12 Types of Management Information Systems (Plus Definition)
Computerized databases help departments such as sales, quality control and human resources run efficiently by having key information ready quickly. A management information system helps streamline information in databases to make them useful and ready for relevant employees to access. Learning about multiple database systems can help you understand how departments across multiple businesses function. In this article, we discuss what an information management system is and the various types of management information systems that operate within different business departments.
What is a management information system?
A management information system is a custom system that handles a company's information, assists managers with helpful question results or performs other specific tasks. For example, a system for human resources may help categorize employee names, photos and company information. Managers can use these information systems to monitor a department's activities or compare them with previous results to measure progress. Some management information systems can collect data periodically throughout the workday. Once the system stores it, users can generate reports on-demand.
12 types of management information systems
There are many management information systems, including:
1. Process control
For businesses that have production lines, some management information systems oversee the many processes that create products. A process control system monitors processes like steel production, petroleum processing or automobile construction. Throughout the product's creation process, the process control system gathers data continuously to create reports based on the system's performance. If a part of the process is slower or faster than usual, the process control system can illustrate the irregularity. Since manufacturing companies host multiple processes simultaneously, the process control software can be very important for product and performance regulation.
Process control systems can also show managers when certain important events within a process occur. For example, in a steel processing line, a process control system can create a report if there is a defect in the steel during automated testing. The process control system can be very important for evaluating both a product's regularity and its quality.
2. Management reporting system
The management reporting system produces reports for company operations. These can include financial, operational, attendance, accident and efficiency reports. While a management reporting system doesn't manage every process within a system, it helps manage selected reports from other systems to streamline information to management personnel. For example, multiple systems evaluate a production company's lines, attendance and error reports. A management reporting system gathers any reports from the three systems and translates them into information for management personnel to examine.
With management reporting systems, managers can oversee the operations of a company without gathering data from each department. Some companies may even orchestrate a system besides the management reporting system that creates a detailed, singular report for managers to check. Using management reporting systems, managers can evaluate the financial output, operation efficiency and goal-reaching abilities of the company.
3. Inventory control
Inventory control helps managers track the current state of a department or company's inventory. Managers can use inventory control to understand the impact of any possible spoiling, theft or sale of inventory through a singular report. This can help purchasing managers understand when it's time to restock certain retail items. Inventory control also can help keep track of inventory movements within the warehouse, informing managers if all items arrive at sites safely.
If customers return items for any reason, an inventory control system can help show these returns and how often they happen. Because a company that produces goods for direct sales should inventory to help maintain business, a management information system for inventory control can be important for efficiency and continuous progress.
Related: A Guide to Information Systems
4. Sales and marketing systems
Sales and marketing systems help managers keep track of a company's sales and advertising efficiency. Marketing systems can create reports that help managers improve the quality of products through customer reviews and feedback. They can also help managers better understand distribution networks through reports, helping them learn which ones create customer responses. With sales systems, marketing managers can use reports to learn more about projected sales and compare them to current profits. This can help them understand patterns and derive solutions for future improvement.
Sales and marketing systems can also help managers track the effectiveness of advertising campaigns in stores and where campaigns are in the schedule rotation. These systems can track pricing differences that exist within a product system as well as what discounts and advertising stores currently use for particular products. This can help managers oversee a product's sales and direct more discounts or advertisements.
5. Human resource systems
Human resource systems allow HR managers to control information circulating throughout the company. Electronic devices such as company computers, phones and other machines are part of the company system. With a human resource information management system, HR managers can oversee the activities of supervisors, employees and even contractors to help better assist daily administration. After recruitment, the HR department keeps track of activity to ensure all employees comply with company standards.
A human resource system may also track items such as payroll, employee benefits and retirement funds. It may help manage communication needs, such as legal compliance notifications, training, HR-led meetings and policy updates. Other trackable items are work attendance, timesheets and employee vacation or sick leave. Managers may also use this system to help automate recruitment, helping scan prospective resumes for key details and notifying the team if they meet certain requirements.
6. Accounting and finance systems
Accounting and finance systems help managers track the investments or assets of a company. Managers can use accounting or finance systems to perform functions like payroll, federal law compliance, local taxes, pension funds and state law adherence actions. Auditors can use these systems to generate reports for their audits and generate annual reports for management. An accounting and finance system also can help businesses manage daily transactions such as bank deposits, transfers, income and returns.
When the system manages these financial activities, managers can understand financial activity more intimately and plan for an influx or recess of funds. The system also produces all profit-and-loss statements and reports as balance sheets. Because balance sheets show the financial state of the company, accounting systems can be important for tracking a business's financial health. With these records, a manager can help promote profit and departmental growth or new financial strategies.
7. Decision support systems
Decision support systems gather information from both internal and external resources to help managers make decisions for a business. Internal sources include data from other departments, such as financial data, inventory data or current sales margins during a quarter. External data includes sources such as trends within the industry, rates of interest or cost with other companies or suppliers. A manager can use a decision support system to make decisions concerning building expansion, setting annual work quotas or creating new policies.
8. Expert systems
Expert systems are algorithms that help new employees work with and design concepts in a particular subject. Professionals in an industry may build expert systems to help new employees, contractors or other managers. They may even use artificial intelligence to help further assist different employees based on their previous actions. For example, if an expert system for setting up a new employee's email senses inactivity for a long period, the artificial intelligence within the system may prompt a help button or other assistance tip.
9. Executive information system
Executive information systems report company data to executives directly. It can take processing records, financial information and corrective action summaries and collect them into an easy-to-read report. These executive information systems can display data in several ways, including summaries, graphs, charts and spreadsheets. Employees who receive these reports can use them for comparative departmental research in order to discover new ways to improve efficiency in the company.
10. Transaction system
Transaction process systems collect data during an organization's daily transactional activities. Transaction systems can automate business processes involving deposits, such as payroll. They can also monitor other routine activities, such as products in a queue or reservations for different materials. Transaction systems, unlike financial systems, are automatic. Managers orchestrate transaction systems for processes that stay consistent, such as material a department always uses or funds that transfer between accounts every month.
11. School information management systems
School information management systems help schools and universities manage daily activities efficiently. These systems handle many potentially automatic processes, such as attendance, payroll and employee schedules. With school information systems, teachers and administrative staff can focus on other productive activities while the management system handles automated tasks. While programmers design school information management systems for the academic setting, they share many attributes with financial management and human resource systems.
12. Local databases
Local databases are community-managed systems that provide information to an area's residents. They may contain information regarding business listings, public service offerings, social surveys and public data. Local databases can be some of the most customized out of all the management information system types, as managers, mayors or council members can create a local system for multiple purposes. Managers may create local database systems to help employees manage database information, such as employee profiles, training data, process reports and general employee management.
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