Following steps are involved in the development of an appropriate MIS for a business organisation:
- Defining and analysing various types of decisions made in the organization:
The MIS designers should thoroughly analyse the existing decisions- making system of the organisation. This requires a study of different levels of decision makers and the priorities of these decision makers. The purpose of this study is to ensure the collection, analysis and dissemination of right information for different decision makers in the organisation.
- Comparison of costs and benefits of the system:
The MIS of the organisations should be designed in such a manner so that the benefits out-weight the cost of collecting, analysing and presenting information. Depending upon the size of the organisation, alternative means of providing information for managerial decision making should be studied and evaluated in terms of their costs and benefits.
An effective MIS not only evaluates information for presentation but also eliminates unnecessary data. The MIS should summarise and condense information so that it can be easily absorbed and used for decision making.
- Pre-Testing of the systems and training of operators:
MIS should be pretested before it is put to use. If the system is not pretested then problems are likely to arise and changes in the system at that time may prove to be very expensive. Also proper training should be imparted to the managers to understand the system so that they can make proper use of the system.
- Proper planning for storage of information:
Proper arrangement should be made for storage of information. Ail information should be stored in disaggregated files. New data should be added to the existing data in a given category as it is received.
Different decision makers with similar information needs should be identified so that they can be grouped together for dissemination of information. This would avoid duplication and waste.
- Mechanism for gathering and processing data:
Proper methods for information processing must be selected. This requires determination of steps for the purpose of collecting, storing, sorting, evaluating, transmitting and retrieving information. A system of controls should also be developed so as to identify and correct any deficiency that might occur in the system.
- Proper arrangement for dissemination of information:
Proper arrangement should be made for the dissemination of information at the right time to various decision makers. Information delayed is information denied. Proper formats should be designed for the dissemination of information to various decision makers having regard to their information needs.
- Review of MIS at periodical intervals:
Functioning of the MIS should be reviewed at periodical intervals. This review helps in identifying deficiencies in the existing MIS and making appropriate changes to overcome such deficiencies.
Essentials of a good management information system (MIS) are as follows:
MIS is designed to provide selected decision oriented information to management to plan, control and evaluate the activities of a business organisation.
(i) The information provided by MIS should help in the evaluation of performance of various managers in relation to the goals of the enterprise.
(ii) MIS should follow systematic procedures for collection, processing and dissemination of information so as to ensure accuracy and consistency.
(iii) Only relevant data should be collected for further processing, collection and processing of unnecessary data should be avoided.
(iv) The MIS should be capable of providing right information at the right time because information delayed is information denied.
(v) The MIS should present information in a manner that it can be used for rational decision making.
(vi) MIS should be flexible so that appropriate changes can be made in the system in case of need.
(vii) MIS should identify and recognise the functional as well as personal relationships within an organisation.
(viii) MIS should be evaluated in terms of benefits and costs. The costs of the system in any case should not exceed its benefits.