- Information system management and control procedures which define:
- how information will be used in the company
- which information is critical
- which reports will be produced and who will receive them
- Hardware and software which processes the data and generates the reports
- Provide an overview of operations
- e.g., improvement in overall performance vs. targets
- Identification of problems and inefficiencies
- e.g., high inventory holding costs due to poor production planning
- e.g., production cost overruns
- Identification of potential problems in advance
- e.g., upcoming shortfall in cash
Management information system supports all vital processes of a company
- Day-to-day operational decision-making and problem solving
- e.g., how much metal must be ordered to produce 4,000 trucks
- Strategic decision-making
- e.g., identifying the company's most successful markets and profitable products
- Direction for planning and budgeting
- e.g., which departments drive the production plan and how
Benefits of a well planned management information system
- A source of competitive advantage
- increased flexibility
- improved customer responsiveness
- better information in a timely manner
- information sharing leads to improved effectiveness of communications
- Cost reduction/enhanced efficiency
- efficiencies of time, resources and costs
- using the same data increases effectiveness and reduces chances of error