Importance of MIS in Business Organization

What is the Importance of MIS in Business Organization?

MIS in Business Organization – Every business has an accountant who prepares monthly profit and loss statements and a balance sheet. That’s a good start. But, it’s not enough for a business owner to adequately manage a company. The importance of MIS in a business organization is that every business owner needs a system.

Think about the gauges in the dashboard of your car. The importance of MIS in a business organization is similar, to a series of gauges sitting on your desk. They report the crucial financial metrics about the performance of the business. They let you see in an instant if the business is operating as expected. The MIS definition includes those gauges.

Why Is the MIS Important?

At the beginning of the year, you have some idea of where you want the business to go. You set up goals for sales, establish product profit margins, and figure out.

how much credit the company will need from the banks, create performance standards, and so on.

Now, the job is to guide the business down the road toward achieving those objectives.

An MIS system provides the reports that allow you to keep the business on the road. If sales are not meeting monthly projections, you have a meeting with the sales manager. If a few accounts receivable go 90 days past due, you get the finance director on the phone. A report shows that raw materials in a product have gone up.

so you go to the production floor to talk with the area supervisor.

The purpose of the MIS system is to set performance

Application of the MIS System

standards and alert the business owner to deviations from those objectives in time to take corrective actions.

An effective management information system identifies and collects data on all the important metrics of the operations of a company.

For example, the MIS provides data on sales, customer profitability, and the degree of market penetration.

Supervisors and employees receive reports about productivity, the number of sick days taken, and payroll budgets. This data evaluates employee performance and finds who is due for a raise.

The information is given to manufacturing supervisors with product cost analysis, scheduling plans, and raw materials inventory levels. The MIS system helps planners coordinate sales with production schedules.

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A management information system helps a company become more competitive. It reports and identifies what is working and what is not. These reports give owners the information they need to make decisions and improve the performance of their employees and the business.

It will be an important moment for the owner.

when the IT people install the hardware and software for the MIS, meaning that he now has better control of the business.

Role of MIS in Business Organisation

  • The role of the MIS in an organization is like the role of the heart in the body. The information is the blood and MIS is the heart. Moreover, in the body, the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It also regulates and controls the incoming impure blood, processes it, and sends it to the destination in the quantity needed. It fulfills the needs of blood supply to the human body in the normal course and also in crisis.
  • The MIS plays exactly the same role in the organization. However, collection of the appropriate data from various sources processed it and sent it further to all the needy destinations. Additionally, the system fulfills the information needs of an individual, a group of individuals, and management functionaries: the managers and top management.

How MIS Helps in Business Organisation

  • The MIS satisfies diverse needs through a variety of systems such as query system, analysis system, modeling system, and decision support system.
  • The MIS helps in strategic planning, management control, operational control, and transaction processing. Moreover, the MIS helps the clerical personnel in the transaction processing and answers the queries on the data pertaining to the transaction, the status of a particular record, and also references on a variety of documents.
  • The MIS Executive helps the junior management personnel by providing the operational data for planning, scheduling, and control, and helps them further in decision-making at the operation level to correct an out-of-control situation.

Others

  • The MIS helps the middle management in short-term planning, target setting, and controlling the business functions. It is supported by the use of the management tools of planning and control.
  • The MIS helps the top-level management in goal setting, strategic planning, and evolving the business plans and their implementation.
  • The MIS plays the role of information generation, communication, and problem identification and helps in the process of decision-making. The MIS, therefore, plays a vital role in the management, administration, and operation of an organization.

