How a Management Information System Aids Business Decisions

Management Information System

Posted on May 11, 2024 at 10:05 PM

Data is the new oil, but raw data alone is about as useful as crude oil trapped beneath the earth's surface. To unlock its true potential and power your business engine, you need an expert refinery - a management information system.

In this article, we fill you in on exactly how this new tool helps you make smart decisions.

What are the 5 main types of management information systems MIS?

Different fields of business use different information systems, each type can depend upon the company’s processes and needs. However, most MIS can be categorized into five main types:

  1. Transaction Processing Systems (TPS), which are basic operational systems, are involved in the everyday activities of the business sector such as salary calculation, order entries, inventory updates, and other data processing activities critical to the business's running.

  2. Management Information Systems (MIS) - The classical MIS aims to assist managers at different levels to issue reports, key figures, and other data compilating the business performance and core operation stats.

  3. Decision Support Systems (DSS) - DSSs are more analytical and employ specialized models, data analysis tools, and databases to aid in complex reasoning like forecasting, risk assessment, and planning by management.

  4. Executive Information Systems (EIS) - An EIS integrates and summarizes the most important data from different sources into special reports and dashboards and makes these high-level and focused reports accessible to top leaders to aid collaboration efforts and the planning of the organization's strategic activities.

  5. Artificial Intelligence Systems (AIS) - The existing AI tools use machine learning technology, data science, expert systems, and other advanced analytical techniques to identify patterns, make decisions, and even take administrative actions automatically with minimum involvement of human beings.

Management Information System

What does a MIS do?

The main function of an MIS in the organization is to provide means for communication and coordination among employees. At the core of every MIS is the process by which an organisation’s raw data are transformed into meaningful information and decision-making tools for managers. Some of its key responsibilities include:

  • Data Management - Gathering, saving, protecting, and providing proper accuracy/integrity of data for the whole organization from different sources inside and outside the organization.

  • Data Processing - Converting raw data to reports, dashboards, metrics, and other outputs that are user-friendly and can be interpreted as meaningful information.

  • Analytics & Intelligence – By introducing more strategic analytics techniques such as forecasting models, simulations, data mining, and artificial intelligence, hidden features will be unraveled to discover insights, patterns, and ideas.

  • User Interfaces - Creating easy-to-use dashboards, reporting tools, and other software that managers can use to access the data they need.

  • Process Improvement - Locating the possibilities to enhance operations, create more effective procedures, decrease errors/risks and inform leaders better by using sumptuous information systems.

What’s the Role of MIS (Management Information Systems)?

An efficient MIS is a vital tool that it provides decision-makers with the relevant information promptly to power them. There are several benefits and applications of MIS including:

  • Unified Reporting & Control - Under MIS, data that is spread across different systems can be consolidated into a single reporting, for it grants leaders visibility to the core performance metrics and close monitoring of operations.

  • Fast Resolution - Having timely access to current data allows individuals to properly study problems or opportunities, gather all the information, explore possibilities, and design a structured response quickly and efficiently, it’s a great way to elevate your management skills.

  • Smarter Decisions - If you want to master decision-making, learning MIS is one of the major skills you must keep in store. With sophisticated computing and forecasting, MIS helps data-driven decision-making in various strategic areas, such as strategic planning, capital investments, risk management, and others.

  • More Efficient Systems - Process automation, decision support tools, and other system optimizations allow you to choose quickly and with less likelihood of errors.

  • Competitive Advantage - Companies that learn to leverage their data resources stronger than competitors will gain advantages through increased agility, data-driven strategies, and better execution of operations.

How to master MIS?

Let's say you have been collecting data for a while and you have a solid database but you're finding it challenging to make decisions based on that data, this process can be programmed to be easily computerized with a management information system. MMIS offers you a chance to take all this quantitative data collection and turn it into useful results, here's how you use this information in the best way possible:

  • Join an online program and earn a degree: Before you attempt a DIY job at being an analyst, you need to learn what you're doing. All masters were once students and if your MIS is to be integrated properly, you must master it yourself. Train your company staff or join management training courses london yourself to learn how you can collect the right data and form good hypotheses.

  • Start practicing: Good theoretical knowledge is the first base of learning, but it hardly prepares you for the real world! Now that you have a grasp on the basic knowledge of MIS, you need to start integrating it into your office or department. Start small and set goals for yourself, it's important to maintain consistency if you want great development in the long run.


In a nutshell, an effective management information system fills the gap between an organization's data and the needs of its decision-makers for information. MIS provides relevant, up-to-date, and trustworthy information that is customized to user roles, and enables leaders to navigate the business with the necessary clarity and confidence.