The process of management requires a lot of data and information for execution of the plan. This requirement arises on account of the fact in each step of management, a variety of decisions are taken to correct the course of development. The decisions or actions are prompted due to the feedback given by the control system incorporated in the management system. The control of overall performance is made possible by way of Budget Summarizes and reports. The summary showing sales, costs, profit and return on investment throws light on the direction the organization is moving to. The exception reports identify the weaknesses tin the system of management.
If effective management system is to be assured, it has to rest on business information. The management performance improves if the business risk and uncertainties are handled effectively. If the information provided is adequate, one can deal with these factors squarely. The information support improves the lack of knowledge, enriches experience and improves analytical abilities leading to better business judgment. So, if efficient information support is to be provided, it calls for a system with the goals of generating management information. A good MIS must furnish information to the managers to expand their knowledge base. He must know the adverse trends in business, the shortfalls and failures in the management process.
The following are some of the justifications for having an MIS system
- Decision makers need information to make effective decisions. Management Information Systems (MIS) make this possible.
- MIS systems facilitate communication within and outside the organization: employees within the organization are able to easily access the required information for the day to day operations. Facilitates such as Short Message Service (SMS) & Email make it possible to communicate with customers and suppliers from within the MIS system that an organization is using.
- Record keeping: management information systems record all business transactions of an organization and provide a reference point for the transactions.