Management Information System or popularly known as MIS is the reporting mechanism whereby senior management gets the information about the affairs of the organisation on various parameters. MIS include information about various KPIs (key performance indicators) to judge the performance of an activity OR department OR entire organisation.
We have discussed about KPIs in a separate article.
Importance of MIS
- Organisation works on the principle of delegation of authorities and responsibilities to the junior level;
- Delegation doesn’t mean that task would accomplish its desired objectives;
- MIS is designed to ascertain what has been achieved during a given period → facilitates in taking corrective actions;
- While budgets are plans; MIS presents the actual results → comparing MIS information vis-à-vis budgets give variances for further analysis;
- MIS communicates the achievements across the departments → brings the harmony in departments’ working.
Who prepares MIS and what is its periodicity?
- Prepared by each department for its departmental head OR senior management;
- MIS can contain information about activities carried out on hourly-basis OR shift-wise OR during the day OR during the month;
- Information gathered from each department are compiled by MIS department and presented to senior management in a cohesive document.
Steps in MIS preparation
- Broad layout of MIS
- Ease in understanding the MIS information → layman’s language → should not be technical → the users must understand what the information means;
- Timely capturing of information for timely action → information is useful when presented timely → delay can lead to MIS losing its impact;
- MIS should not be bulky → prevents the person from analysing the information → should be crisp and highlighting exceptions;
- MIS should be communicated with all the departments → bring oneness in the entire organisation.
- Decide on KPIs (Key performance indicators)
- Agree alongwith department-heads on different measurement indicators on which their performance would be evaluated → mutual agreement is important since they also need to know about the expectations from them;
- KPIs have been discussed in a separate article.
- Periodicity and time in preparation of MIS
- Decide how frequently the information is to be captured and presented;
- Trade-off between time taken in capturing the information vis-à-vis expected benefits from MIS need to be analysed before finalising the period;
- Information capturing and its presentation in the shape of MIS consume time of MIS preparer → efforts should be put in less time consumption;
- The periodicity of KPI depends upon its criticality → short period for critical KPI (e.g. hourly production can be more critical than age-wise analysis of receivables).
- Formats of MIS
- No standard format → depends on organisation’s needs;
- Information must be compared with corresponding information (e.g. current month data compared with previous month data OR current hourly data with previous hour data, etc.);
- Information can be compared with budgets;
- Include observations and suggestions of various departments alongwith actions to be taken;
- Conventionally, MIS is prepared in paper format and circulated amongst users of MIS;
- Usage of integrated software for
- capturing the information through data entries or automatic capturing by computing devices (scanners, sensors, etc.) ;
- highlighting the non-conformances;
- circulation through SMS on mobile / email / reports on internet website
- Highlighting exceptions
- The purpose of MIS is to identify exceptions or non-conformances so that corrective actions can be taken timely so that targets can be achieved.