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Information Systems in Business – The Decision-Making Tools

In any business, decisions are critical. Every business, if we look closely, is fundamentally a decision-making process and the information systems in business are the decision-making tools. The decisions are made for the future, yet they are founded on information from the past and present. As a result, the relevance and accuracy of the data on which decisions are based are critical.

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A business is not made up of just one process. In truth, business activities are completed through the completion of a succession or combination of processes. The management information system is the arrangement that a company uses to collect and process data in order to make day-to-day decisions about business processes.

Importance of Information Systems in Business

Rigid and accurate procedures do not guide business processes. This is taken into account by information systems, which prove effective in transforming company operations. Exploring what is the importance of a management information system reveals that one of the most significant advantages of information systems is the reduction in turnaround time. Business owners will benefit to a great extent from this feature.

Book: Management Information Systems 7th Edition, By Ken J. Sousa  (Author), Effy Oz (Author)

Book: Management Information Systems 7th Edition, By Ken J. Sousa  (Author), Effy Oz (Author)

Additionally, the systems will lower the number of personnel needed to set up processes. A few individuals will be able to make a significant difference in the seamless operation of the business.

The information systems deliver useful data to business owners. The system’s functionality can also be improved over time. For example, the system might be used to estimate its impact on business operations, so it’s critical to be able to detect potential changes inside the systems.

However, Nudelman (2008) indicated that good management information systems may become controversial and even costly. The management information systems undergo critical evaluation before being rolled out. This is because their criticality increases if there is more than one business entity operating within a given locality. However, the importance of management information systems in decision-making is beyond any doubt.

How Information Systems are Helpful?

Management information systems provide a variety of advantages. However, there are two types of benefits connected closely: those associated with the system’s implementation process and those associated with the system itself. A business will be required to undertake an evaluation before deploying the system in order to obtain the information needed to make informed decisions and track its progress. Implementing an MIS allows a company to go over all of its essential processes and perform a gap analysis.

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Following the completion of an assessment, the company will be able to determine how the system can help them. According to Kuhn and Stergness (2007), implementing management information systems has a variety of advantages. Reduced operational costs, efficient administration of business operations, and, finally, a rise in business productivity as well as a reduction in negative external influences are just a few of the key advantages.

Critical Evaluation of MIS in Business

An examination of the system will assist the business in determining which system will aid in the improvement of business processes. Although the role of management information systems in business is crucial. But there are several disadvantages to implementing MIS, according to Kuhn and Stergness (2007). The fact that management information systems reduce employee productivity is one of these issues. This has a negative impact on the company because it will require a few people to install the systems.

Additionally, business owners should examine how they will notify clients and customers, how they will maintain track of business documents, and how they will improve the efficiency of accounting processes. Other problems with management information systems include the fact that they require a lot of money. Management information systems are sometimes quite expensive to implement.

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Finally, there is a low possibility that any new management information systems will succeed. The fundamental cause for the failure is the stakeholders’ resistance to the new system.

Information Systems Minimize Problems in Business

Nudelman (2008) suggests several ways to minimize these problems associated with management information systems. The first and most immediate mitigation is to identify various factors contributing to the performance decrease in the system. In addition, the management information systems need to provide a clear structure for handling software products for the system.

Akerman (2008) suggests the creation of a standardized procedure that is based on the rule that an administrator will be in charge of every system. The administrator will be in charge of the system development process. The administrator also needs to ensure that sufficient testing is done to prove that the system works well and that any anomalies that emerge will be reported to the system manager.

The system manager and administrator have to ensure that all errors are corrected as soon as they arise. They also need to make it their priority to ensure that the organization’s specific data record management system is not just compatible with other systems but has more functionality with the main system than what the other systems provide.


Every management information system has its own set of constraints. In today’s world, however, having no MIS is not an option for any firm that wants to succeed. Despite the expenses and risk of failure connected with any MIS project, there are numerous benefits that a company may take advantage of.

This initiative requires the attention of the top management team, who should also guarantee that any functional concerns with the systems are addressed as soon as possible. They must also ensure that the systems should stay functional and are not discarded when they are down due to temporary issues. The main areas of top management to focus on are resource mobilization and stakeholder acceptance, which are the keys to success for any management information system.

Book: Managing and Using Information Systems: A Strategic Approach, 6th Edition, Kindle Edition, By Keri E. Pearlson (Author), Carol S. Saunders (Author), Dennis F. Galletta  (Author)

What are your thoughts about an effective management information system in business? Do share your views in the comment section below for the benefit of our readers.

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