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Management Information Systems

Need to understand management information systems and want some practical suggestions to reduce information management costs?

Management information is a sub set of information management andWhat is Management Information System includes information needed to support business management purposes.

It is important to know what is management information system capabilities so as to help define business intelligence reporting requirements.

Think of a typical order

Suppose you order a book on-line. Several pieces of data are required to complete this sales transaction. The company will need to know:
  • The name of the book you want to buy;
  • Who you are and where you live;
  • The shipping address for the book
  • The billing address;
  • Your credit card number and expiry date; and
  • Possibly your on-line account number.
This information now triggers a series of events that ensure that the book is delivered. What is management information system going to do with the data?
  • The shipping department needs the order information so it can find the book and ship it.
  • It also needs to update inventory records to reduce the number of available books by one.
  • This might also trigger the inventory department to order more books as this was the last item in stock.
  • The accounting department has already verified that your credit card is OK so they send a confirmation of the order, or invoice, showing how much you paid; and
  • The shipping department ships the book and sends a tracking number.
There is also a lot of other operational information gathered during this process that is used to evaluate order shipments and help streamline the process if needed. It is important to know what is management information system capabilities so as to help define business intelligence reporting requirements.

What is management information system?

Every company has a core set of information needed to manage common transactions, which will include:
  • People information management and organization data. Every company maintains information about the persons employed by the company, people who do business with the company, organization units within the company and supplier and vendor information;
  • Product information management. Every company is involved with products. They may sell services, which are considered products, or manufacture and sell products, and buy products and raw materials needed to operate the business. Product information is closely linked with people and organization information;
  • Order management information. All companies are involved with orders of one form or another—Customers may place orders with the company and the company may also place orders with suppliers. All orders will involve billing and invoice management information. This information is also required to support sales management;
  • Shipment management. Many companies are involved with product shipments. They may “ship” a product via courier, or via Internet download, or they may have a fleet of delivery vehicles. All of these components require shipment information to effectively manage operations;
  • Billing information management. Companies need to send invoices to charge for products shipped. These invoices need to be tracked to ensure that bills are sent for all products ordered and shipped and to update accounts receivables with amounts due;
  • Work order management and time reporting. Most companies capture data needed to evaluate what it costs to build products or deliver services. This data might be required for internal use, to improve efficiency, or project time and material reporting might be required to support client billing;
  • Accounting information management. How long would a company stay in business if it did not pay attention to financial and accounting information, which is needed to support internal operations and regulatory reporting?
  • Human resource management information. Every company has employees and needs information to track positions filled, job offers, employee qualifications, and training and pay and benefits.
Enterprise information management includes management of:
Industry specific management information.

Specific industries have information requirements in addition to the common data e.g.
  • Financial institution management involves financial management, like all companies, but also requires industry specific financial management information to track customer loans, assets and liabilities;
  • Government agencies require vital records to track birth rates, marriages, divorces and deaths;
  • The pharmaceutical industry needs access to prescription drug prescriber information to help sales and marketing teams focus on specific target areas or to help with new product research;
  • Agribusiness needs specialized agricultural information for successful operations management and for regulatory reporting in the event of health related issues such as “mad cow” disease;
  • Transportation management industry needs information concerning shipments by road, rail air and sea;
  • Aerospace engineering requires technical information to certify new aircraft airworthiness and to ensure that ongoing maintenance complies with prescribed regulations; and
  • Airport operations require management information to ensure that facilities are maintained to prescribed standards to ensure public safety.
Summary

Management information systems are are key component of information management and process information and data needed for management purposes.

Most companies have some common information requirements and others have industry specific requirements.


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