Limitations on Management Information Systems

bizfluent article image

A Management Information System (MIS) is a valuable tool company management uses to gauge the effectiveness of their business operations. The MIS can provide detailed insight to certain portions of a company and also assist management with making critical business decisions. While the style and format of the MIS has changed over the years, its use in management decisions has increased greatly.

The Facts

An MIS is one method a company uses to obtain reliable information regarding its business operations. The MIS should not be concerned with whether the information can be retrieved, but rather how and what information should be retrieved so management can make effective decisions. Once information is provided through the MIS, decisions can be made regarding the effectiveness of business operations. Limitations do exist with an MIS, such as the expense to create and implement an MIS, training time for employees, lack of flexibility and capturing wrong or incomplete information.

MIS Expense

MIS implementation can be very expensive for companies looking to manage their operations more effectively. All divisions and processes must be reviewed when determining what information management wants extracted for decision purposes. The cost of this review followed by the installation costs can be extremely expensive for large companies. Additionally, new employee hiring or employee training related to the MIS can also add to the implementation costs.

Employee Training

Properly trained employees are a critical part of an MIS. Employees are at the front lines of business operations and create or manage the daily activities of the company. If an MIS finds a system flaw or management decides to change a process based on the MIS information, re-training employees will usually be required. The length and depth of the training may vary, making it difficult to estimate the cost of this training. Management will also have to account for the lost productivity during this training period.

MIS Flexibility

Once an MIS is created and installed in a company, it may prove to be an inflexible system. Making changes quickly to reflect fluctuating business operations may not be possible depending on the MIS style and functionality. While correcting policies such as internal controls or operating procedures may be easy, company-wide changes such as service changes, production enhancements or marketing strategy may not be simple. Major business changes will require major changes to the MIS, leading to increased costs and downtime of information reporting.

Information Flaws

The MIS is designed to provide information to management so sound decisions can be made regarding company operations. The biggest flaw an MIS can have is pulling incorrect or inadequate information for management. This problem results in wasted time and money for the company, leading to another review of the MIS to correct the information flaws.