Management Information Systems Types: Functions and Importance

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Table of Contents

Introduction
Transaction Processing System Functions and Importance
Management information system functions and importance
Functions and importance of DSS
Enterprise resource planning (ERP) functions
Functions of Expert Systems
Reference List

Introduction

A management information system (MIS) is a business tool that integrates technology, information, and people. It differs from other types of information systems in that it can be used to evaluate an organization’s operational activities.

An MIS is tailored to be used alongside human decision-making. There are different types of management information system notably Transaction processing system (TPS), Management information system (MIS), Decision support system (DSS), Expert System (ES), and Enterprise resource planning systems (ERP).

This essay seeks to compare these five different types of management information system in terms of their functions and importance.

Transaction Processing System Functions and Importance

A Transaction Processing System (TPS) is a type of information system that collects, stores, retrieves, and modifies data transaction procedures in an organization. In this process, transaction passes through an AICD test where data is generated or modified before it is stored in the information system.

Transaction processing systems serve three functional areas: system routine functions, system administration functions, and application development functions. System routine functions entail the provision of an execution environment where integrity, availability, and security of data are enhanced. It also guarantees fast response time and high transaction throughout the process.

The system administrative functions of the transaction processing system include provision of administrative support that enables users to configure, monitor, and manage their transaction systems. Application development functions encapsulate the provision of functions for use in custom business applications like access to data, intercomputer communications, and design and management of user interface.

Transaction processing systems help in scheduling and loading by controlling the rate and order at which processing of tasks take place. High priority is given to tasks with the best response times and with respect to the availability of application servers and other system resources. A TPS is vital in managing the system resources as it maintains a pool of operating resources that are used in transaction processing, application program loading, and acquiring and releasing storage.

A transaction processing system helps in monitoring the progress of tasks and can suspend tasks waiting for input while also adjusting task priorities. It ultimately resolves any problem encountered during processing. TPS also help in managing data. It obtains data to be used in performance of tasks, coordinates resource managers, locks the data for update, and records logging changes.

This IS tool manages communication by monitoring communication with users and servers, ensuring that communication sessions are initiated appropriately and manages data handling and conversion processes. Finally, it routes data to the intended destination (Weikum and Vossen, 2002, pp. 67). TPS aids time management efforts as it manages transaction processing in relation to the passage of time.

It ensures that tasks are started at predefined times. The dates and time when events started are logged onto disk. In general, A TPS controls part of business system to provide a certain degree of automation to otherwise manual processes.

Diagram of TPS System

Diagram of TPS System

Management information system functions and importance

A management information system is very pivotal in effective and efficient management of organizations. It makes use of technology, information, and people as its primary resources. It is often used in analysis of operational activities within an organization and serves myriad functions within an organization.

For MIS to effectively serve its functions, people with both software and hardware installation skills have to be engaged. Employees within the organization must also have people skills. The MIS systems can be used in controlling tax and finance within an organization (O’Brien, 1999, pp. 12).

Management information system functions can be classified into help desk, support team, service and support, training, networking, purchasing, installations, research and development, operations, planning, and budget. At the help desk MIS can be used to aid in solving problems.

Calls that stream to the help desk telephone can be entered into database where they can be quickly retrieved and updated. At the support team level, an MIS helps teams assigned to different departments and projects to offer their ongoing knowledge and progress in areas where they operate in an improved manner.

MIS can also be used by service and support teams like those engaged in hardware repair, software support, and warranty services to provide onsite services. The support team will be capable of providing phone support within an organization thereby acting like liaisons between the department head and other support teams.

With MIS, employees can be trained on computer basics, office productivity software, and use of specialized software in every department. MIS can be used in networking an entire organization. It can be used in designing both local and wide area network, their implementation and support.

It can also be used in enhancing server support, backing up, and anti-virus server support. MIS can also be used in Ethernet and fiber optic support. With regard to purchasing, MIS can aid in specifying the specifications ofb hardware and software systems to be purchased thereby maintaining standards for purchases.

It assists in maintenance of fixed assets and grant proposals. With regard to research and development, MIS helps in review of current trends in the industry. After the review, an organization can opt to introduce new technology while evaluating new systems.

With MIS, an organization is capable of doing light data entry and modifications. It can also aid in budgeting and planning where a relationship is maintained between different departments within an organization with respect to areas they deem as priority areas. Planning can be done for long and short-term projects.

Functions and importance of DSS

Decision support systems (DSS), similar to other ISs, aid managers in their day-to-day decision making processes without requiring the presence of computer experts (Laudon & Laudon, 1991, pp. 122). DSSs transform data in such a way that they become useful and quality decisions can be made from them.

DSS serves three main functions: information management, data quantification, and model manipulation. With respect to information management, information is stored, retrieved, and reported in a structured format that is convenient for the user. In the perspective of data quantification, large amount of information is condensed and manipulated analytically into core indicators that reflect the essence of the data.

Model manipulation implies construction and resolution of different scenarios to respond to what if questions. Modules are formulated, alternatives generated, and solutions to proposed models arrived at. It is incumbent that owners of established enterprises become certain that businesses need DSS before buying computer systems and software to initiate it.

Enterprise resource planning (ERP) functions

ERP solutions are used by organizations to streamline and integrate operation processes and flow of information. This procedure helps in synergizing the organization’s resources like men, material, money, and machine through information. ERP was initially recommended for larger enterprises such as multinational companies due to the costs incurred in its implementation.

However, non-multinational companies have so far gone ahead and implemented its usage so that they have competitive advantage over their competitors. Some of the notable functions of ERP include helping improve information access throughout an organization. The system helps in routine business processes like tax structures, invoicing systems, and provides a cohesive clientele database that can be accessed by all departments within the organization.

With respect to improved business processes, an enterprise can have a competitive advantage over its competitors when it integrates ERP. With the implementation of an ERP system, the use of paper records becomes limited because of availability of online formats where data can be stored and retrieved easily. It facilitates better monitoring and faster resolution of queries (Sheilds, 2001, pp.9).

Functions of Expert Systems

Expert systems are computer applications that integrate computer equipment, software, and specialized information to imitate expert human reasoning and advice. An ES system provides discipline specific advice to their users. Their usage is restricted to commercial and industrial setups.

It has a searching program known as an inference engine which contains all systematic processing rules and logic associated with them. It also consists of a knowledge database that stores necessary factual, procedural, and experiential information that represents expert knowledge (Turban and Jay, 1998, pp. 51).

Through knowledge transfer, expertise is normally passed from human to knowledge engineer who creates and structures the knowledge database through completion of logical, physical, and psychological tasks. This is why expert systems are fondly referred to as knowledge based information systems. Human expertise is widely distributed through the expert system thereby making businesses to realize the benefits of consistency, accuracy, and reliability as pertains problem solving.

Reference List

Laudon, K.C., and Laudon, J.P. (1991). Management Information Systems: A Contemporary Perspective. New York: Macmillan.

O’Brien, J. (1999). Management Information Systems – Managing Information Technology in the Internetworked Enterprise. Boston: Irwin McGraw-Hill.

Sheilds, M.G. (2001). E-Business and ERP: Rapid Implementation and Project Planning. London: John Wiley and Sons.

Turban, E., and Jay, E. A. (1998). Decision Support Systems and Intelligent Systems. Upper Saddle River, NJ: Prentice Hall.

Weikum, G., and Vossen, G. (2002). Transactional information systems: theory, algorithms, and the practice of concurrency control and recovery, New York: Morgan Kaufmann.

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