MIS, EDP, DSS and Management Control functions

We will define an MIS as a formal method of making available to management the accurate and timely information necessary to facilitate the decision making process and enable the organization’s planning control and operational functions to be carried out effectively. The system provides information about the past, present, and projected future and about relevant events inside and outside the organization.

Organizations have always had some kind of management information system, even if it was not recognized as such. In the past, these systems were highly informal in setup and utilization. When registrar office staff kept transcripts on handwritten charts, they were using an information system. Not until the advent of computers, with their ability to process and condense large quantities of data, did the design of management information systems become a formal process and field of study.

EDP When computers were first introduced into organization, they were used mainly to process data for a few organizational functions usually accounting and billing. This was true at colleges and universities, too. Because of the specialized skills required to operate the expensive, complex, and sometimes temperamental equipment, computers were located in electronic data processing (EDP) departments. As the speed and ease of processing data grew, other data processing and information management tasks were computerized. To cope with these new tasks, EDP departments developed standardized reports for the use of operating managers.

MIS Emerges:

The growth of EDP departments spurred managers to focus more on planning their organizations’ information systems. These efforts led to the emergence of the concept of computer based information systems (CBIS), which became better known as computer based MIS or simply MIS. As the EDP departments’ functions expanded beyond processing of masses of standardized data, they began to be called MIS departments.

The US Army has been able to utilize MIS effectively and humanely as an immense aid in the downsizing of the post Cold War military. In 1992, for example, more than 170,000 people left the Army. As many as one third of the Desert Storm era personnel will be affected by force reductions before the downsizing of the Army is complete. To ease the process, the Army has developed the most advanced and comprehensive military outplacement program ever. This program includes the establishment of 55 job assistance centers worldwide, a qualified group of 286 job counselors, and a computer data base linked to more than 11,000 US national employers. The job Assistance Center (JAC) a job bank network, is a state-of-the-art system. The custom designed automated system consolidates client services, counseling support, scheduling and administration. The user friendly program even has an automated resume writer designed specifically for Army personnel.

A decision support system (DSS) is an interactive computer system that is easily accessible to, and operated by, people who are not computer specialists, who use the DSS to help them plan and make decisions. The use of DSSs is expanding, as recent advances in computer hardware and software allow managers and other designated employees to gain “on-line” or “real-time” access to the databases in MIS’s. The widespread use of microcomputers has enabled managers to create their own databases and electronically manipulated information as needed rather than waiting for reports to be issued by the EDP/MIS department. While MIS reports are still necessary for monitoring ongoing operations, DSS permits less structured use of databases as special decision needs arise. An academic dean might use a DSS system to analyze grade trends in certain courses, without needing to commission a formal study of the matter by the registrar’s office.

For the management control functions of top managers, the sources of information must be both internal and external. Top managers are typically concerned with the overall financial performance of their organizations. They therefore need information on quarterly sales and profits, on the other relevant indicators of financial performance (such as stock value), on quality levels and customer satisfaction, and on the performance of competitors. Internal control reports for top managers come in at monthly, quarterly, and sometimes even annual intervals. A university president in tight economic times spends a great deal of time studying expenses reports, as well as reports about alumni donations to the university.