Integrated Information Systems in Management

Introduction

Management is a practice of distributing the input of the business by controlling, directing, organizing, and planning with the aim of offering and generating products and services preferred by consumers to achieve the objectives of the business. Therefore, the Integrated Management Information System (MIS) is considered the analysis of information systems in an organization so that it helps in making decisions, controlling, and planning across all levels of the organization. This process allows the management to receive reports and access data from their database, such as current activities, historic records, and employee’s performance.

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Integrated Management Information System (MIS) is made up of human resources, information technology practices, and a range of processes that are being used in the contemporary business environment. Most businesses are employing main types of MIS applications: marketing MIS to make decisions on prices and analyze product progress; accounting MIS to provide various accounting reports; manufacturing MIS to help in analyzing inventory reports; financial MIS that gives various financial reports and data; and human resources MIS that supports the management in analyzing employees’ performance, recruitment, and training (Nowduri, 2012). This paper discusses the integrated information system in an organization.

Literature Review

The integrated information system provides the top management of the organization with the details that are essential in decision making. In the past, companies used computers for normal or simple practices such as accessing payroll details, sales, billing and accounts with minimal information and composition. Eventually, the use of computers is becoming more multipart, where they have been enhanced to connect various applications located in different places or offices. Computer speed and storage capacities have been enhanced as well (Srinivasu, 2009). As more information or data was kept and linked across different applications, managers looked for better ideas and essential information with the intention of generating important management reports from the information or data kept in these systems. Formerly, an integrated management information system was considered a tool that offers management some details or data regarding inventories, sales, and other details that can support in effectively running the business. Currently, an integrated management information system is widened to consist of project management, supply chain management (SCM), enterprise resource planning (ERP), HRM, and so forth (Ghani, 2012).

Integrated management information systems give a range of details about a particular product to the users. Periodic Scheduled Reports were commonly used in the past to give information to the users through a precise layout intended to give users the information on a daily basis. Exception Reports are generated just if exceptional situations take place, where it decreased information overload rather than overpowering the managers during the decision making with periodic detailed reports of the operations of the organization or company. Demand Reports and Responses are accessible to the managers if they need particular information at a certain time during decision making and will not need the entire periodic detailed reports to be produced. Moreover, Push reporting is the details that are pushed to the network or database of the managers (Nowduri, 2012). Web-casting software is normally used in most companies to transmit selective or particular reports and other essential details or information. This is a better illustration of how the system can be integrated within the company to provide managers and other decision-makers with easy access to information.

The critical objective of an integrated information system is to attain effective access to information by carrying out the core roles for the company. The integrated systems have forced many companies to implement integrated MIS for successfully managing and controlling all activities. For example, in the banking sector, it will be very difficult to perform the checking process without using information systems. Moreover, the retail sector is another field that has profited from development in information systems. The main features of retail such as accounts, sales, and warehousing have been made simpler through an integrated management information system and led to a reduction of operation costs (Gunasekaran, 2004).

Key Role of Integrated MIS

The integration between the operation of the company and the information technology system is considered a challenging task and has intervening features such as the structure, external environment, and culture. The information system unit of the company keeps up the data storage, database maintenance, networks, software, and hardware, where they are operated by the system administrators, project leaders, information system analysts, and programmers. These specialists play a significant function in giving the correct data or information to the respective managers or employees at an appropriate time (Diamond & Khemani, 2006). The key role of the management information system is to process, control, plan, forecast, and offer support to the management levels.

Transmitting data to all departments of the business engages working jointly and sharing data and ideas irrespective of geographical locations. This process is carried out using the common interface that is connected across the systems of different departments. In the manufacturing department, managing information may be challenging since a lot of data are received at different periods of operation. In the production section, order tracking, quality control, and measures are gained access easily and timely by the project supervisors, and responses are provided. Therefore, the production section and manufacturing department may be integrated through their information systems so that they can enable these departments to gain access to different operations, activities, and sections of the company. Additionally, the sales and marketing section of the company can perform some activities such as assessment of competitor’s information, marketing campaigns, updating the prices, and examining the company’s sales with the purpose of monitoring sales. Moreover, transaction processing systems are employed to gather details or information from the financial operations and offer details that support performance measurement. The management information systems are helpful in providing data regarding project costing, yearly reports, the company’s budget, and other main reports (Srinivasu, 2009).

