Business Information Systems and Their Uses

Topics: Decision theory, Information systems, Decision making Pages: 18 (7344 words) Published: May 16, 2013
Business Information Systems And Their Uses.

For an organisation to be able to function successfully in today’s highly competitive business environment it needs to ensure that it can process data and information from both the internal and external environment and then to be able to gain knowledge from this and to use this knowledge to create strategies and to make informed decisions about the present and future managing of the organisation. To be able to do this an organisation uses Management Information Systems (MIS) and these are technological systems which can be utilised by the organisation to support the human decision making process. Whilst there is a wealth of information on the internet or on websites, MIS differ from this. MIS are not just about accessing data, they are about using this data to create systems which support and help the decision making process. “MIS are systems, which make available the right information to the right person at the right place, at the right time, and in the right form”. (Source: Accessed 28th April 2010). Due to the explosion of technology over the last couple of decades every company now uses IT to be able to not only function effectively but to be able to compete and IT has allowed many more companies to compete globally as well as nationally, therefore it can be argued that the amount of data and information that is needed to be gathered and processed for a business to be able to function is far greater than ever before and to be able to do this systems had to be developed that could hold and analyse this amount of data. “As more and more data was stored and linked managers began to analyse this information into further detail, creating entire management reports from the raw, stored data. The term "MIS" arose to describe these kinds of applications, which were developed to provide managers with information about sales, inventories, and other data that would help in managing the enterprise. An 'MIS' is a planned system of the collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management”. (Source: Accessed 28th April 2010). So it can be argued that the main function of an MIS is to assist managers in the decision making process within their organisation. The decisions that may be effected are such issues as; aiding in deciding strategies for the company, developing the company’s aims and objectives, assessing the strengths and weaknesses of the company which in turn will allow them to benchmark themselves against competitors, assessing the external environment (e.g. in times of recession) and keeping track of the financial position of the company. So it can be argued that MIS are an excellent tool for managers as they allow them to be able to analyse huge amounts of data that would be impossible for a human mind to retain and then to assist them as a tool for decision making. It can also be argued that because the decisions being taken are based on such a huge amount of information that has been gathered and analysed then some elements of risk can be eliminated in the process of the decision making. However it must be remembered that MIS do not make the decisions themselves but are an aid to the process. “While MIS systems cannot create business strategies by themselves they can assist management in understanding the effects of their strategies, and help enable effective decision-making”. (Source: Accessed 28th April 2010). Because MIS allow scenarios to be created form the information that has been gathered managers can use these scenarios to help them to try and predict the outcome of any decisions that they may make, and as mentioned previously this helps to eliminate some of the risks involved in business decision making. So for example, managers can input data about price changes they may wish to make and evaluate any changes that this...
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