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 and
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?
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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