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From the economists’ perspective, information technology has helped most companies in changing information costs and actual capital costs. In addition, information system technology is considered a production factor that can work effectively as an alternative to traditional labor and cost. Businesses have experienced reduced information technology costs that have become an alternative to the costly workforce for companies. Therefore, information technology should lead to an actual reduction in the number of employees and middle managers since IT applications will replace the workforce. Machinery and building can also be affected through the introduction of information technology since machinery and building have been costly for the operations. Therefore, after a while, companies are expected to enhance their investments in information technology due to its reducing cost compared to other capital investments.

Information technology certainly has an impact on information quality and cost, along with the ability to gain access to information at any time. Information technology has made most companies to reduce their sizes regarding building or office space since it decreases transaction costs. The transaction costs are the costs acquired when the company does the transactions in the marketplace. Transaction cost theory states that companies, businesses, and individuals looking for ways to cut down transaction costs. Most companies have been experiencing huge costs on interacting with distant clients or suppliers, accessing product information, assessing contract compliance, and other factors. Formerly, companies have attempted to decrease transaction costs by working with different suppliers, recruiting many workers, vertical integration, and using their own distributors and suppliers (Nowduri, 2012). The use of network and other information technology applications can support companies to reduce transaction costs, also known as market participation costs. This makes it valuable for the companies to use external suppliers and distributors rather than contracting internal suppliers.

Integrated information systems come with some gains that can be effectively used by most companies. Integrated MIS can outline the company’s strengths and weaknesses because of the existence of performance analysis of employees, financial records, and so forth. The detection of these factors can support the business in enhancing its operational processes. Integrated MIS can also provide an entire picture of the business that serves as an element for planning and communication.

The accessibility of customer details and responses can support the business to line up their business processes based on consumer needs and wants. The efficient management of consumer data often supports the business to carry out direct and specific market campaigns and operations. Integrated information systems help the business in enhancing or maintaining a competitive advantage, where they can perform their operations effectively, faster, exclusively, and economically matched up to competitors in the marketplace (Nowduri, 2012).

Core Competencies

For a company to maintain a competitive advantage in the market, it should have a certain operation that they carry out effectively more than its competitors. Companies that implement an integrated management information system into their operations will have a better chance to outshine their competitors. Management information systems offer the elements that are essential to obtain an effective understanding of the marketplace, along with the understanding of the company itself.

Integrated MIS is a division of the entire internal management and control of a company, which involves the use of processes, technologies, records, and individuals by the company’s management accountants to analyze issues and problems. Integrated MIS is separate from the normal information systems since they are employed to examine other information systems used in the operations of the company. The implementation of information technology applications helps most managers and other stakeholders in carrying out operations linked to the information or data processing. Management information systems are mainly valuable in the transfer of information and the creation of reports to be employed as elements for decision making. Although some companies have not adopted integrated MIS applications, they are using computers and other information technology systems. However, MIS has not worked effectively in some specific sections (Srinivasu, 2009).

Strategy Support

Although computers cannot make decisions for the company, they are very vital in storing and analyzing data for strategic decision making. Integrated Management information systems are utilized by managers to change data into valuable information used in making decisions. Integrated information systems offer an important role since they can gather and filter huge capacity of data and information into the reports that will be widely ineffective during the decision-making process (Gunasekaran, 2004).

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Integrated management information systems are also used widely to run simulations. These are theoretical conditions that answer a series of “what if” situations concerning changes in strategy. For example, management information systems can give the expected outcomes regarding the impact on sales that a change in price may have on a particular product or service. Therefore, the Decision Support Systems (DSS) allow detailed information during decision making in the company that they could not have obtained without MIS applications.

The ability to run scenarios is the main element for making decisions. Moreover, different management information systems have these elements integrated. However, some other management information systems give the information needed to run scenarios on other different systems like spreadsheets. The decisions of the company are affected by factors that occur if they settle on a particular approach. What-if scenarios reveal to the company how varied factors change when they implement a decision. The company can reduce the number of employees and increase promotion budgets and analyze what has an effect on income, productivity, and costs. Integrated MIS applications play a significant function in making practical scenarios possible for a project.

All decisions that a company makes lead to alteration in the expected business outcomes and can require adjustments to the company strategy and entire objectives. MIS either can analyze the data or can give some data or information that allows the managers to perform an analysis. The strategic process includes setting up the expected results of the project or business operation. The analysis enables the managers to portray what these results are expected to be in the current scenarios and how these results will change after the implementation of the decision. Therefore, management information systems allow these results to be projected and to enable the managers to be flexible if any changes occur after the implementation of the decision (Ghani, 2012).

