What is a Management Information System?

Simply stated, a Management Information System is a system that supports the process of decision making. It facilitates managers to take informed decisions.

Nowadays the term Management Information Systems sounds a bit old fashioned. Companies rather speak of Business Intelligence systems.

The Gartner coined term, Business Intelligence, is about gathering knowledge about one's business, and would go one step further than simply processing information. A BI-system enables a user to grow a more profound knowlegde of his or her business leading to better decisions. All this based on the system's ability to process loads of data and showing the resulting information in several formats on different levels of aggregation.

What is information?

A nice and simple definition of information is the following one:

Data that are meaningful or useful to the recipient

Source: Management Information Systems, Davis en Olson, 1985

According to this definition:

  1. information can never be meaningless or useless for the person receiving them
  2. a certain group of data can contain more information for one person than the next
  3. the presentation format of data can be decisive for the informative value
  4. time and place of the data's availibility can determine whether something is information or not

Remarks 1 and 2 are about the type of data, while 3 and 4 refer to form and distribution. Different formats of presentation at the right time in the right place can far more easily be obtained in this era of fast internet and fancy graphical tools compared to only ten years ago.

What is management information?

Management information is information tailored to a manager's needs, allowing him or her to steer processes within his or her responsibility areas. Stated differently, management information is information that supports decision-making leading to informed decisions.

A Management Information System can be defined as follows:

An Information System to consolidate and translate data from underlying business registration systems in a sensible way leading to useful management information.

Source: http://www.logistiek.nl/woordenlijst/id446-MIS_management_information_system.html

MIS became BI

15 to 20 years ago a Management Information System (MIS) was considered a type of information system, nowadays a MIS is only one of the distinctive Business Intelligence systems that are out there. At least, according to Laudon and Laudon:

MIS primarily serve the functions of planning, controlling, and decision making at the management level.

Source: Management Information Systems, Laudon & Laudon, ninth edition, 2006

A Business Intelligence system encompasses far more, these writers claim:

Business intelligence provides firms with the capability to amass information, develop knowledge about operations, and change decision-making behavior to achieve profitability and other business goals.

Business Intelligence helps companies surge from recession!

According to below mentioned article a good Business Intelligence system can help a company surge from recession.

“Business intelligence is designed to support the decision making process,” says Schwenk [senior analyst at Ovum's software division]. “Properly used and implemented it can help companies weather the economic storm.”

Source: http://www.computerweekly.com/Articles/2009/07/30/237111/using-business-intelligence-to-steer-through-the-recession.htm, July 30th, 2009

According to the same article this senior analyst notes an interesting development. Business intelligence tools are no longer the exclusive domain of managers and key decision makers, rather they are being widely dispersed throughout entire organisations more than before. The analyst adds that in call centres, for instance, this has led to an improvement in customer service as more information means fewer questions and faster responses.

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