MIS (Management Information System) and How it Works?

What is MIS?
MIS is the use of information technology, people, and business processes to record, store and process data to produce information that decision makers can use to make day to day decisions. The full form of MIS is Management Information Systems. The purpose of MIS is to extract data from varied sources and derive insights that drive business growth.

The need for MIS
The following are some of the justifications for having an MIS system:

• Decision makers need information to make effective decisions. Management Information Systems (MIS) make this possible.
• MIS systems facilitate communication within and outside the organization – employees within the organization are able to easily access the required information for the day to day operations.
• Facilitates such as Short Message Service (SMS) & Email make it possible to communicate with customers and suppliers from within the MIS system that an organization is using.
• Record keeping – management information systems record all business transactions of an organization and provide a reference point for the transactions.

Components of MIS
The major components of a typical MIS long-form (Management Information System) are:

• People – people who use the information system.
• Data – the data that the information system records.
• Business Procedures – procedures put in place on how to record, store and analyze data.
• Hardware – these include servers, workstations, networking equipment, printers, etc.
• Software – these are programs used to handle the data. These include programs such as spreadsheet programs, database software, etc.

How MIS Works?
A management information system (MIS) is a computerized database of financial information organized and programmed in such a way that it produces regular reports on operations for every level of management in a company.

• It is usually also possible to obtain special reports from the system easily.
• The main purpose of the MIS is to give managers feedback about their own performance; top management can monitor the company as a whole.
• Information displayed by the MIS typically shows "actual" data over against "planned" results and results from a year before; thus it measures progress against goals.
• The MIS receives data from company units and functions.
• Some of the data are collected automatically from computer-linked check-out counters; others are keyed in at periodic intervals.
• Routine reports are preprogrammed and run at intervals or on demand while others are obtained using built-in query languages; display functions built into the system are used by managers to check on status at desk-side computers connected to the MIS by networks.
• Many sophisticated systems also monitor and display the performance of the company's stock.