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 analyse
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.

Types of Information Systems

The type of information system that a user uses depends on their level in an organization.
The following diagram shows the three major levels of users in an organization and the type
of information system that they use.
Transaction Processing Systems (TPS)

This type of information system is used to record the day to day transactions of a business.
An example of a Transaction Processing System is a Point of Sale (POS) system. A POS
system is used to record the daily sales.

Management Information Systems (MIS)

Management Information Systems abbreviated as MIS, are used to guide tactic managers to
make semi-structured decisions. The output from the transaction processing system is used
as input to the MIS system.

Decision Support Systems (DSS)

Decision support systems are used by top level managers to make semi-structured
decisions. The output from the Management Information System is used as input to the
decision support system’s systems also get data input from external sources such as current
market forces, competition, etc.

Manual Information Systems VS Computerized Information Systems (MIS)

Data is the bloodstream of any business entity. Everyone in an organization needs

information to make decisions. An information system is an organized way of recording,
storing data, and retrieving information.

In this section, we will look at manual information systems vs. computerized information
systems.
Manual Information System

A manual information system does not use any computerized devices. The recording, storing
and retrieving of data is done manually by the people, who are responsible for the
information system.

The following are the major components of a manual information system

• People –people are the recipients of information system

• Business Procedures –these are measures put in place that define the rules for
processing data, storing it, analysing it and producing information

• Data –these are the recorded day to day transactions

• Filing system – this is an organized way of storing information

• Reports –the reports are generated after manually analyzing the data from the filing
system and compiling it.

The following diagram illustrates how a typical manual information system works

Advantages and Dis-advantages of a manual information system

Advantages:

The following are the advantages of manual information systems

• Cost effective – it is cheaper compared to a computerized system because there is

no need to purchase expensive equipment such as servers, workstations, printers, etc.

• Flexible –evolving business requirements can easily be implemented into the

business procedures and implemented immediately

Disadvantages:

The following are some of the disadvantages of a manual information system.

• Time consuming –all data entries need to be verified before filing, this is a time
consuming task when done by humans. Retrieving data from the filing system also takes a
considerable amount of time

• Prone to error – the accuracy of the data when verified and validated by human
beings is more prone to errors compared to verification and validation done by computerized
systems.

• Lack of security – the security of manual systems is implemented by restricting

access to the file room. Experience shows unauthorized people can easily gain access to
the filing room

• Duplication of data –most departments in an organization need to have access to the

same data. In a manual system, it is common to duplicate this data to make it easy to
accessible to all authorized users. The challenge comes in when the same data needs to be
updated

• Data inconsistency – due to the duplication of data, it is very common to update data
in one file and not update the other files. This leads to data inconsistency

• Lack of backups – if the file get lost or mishandled, the chances of recovering the
data are almost zero.

Computerized information system

Computerized systems were developed to address the challenges of manual information

systems. The major difference between a manual and computerized information system is a
computerized system uses a combination of software and hardware to record, store, analyze
and retrieve information.

Advantages and Disadvantages of a computerized information system (MIS)

The following are some of the disadvantages of a computerized information system.

Advantages:

The following are the advantages of computerized information systems

• Fast data processing and information retrieval – this is one of the biggest advantages
of a computerized information system. It processes data and retrieves information at a faster
rate. This leads to improved client/customer service

• Improved data accuracy – easy to implement data validation and verification checks
in a computerized system compared to a manual system.

• Improved security – in addition to restricting access to the database server, the

computerized information system can implement other security controls such as user’s
authentication, biometric authentication systems, access rights control, etc.

• Reduced data duplication – database systems are designed in such a way that
minimized duplication of data. This means updating data in one department automatically
makes it available to the other departments

• Improved backup systems – with modern day technology, backups can be stored in
the cloud which makes it easy to recover the data if something happened to the hardware
and software used to store the data

• Easy access to information – most business executives need to travel and still be
able to make a decision based on the information. The web and Mobile technologies make
accessing data from anywhere possible.

Disadvantages:

• It is expensive to set up and configure – the organization has to buy hardware and
the required software to run the information system. In addition to that, business procedures
will need to be revised, and the staff will need to be trained on how to use the computerized
information system.
• Heavy reliance on technology – if something happens to the hardware or software
that makes it stop functioning, then the information cannot be accessed until the required
hardware or software has been replaced.

• Risk of fraud – if proper controls and checks are not in place, an intruder can post
unauthorized transactions such as an invoice for goods that were never delivered, etc.

Advantages and Dis-advantages of a manual information system

Advantages:

The following are the advantages of manual information systems

 Cost effective – it is cheaper compared to a computerized system because there is

no need to purchase expensive equipment such as servers, workstations, printers,
etc.
 Flexible –evolving business requirements can easily be implemented into the
business procedures and implemented immediately

Disadvantages:

The following are some of the disadvantages of a manual information system.

  Time consuming –all data entries need to be verified before filing, this is a time
consuming task when done by humans. Retrieving data from the filing system also
takes a considerable amount of time
 Prone to error – the accuracy of the data when verified and validated by human
beings is more prone to errors compared to verification and validation done by
computerized systems.
 Lack of security – the security of manual systems is implemented by restricting
access to the file room. Experience shows unauthorized people can easily gain
access to the filing room
 Duplication of data –most departments in an organization need to have access to
the same data. In a manual system, it is common to duplicate this data to make it
easy to accessible to all authorized users. The challenge comes in when the same
data needs to be updated
 Data inconsistency – due to the duplication of data, it is very common to update
data in one file and not update the other files. This leads to data inconsistency
 Lack of backups – if the file get lost or mishandled, the chances of recovering the
data are almost zero.

Computerized information system

Computerized systems were developed to address the challenges of manual information

systems. The major difference between a manual and computerized information system is a
computerized system uses a combination of software and hardware to record, store, analyze
and retrieve information.

Advantages and Disadvantages of a computerized information system (MIS)

The following are some of the disadvantages of a computerized information system.

Advantages:

The following are the advantages of computerized information systems

 Fast data processing and information retrieval – this is one of the biggest
advantages of a computerized information system. It processes data and retrieves
information at a faster rate. This leads to improved client/customer service
 Improved data accuracy – easy to implement data validation and verification
checks in a computerized system compared to a manual system.
 Improved security – in addition to restricting access to the database server, the
computerized information system can implement other security controls such as
user’s authentication, biometric authentication systems, access rights control, etc.
 Reduced data duplication – database systems are designed in such a way that
minimized duplication of data. This means updating data in one department
automatically makes it available to the other departments
 Improved backup systems – with modern day technology, backups can be stored
in the cloud which makes it easy to recover the data if something happened to the
hardware and software used to store the data
 Easy access to information – most business executives need to travel and still be
able to make a decision based on the information. The web and Mobile technologies
make accessing data from anywhere possible.
Disadvantages:

 It is expensive to set up and configure – the organization has to buy hardware and
the required software to run the information system. In addition to that, business
procedures will need to be revised, and the staff will need to be trained on how to use
the computerized information system.
 Heavy reliance on technology – if something happens to the hardware or software
that makes it stop functioning, then the information cannot be accessed until the
required hardware or software has been replaced.
 Risk of fraud – if proper controls and checks are not in place, an intruder can post
unauthorized transactions such as an invoice for goods that were never delivered,
etc.