Importance of MIS in Business Organization

  • The importance of MIS in Business Organizations is that it creates an impact on the organization’s functions, performance, and productivity.
  • The impact of MIS on the functions is in its management a good MIS supports the management of marketing, finance, production, and personnel to become more efficient. Moreover, the tracking and monitoring of the functional targets becomes easy.
  • The functional managers are informed about the progress, achievements, and shortfalls in the activity and the targets.
  • The manager is kept alert by providing certain information indicating probable trends in the various aspects of the business. This also helps in forecasting and long-term perspective planning. The manager’s attention is brought to a situation that is expected in nature, inducing him to take action or a decision in the matter. Moreover, a disciplined information reporting system creates a structured database and a knowledge base for all the people in the organization.
  • The information is available in such a form that it can be used straight away by blending and analysis, saving the manager’s valuable time.

Impact of MIS

  • The MIS creates another impact in the organization which relates to the understanding of the business itself.
  • The MIS begins with the definition of data, entity, and its attributes. It uses a dictionary of data, entities, and attributes, respectively, designed for information generation in the organization. Since all the information systems use the dictionary, there is a common understanding of terms and terminology in the organization bringing clarity in the communication and a similar understanding of an event in the organization.
  • The MIS calls for a systematization of the business operations for an effective system design. This leads to streaming of the operations which complicates the system design. It improves the administration of the business by bringing discipline in its operations as everybody is required to follow and use systems and procedures. This process brings a high degree of professionalism in the business operations.

Goal of MIS

  • The goals and objectives of the MIS are the products of business goals and objectives. It helps indirectly to pull the entire organization in one direction towards the corporate goals and objectives by providing relevant information to the organization. A well-designed system with a focus on the manager makes an impact on managerial efficiency.
    • The fund of information motivates an enlightened manager to use a variety of tools for management. It helps him to resort to such exercises as experimentation and modeling.
    • The use of computers enables him to use tools and techniques which are impossible to use manually.
    • The ready-made packages make this task simple. The impact is on the managerial ability to perform. It improves decision-making ability considerably.

MIS in Business Organization

Since the MIS works on the basic systems such as transaction processing and database, the drudgery of the clerical work is transferred to the computerized system, relieving the human mind for better work. The importance of MIS in business organizations is that a lot of manpower is engaged in this activity in the organization. Seventy (70) percent of the time is spent in recording, searching, processing, and communicating. This MIS has a direct impact on this overhead. It creates an information-based working culture in the organization.

It goes without saying that all managerial functions are performed through decision-making; for making rational decisions, timely and reliable information is essential and is procured in a logical and well-structured. method of information collecting, processing, and disseminating to decision-makers. Such a method in the field of management is widely known as MIS. In today’s world of ever-increasing complexities of business as well as business organization, in order to service and grow. One must have a properly planned, analyzed, designed, and maintained.MIS so that it provides timely, reliable, and useful information to enable the management to take speedy and rational decisions.

MIS in Business Organization

MIS assumes all the more important roles in today’s environment because a manager has to make decisions under two main challenges. First, because of the liberalization and globalization, in which organizations requires to compete not locally but globally, a manager has to make quick decisions, otherwise his business will be taken away by his competitors. This has further enhanced the necessity for such a system. Secondly, in this information age wherein information is doubling up every two or three years, a manager has to process a large voluminous data; failing which he may end up making a strong decision that may prove to be very costly to the company.

In such a situation managers must be equipped with some tools or a system, which can assist them in their challenging role of decision-making. It is because of the above-cited reasons, that today MIS is of permanent importance, sometimes regarded as the name center of an organization. Such a system assists decision-makers in organizations by providing information at various stages of decision-making. Thus greatly helps the organizations achieve their predetermined goals and objectives.

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On the other hand, an MIS that is not adequately planned for analysis, design, and implementation or is poorly maintained may provide inaccurate, irrelevant, or obsolete information.

which may prove fatal for the organization. In other words, organizations today just cannot survive and grow without properly planning, designing, implementing, and maintaining MIS. It has been well understood that MIS enables even small organizations to more than offset the economies of scale enjoyed by their bigger competitors and thus helps in providing a competitive edge over other organizations.

From the above, we have learned the importance of MIS in business organizations. If you want to become a successful MIS join our MIS training course.