Data Processing

An integrated management information system not just enables the collation of a huge volume of raw data, but it also offers an important time saving to the employees and managers. Traditionally, the manual process was mostly used for the company information by recording. Therefore, analyzing the information can be recorded and analyzed faster and easily onto the database. This enables the managers to have a faster and effective decision making that provides rapid responses from the entire company.

Different managers located at different geographical locations can work on the same data and share ideas regarding the data. An employee in a distant place can enter data into the database of the company and can receive approval or comments from the manager. When the company uses the data found in the integrated MIS for their decision making, they reflect information that originates from the operations of the business. MIS gathers the data from different levels of the company and organizes it into a valuable layout. Integrated MIS applications basically have the employees’ data, costs, and sales statistics. If a manager needs to analyze the level of the income the company has generated annually for the past two years with the aim of making a decision, MIS can give accurate reports that provide income details for the last two years. As managers make decisions based on specific objectives and have the records from MIS and trend analysis to facilitate the company’s expectations, managers have to examine the results to ensure that they are built up as planned. MIS provides the decision-makers the essential data to help them find out if decisions have had the intended impact, or if they have to implement the corrective measures to attain their objectives. If some results are not on course, managers can apply integrated MIS to assess the situation and make a decision regarding the corrective action if needed (Srinivasu, 2009).

Management by Objectives

As integrated management information systems are very valuable in the analysis of data and producing systematic reports for strategic planning of the company, these systems are also applied as MBO (Management by Objectives) element. Management by Objective is a management process that the entire company, including employees and top management, concur regarding a range of objectives for employees to try to attain within a specific time. These objectives are generated using the SMART ratio. This means that they must be Specific, Measurable, Agreed, Realistic, and Time-Specific (SMART).

These objectives are very important since they give some key indicators of performance, which help most businesses or companies assess, evaluate, and monitor their employees. The achievement of MBOs relies on the regular assessment of the progress of the project or employee (Nowduri, 2012).

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Challenges and Recommendation

Regardless of some benefits linked to the functions of integrated management information systems in the decision-making process, some challenges are there that are considered to hinder the efficiency of MIS. The nature of these systems makes it hard for some companies to stay in touch with ideas, proposals, strategies, and values. Moreover, most economists consider that MIS is not adaptable to rapid changes in situations, which pose a threat to the decision-making process. The operation of the management information system needs some information technology professions and analysts that are not available in most companies. Small businesses may experience some challenges operating MIS since it may be costly (Diamond & Khemani, 2006).

According to these challenges, some recommendations are provided to help operate effectively integrated management information systems. The company should enhance the assessment of integrated MIS with the aim of preventing the company from facing unnoticed MIS that has a dismal implication. Companies and managers should look for an approach of adjusting information in a format that it is essential for different decision-making processes in varied companies or operations. Managers should make sure that they use experts who can keenly manage both management information systems and decision-making processes.

Conclusion

Integrated management information systems play a significant function in the operations of most companies, where it helps in making effective decisions for the company’s projects. Integrated information systems help in planning, controlling, and analyzing projects in the company and have some elements that can analyze data or provide information that helps in analyzing raw data. An integrated management information system has helped most companies in making useful decisions by giving precise and advanced information and carrying out analytic operations. Companies or businesses should ensure that integrated management information systems they select are in line with the information format or structure found in the company and contains the elements they need. Effective management information systems can compile and arrange the essential data accessible in the operations of the business and generate a report to provide directions for general decision making.

References

Diamond, J., & Khemani, P. (2006). Jack Diamond and Pokar Khemani. OECD Journal on Budgeting, 5(3), 98-132.

Ghani, E. (2012). Development of Integrated Information Management System Service Quality Model in an Accounting Faculty. International Journal of Business and Social Science, 3(7), 245-252.

Gunasekaran, A. (2004). Information systems in supply chain integration and management. European Journal of Operational Research, 159, 269-295.

Nowduri, S. (2012). Management information systems and business decision making: review, analysis, and recommendations. Journal of Management and Marketing Research, 3, 1-8.

Srinivasu, R. (2009). Management Information System to Help Managers for Providing Decision Making In an Organization. International Journal of Reviews in Computing, 3, 1-6.

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