An example of this process in the banking industry would be that its inputs would include financial expenditure and hours of staff time worked. Its processes could include the number of customers served, or number and size of loans and other services provided. The outputs could be number of new accounts created, and average income per employee. There are several information systems that a business can use to help its management of information, as it is unlikely that a business will use one system for several functions and levels.
Decision Support Systems (DSS) A DSS helps to gather external, future orientated data and collate it with internal sourced data to help make decisions in semi structured and unstructured situations. A DSS need not be solely organisational wide; each function can have its own DSS. For example the marketing DSS can be used for such things as making various and vital forecasts, planning more effective advertising and evaluating market plans against other things. DSS are good in that they allow managers to analyse and condense a large amount of data into manageable amounts so that decisions can be made.
Executive Support System (ESS) This collects data from both internal and external sources and is more user friendly. ESS is said to have taken over where other systems fall short in that it is more flexible and more interactive. ESS assist top management by providing information on critical areas of the organisations activities drawn from both internal and external databases. An example of an industry that uses this would be the banking industry. Barclays is an organisation that found this system particularly useful, as they were able to use it to deal with information relating to product sales and market share.
Transaction Processing Systems (TPS) These deal with information concerning routine, operational level activities. These support most business functions and are used by most organisations including banking. The information systems discussed are only a few of many types, and no matter what type of information system is used the function will usually be the same to facilitate the running of the organisation by acquiring and communicating useful information. So as you can see using management information systems as a management function is vital to a business however there are problems that can occur from MIS.
There is evidence to show that some existing MIS, often using advanced computer equipment, have had relatively little success in providing management with the information it needs. Some of the reasons for this include:
Lack of management involvement with the design of the MIS
Lack of management knowledge of computers
Not enough support from top management
Often there can be a lack of understanding of technical terms and accounting statistics
To be successful a MIS must be designed and operated with the organisation in mind this includes technical factors and goals and objectives. Management should be informed enough to make an effective contribution to the design of the system, and information specialists should become more aware of managerial functions so that together the MIS can be more successful. To avoid problems there should be effective communication between these two groups. What is required is an awareness and understanding of key principles and functions so that the design is correct. MIS as a business management function are very effective, when designed correctly with the organisation in mind.
Computers are becoming more widely used and are now more likely to be used for the organisations MIS. In order for the MIS to be successful it is vital that all level of management are computer literate. This may mean that the company will have to train employees. Among the many benefits of computer based training the major benefit to an employer is the reduced cost. As they do not have to send people away on courses. An investment in a suitable training scheme often pays for itself, and staff can train when they like. Employees can get immediate feedback on progress and the only real disadvantage is the impersonal touch of being taught by a computer. However if all staff are train correctly then they should be able to manage information effectively.
Businesses should make all employees aware of the MIS in place at all levels. They are likely to be providing a lot of the inputs and outputs of the business and so management and other levels should all be knowledgeable of the organisations goals and the information needed to monitor these. Meetings and reviews are likely to be the best way of flowing information through an organisation. Barclays bank has regular team meetings in which the goals and objectives are assessed and new targets are set. Barclays believe that by doing this they are able to ensure that all employees are aware of the information produced by the MIS and how to use it.
Training is vital in an organisation to keep all levels of staff up to date with goals and performance of the business. There is the added benefit of motivating staff by doing so as they feel valued as an employee as they feel they have a valued input into the running of the business and so are interested in the success of the company.
Different Systems Applications that Store, Retrieve and Analyse Data
Businesses will use many different systems to store their data. There are some systems that will not require IT, however computers are an important way of producing information and so often the majority of systems an organisation will use will be through the use of IT. Office Automation Systems support the larger activities that are carried out in an office. Examples of these would be word processing, desktop databases, E-mail. These systems are used regularly in organisations and are likely to be their main source of data.
Spreadsheets much of the output of an organisations MIS is in the form of numerical data, for example sales forecasts, accounting statements and statistics. This method is usually very effective assuming that managers know what the data produced means and how to analyse it correctly. This may involve training, as if there is a lack of knowledge in this area then the value of the data produced by these systems will be greatly reduced, as it will not be used appropriately. The banking industry has many spreadsheet applications for the storage, retrieval and analysing of data. These include data such as customer accounts, accounting summary i.e. profit, accounts created, loans and debt spreadsheets and many more.
Graphs, Charts and Diagrams these desktop applications are fairly simple to use and can be very effective as a means of storing and analysing data. They are very useful in highlighting trends, summarising information and showing comparisons. They are based on numeric data and are usually a supplement to more detailed reports. They are used often in the banking industry and Barclays Bank use them to highlight simple calculations, analysing relationships between variables such as their advertising and their sales (new accounts). Also they use them for comparing changes over time which they often use to monitor interest rates, and they it is also important to them in highlighting subtle changes such as a rise or fall in new accounts, and cost fluctuations. This means that often they can quickly spot problems that arise and can prevent them from becoming damaging.
Document Image Processing This is a form of electronic filing. A document can be passed through a scanner, translated into digital form and stored. Barclays Bank use an optical disk to store their files, they find this system very valuable because of the amount of customer letters that they receive and send out. It is important that they keep all of these letters and so this system is used to do so. An optical disk can store up to 60,000 pages of A4. This also provides greater security, which is important in this industry.