactions.

Examples of MIS:

Any large company using tools to manage customer data, outcome information and make a decision on that data. Like car manufacturing company, supermarket, Brokerage Company etc.

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