Information Technology Reference
In-Depth Information
Figure 10.3
Benefits of Information and
Decision Support Systems
The Benefits of Information and
Decision Support Systems
+
-
Positive impact
Negative impact
Performance
■ Decision quality
■ Problem complexity
Cost
■ Hardware
■
Software
■
Database
■
Networks and Internet
■
Personnel
■
Procedures
The performance of these systems is typically a function of decision quality and problem
complexity. Decision quality can result in increased effectiveness, increased efficiency, higher
productivity, and many other measures first introduced in Chapter 2. Problem complexity
depends on how hard the problem is to solve and implement. The cost of delivering these
systems are the expenditures of the information technology components covered in Part II
of this topic, including hardware, software, databases, networks and the Internet, people, and
procedures. But how do these systems actually deliver benefits to the individuals, groups, and
organizations that use them? It depends on the type of information system. We begin our
discussion with traditional management information systems.
A management information system (MIS) is an integrated collection of people, procedures,
databases, and devices that provides managers and decision makers with information to help
achieve organizational goals. MISs can often give companies and other organizations a com-
petitive advantage by providing the right information to the right people in the right format
and at the right time. For example, a shipping department could develop a spreadsheet to
generate a report on possible delays that must be addressed to increase the number of on-
time deliveries for the day. A music store might use a database system to develop a report
that summarizes profits and losses for the month to make sure that the store is on track to
make a 10 percent profit for the year.
Management Information Systems in Perspective
The primary purpose of an MIS is to help an organization achieve its goals by providing
managers with insight into the regular operations of the organization so that they can control,
organize, and plan more effectively. One important role of the MIS is to provide the right
information to the right person in the right format at the right time. In short, an MIS provides
managers with information, typically in reports, that supports effective decision making and
provides feedback on daily operations. Figure 10.4 shows the role of MISs within the flow
of an organization's information. Note that business transactions can enter the organization
through traditional methods or via the Internet or an extranet connecting customers and
suppliers to the firm's ERP or transaction processing systems. The use of MISs spans all levels
of management. That is, they provide support to and are used by employees throughout the
organization.
