By Philip Yiga | September 4, 2018

Management information systems (MIS) are designed to offer business-owners with the ability to collect, process and interpret data. In fact, the data-sets collected by an MIS involve all aspects of business operations including; sales-revenue, production-costs and employee-output. On the other hand, business-owners can examine MIS-data, compare it with previous time-frames and then adjust their production strategies. However, although management information systems provide some noticeable advantages for business owners and managers, they also have some significant drawbacks which all be listed below.

 

Advantages Of Management Information Systems:

1. Improved communication: Management Information Systems help to improve on communication amongst executives, managers, department heads and employees within an organization. For example, a fully integrated MIS system provides the same data framework to the sales department as it provides to the manufacturing plant and this sharing of data can lead to quick adjustment in the manufacturing plant in-order to align production with sales goals.

 

2. Better Decision Making: The improved communication in all levels of business offered by Management Information Systems helps to improve on the decision-making skills of people in charge. In fact, the information gathered from MIS applications helps people in-charge make smarter decisions. For example, a business-owner can check his MIS system to see the supply-levels of components and this helps him know whether it’s sufficient or insufficient in-terns of meeting his production-goals. Afterwards, the business-owner can decide either to order more components or to lower production targets.

 

3. Improved availability of services by companies: with Management Information Systems, businesses are able operate for 24×7 anywhere around the world. This is possible through the use of automated MIS that make orders and purchases easier and convenient at any time of the day/time in different parts of the world.

 

4. Creation of new job-opportunities: Management Information Systems have actually led to the creation of new and interesting jobs which include; Computer-programmers, Systems-analyzers, Hardware and Software developers and Web-designers thus making the world a better place.

 

5. Increased productivity: Management Information Systems help promote efficient operation of the company through improved supply of information to decision-makers. Additionally, applying Management Information Systems can also help companies put greater emphasis on certain sectors that require improvement in-order to gain a competitive advantage over other businesses.

 

6. Cost effectiveness: If a company acquires its own Management Information System, then it will be able to process all the required information without outsourcing for help from other data-analysis companies which are costly. This actually helps businesses with Management Information Systems to save a lot of money compared to those without these systems.

 

7. Helps companies gain competitive-advantage in the market: By using Management Information Systems, managers have a brief overall performance of a company and then use those statistics to gain competitive-advantage within the market. In fact, Management Information Systems help company-owners take actions quickly in-order to improve the business position in the market.

 

8. Improve on product quality: Management Information Systems provide company-owners enough information on past experiences and customers responses which in-turn helps the company improve on the quality of products produced.

 

Disadvantages Of Management Information Systems:

1. Security-issues: Management Information Systems face data security issues whereby hackers and saboteurs can target sensitive company data like; bank records, vendor information, intellectual property and personal data kept on the MIS and then sell the information to rival companies or even just distribute the information over the Internet in-order to damage the company’s image.

 

2. They are expensive to set-up and maintain: Management Information Systems are very expensive to setup and maintain whereby managers and employees will need to be paid for to learn and acquire skills on how to use and maintain these systems which can be costly for the company. Additionally, Management Information Systems requires regular upgrades that require extra fees and staff.

 

3. Data Quality Issues: The quality of a Management Information System largely depends on the quality of its data. So, if the data is incorrect or insufficient then the MIS won’t work properly and the decisions that managers make basing on the MIS data may be faulty. For example, if business-manager finds a client-order of 10,000-units in a Management Information System and he manufactures or orders more components to meet the client’s order yet in actual sense the client ordered for only 1,000-units, then company will lose a lot of money on making more orders due to an error within a Management Information System.

 

4. Some MIS systems are inefficient: in-case the type of information collected by a Management Information System is not beneficial to the company, then it’s useless and wastage of time and resources to acquire a Management Information System.

 

5. MIS works on quantitative data: management Information Systems only work on quantitative data and not on small-amounts of data which can actually affect the overall performance of the company when it comes to making decisions on matters with limited information.