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Types of Management Information Systems

A management information system (MIS) is a computer-based system that provides the information necessary to manage an organization effectively. An MIS should be designed to enhance communication among employees, provide an objective system for recording information and support the organization's strategic goals and direction. There are four types of MIS that will be introduced in ascending order of sophistication.

TRANSACTION PROCESSING SYSTEMS

These systems are designed to handle a large volume of routine, recurring transactions. They were first introduced in the 1960s with the advent of mainframe computers. Transaction processing systems are used widely today. Banks use them to record deposits and payments into accounts. Supermarkets use them to record sales and track inventory. Most managers use these systems to deal with tasks such as payroll, customer billing and payments to suppliers.

OPERATIONS INFORMATION SYSTEMS


These systems were introduced after transaction processing systems. An operations information system gathers comprehensive data, organizes it and summarizes it in a form that is useful for managers. Most of these systems access data from a transaction processing system and organize it into a form usable by managers. Managers use operations information systems to obtain sales, inventory, accounting and other performance-related information.

DECISION SUPPORT SYSTEMS (DSS)


A DSS is an interactive computer system that can be used by managers without help from computer specialists. A DSS provides managers with the necessary information to make intelligent decisions. A DSS has three fundamental components: 1. Database management system (DBMS): Stores large amounts of data relevant to problems the DSS has been designed to tackle. 2. Model-based management system (MBMS): Transforms data from the DBMS into information that is useful in decision making. 3. Dialog generation and management system (DGMS): Provides a user-friendly interface between the system and the managers who do not have extensive computer training.

EXPERT SYSTEMS AND ARTIFICIAL INTELLIGENCE


These systems use human knowledge captured in a computer to solve problems that ordinarily need human expertise. Mimicking human expertise and intelligence requires that the computer (1) recognize, formulate and solve a problem; (2) explain solutions and (3) learn from experience. These systems explain the logic of their advice to the user; hence, in addition to solving problems they can also serve as a teacher. They use flexible thinking processes and can accommodate new knowledge.

CONSIDERATIONS
A potential problem with relying on electronic communication and processing of information is the loss of the vital human element. Sometimes because of the complexity of information, an MIS report cannot effectively summarize it. Very rich information is needed to coordinate and run an enterprise and certain classes of information cannot be quantified. For example, it might be wrong to evaluate an employee's performance solely based on numbers generated by an MIS. Numbers can indicate a performance problem but a face-toface meeting will be necessary to discuss the nature of the problem.

Role of MIS in an organization


Management and organizations facing constantly changing problems, diverse managerial styles, and ever present information needs offer a challenging context for developing computer based information systems. MIS uses computer technology to provide information and decision support to managers, helping them becomes more effective. Developments in the young computer industry are changing corporate management style. Managers at all levels use similar data. Operating managers require data which is timely, precise, detailed, internal and historical. Upper level managers need data which is aggregated, external as well as internal, future oriented as well as historical and covering a longer span time. An effective MIS cannot be built without viable data management tools. Such tools were not generally available previously. Moreover, most organizations did not effectively use DBMS technology until two decades before. An important key to a successful MIS is the effective management of an organization's data resources. Role of the Database in an Organization: An organization is traditionally viewed as a three level pyramid-operational activities at the bottom, management planning and control activities in the middle and strategic planning and policy making in top management. The corporate database contains data relating to the organization, its operations, its plan and its environment. State of Database Management In Organizations: The needs of organizations and management are changeable, diverse and often ill-defined, yet they must be met. Added to these are outside pressures from federal taxing authorities, federal securities agencies and legislators making privacy laws. Both internal and external forces demand that organizations exercise control over their data resources. Data is a vital resource in an organization and must be managed. The organizational database is an essential component in a management information system. Of the four components of a data processing system, attention to data has lagged behind the development of machines and programming technology. Taking a database approach requires an organization to focus on data as a valued resource. Data is separate from programs and application systems which use it.

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