Advantages and Disadvantages of Management Information Systems

The benefits and costs, advantages and disadvantages, and significance of Management Information Systems (MIS) are essential elements that a company should consider before it can invest in the system. Organizations should consider the advantages and disadvantages of automated management information systems in order to decide whether to invest in the project or not.

Advantages of Management Information Systems

Saves Time: MIS enables the company to avoid time wasting and monotonous processes in its business operations.

Effective Decision Making: It enhances effective decision making and facilitates effective business operations. Management information system acts as a tool that can be used by the organization to obtain historical or current-period data in order to make informed business decisions and enhance an effective strategic management.

Visibility: Another advantage of an automated Management Information System is that it enhances visibility in business processes. In turn, visibility of business operation enables the company’s management to control its business processes effectively.

Operational Efficiency: Automated management information systems also facilitate an effectively streamlined supply chain so that the business operations can add value to its output for the benefit of customers. It enhances efficiency of data storage and flow of information in order to make business operations efficient and effective.

Improved Employee Performance: Through well-implemented MIS, the company management is also able to monitor and evaluate its employees successfully; hence achieving staff accountability, commitment and engagement which promote workforce performance and overall organizational objectives.

Managing human resources: Management information system is also important for the management of human resources because it enables the HRM department to communicate with employees, manage payrolls and keep records of personnel. Digitally stored information is also possible through the use of MIS. Management Information systems provide an instant access to information resources, employee reports and management information through automated dashboards.

Improved Business Outcomes: This enables the company’s management to monitor and control operations effectively. It also enables the management to understand the strengths and weaknesses of the business so that it may maximize on its strengths and minimize on its weaknesses.

Coordination Across Departments: Through management information system (MIS), a company can be able to access a wide range of information databases in order to facilitate coordination of various functional departments of the company.

Knowledge Management and Information Sharing: In the highly uncertain, changing and competitive business environment, knowledge is an essential part of a business management. Easy access to information databases is a good way of obtaining knowledge and using it for management of operations.

Data Storage: Inventory management, internal control and product planning functions may use automated information systems to archive, manage and backup files and documents for easy access and retrieval of historical data in future.

Effective Job Performance: Improved Management information systems also facilitate effective, quick and accurate completion of business tasks; hence minimizing the incidences of redundancies in job performance.

Communication: Management information systems enable the company to communicate effectively with its stakeholders including customers; hence achieving customer satisfaction and winning trust from investors.

Disadvantages of Management Information Systems

There are also various disadvantages associated with management information system.

High Costs: One of the cons of this system is that it requires a lot of capital to start. The cost of capital of starting an automated management information system is also large.

Labor Displacement: Automation of information systems also leads to labor displacement as MIS takes over the information management functions of some IT workforce. It is always common for employment opportunities to be replaced by automated management information systems at company management levels.

Constant Monitoring & Training: MIS is a highly sensitive technology which requires constant monitoring training. This may consume more time and resources.

Lack of Flexibility: An automated system is difficult to update. MIS is always designed for a specific purpose and it is difficult to change it to meet the changing business needs.

Despite these common disadvantages of management information systems, it is clear that this technology is effective in achieving effectiveness and efficiency of business operations. This may lead to increased profits which will be able to cover the cost of capital invested in the project and earn more profits for the company in future.

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