The field of management information systems (MIS) is concerned with a special class of information systems, used to evaluate other information systems in use in the operations of an organization, and to automate, support, and supplement human decision making processes involved in those operations. Like other information systems, the 21st century’s management information systems are dependent on and an outgrowth of the rapid sophistication of computer technology at the end of the 20th century and the availability of cheap computing power and an enormous software industry prepared to produce specialized software for business operations.
Management information systems is not simply the study and implementation of the software and other information technology that can be used in the workplace, or of management techniques in operating a business. It is not even the combination or intersection of the two. MIS examines the relationship between the two, and the emergent phenomena associated with that relationship. While accounting information systems, essentially a subset of MIS, focuses on the financial and record-keeping aspects of the business’s operations, MIS looks largely at what organizational theory calls “internal control.”
Internal control is the way in which a business’s resources are allocated and recorded, and is thus implicated in the business’s security—its protection from fraud, infringement, negligence, theft, and mismanagement. The concerns of internal control are efficiency, reliability, clarity of reports and records, and compliance with standards and objectives. It prizes consistency, deriving both fairness and efficiency from the practice of handling any given situation in the same way every time, whether it is a crisis or an everyday business transaction.
In the interest of preventing fraudulent financial reporting, the Committee of Sponsoring Organizations of the Treadway Commission (COSO), founded by the United States’s major accounting associations, encourages the use of its Internal Control–Integrated Framework. Under this framework, internal control is discussed in terms of five components: the control environment, the foundation for internal control; risk assessment, the discovery and analysis of the risks involved in the attempt to achieve the organization’s objectives; information and communication, the systems involved in information processing; control activities, the processes designed to carry out management’s directives; and monitoring, the self-evaluation of the system. Clear objectives and budgets must be set before any of this framework can be in place; a surprising amount of poor management comes simply from the lack of explicit objectives, without which neither success nor progress toward it can be recognized.
MIS often involves decision support systems (DSS), a class of information systems that augment decision-making processes with software by making the relevant data easy to access both in raw form and organized in various categories and databases. Purchasing decisions are informed by inventory and sales data, for instance, while decisions about an employee’s contract are easier to make when his contributions are easy to identify and collate, instead of relying on general impressions that can be affected more by personal relationships and chemistry than objective business sense. Decision support systems can be communication-driven, facilitating the decision-making processes involving multiple people; data-driven, as in the purchasing example; document-driven, when the relevant data is “unstructured” (in the form of customer letters, for instance, as opposed to manipulable numbers in a spreadsheet); knowledge-driven, when procedures or problem solving are involved; or model-driven, when the current situation can be compared to others.
Executive information systems are a subtype of decision support systems and are specifically designed for executive-level decision making affecting the whole of the company, and focused on the overall goals of the company more than the day-to-day transactional operations. The needs of these systems vary by the company’s industry, but will include significant data about and evaluations of the other parties the company works with—buyers, vendors, contractors, regulatory agencies, and so on—and relevant industry-wide information.
Expert systems, instead of supplementing the human decision process, attempt to reproduce human expertise in a specific domain. Far more than simple databases of facts, these systems are based on the discipline of knowledge engineering, which integrates and formalizes knowledge into computer systems using sophisticated mathematical knowledge and a thorough understanding of cognitive science.
- Marion Ball, Charlotte Weaver, and Joan M. Kiel, Healthcare Information Management Systems: Cases, Strategies, and Solutions (Springer, 1990);
- Jane P. Laudon and Kenneth C. Laudon, Management Information Systems: Managing the Digital Firm (Prentice Hall, 2007);
- George Marakas, Decision Support Systems in the 21st Century (Prentice Hall, 1999);
- James O’Brien and George Marakas, Management Information Systems (McGraw-Hill, 2008);
- Effy Oz, Management Information Systems (Course Technology, 2008);
- J. Power, Decision Support Systems: Concepts and Resources for Managers (Quorum Books, 2002).
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