Creating the MIS

There are four recommended steps in designing an MIS. These steps are not separate and distinct but they overlap. The development of an MIS calls for a major commitment from top management. This commitment is vital if the MIS is to be smooth—functioning and operational.

    1.    Study the present system

In evaluating the current information system, one might ask these questions:

(i) What is the present flow of information?

(ii) What is the information used?

(iii) How valuable is this information in terms of decision making?

Identifying any deficiency in the present information system is the reason for asking the third question above.For example there is no need of writing very detailed reports which are never used in decision making.

    2.    Develop a priority of information that managers need

Once the present system is thoroughly understood, it is used to develop a priority of information that managers need. Certain information is vital if a manager is to make proper decisions, but some are merely nice to have even though not critical to the manager's job performance. The design of an MIS must provide for high-profit information while low on the priority list should be guaranteed only if their benefits exceed the costs of producing them.

A good approach to prioritizing information needs is to have individual managers develop their own priority lists and to integrate them into a list for the entire firm. Some departments may find that the information they identify as top priority will be far down the organization's list. The needs of the entire firm must override those of a department.

    3.    Develop the new information system

The firm's information needs priority list should govern the design of the new MIS. A system of required reports should be developed and diagrammed. Freaking the whole organization as a unit allows the elimination of duplicated information. At some point on the priority list, the information is not cost effective and should not be included. When an MIS is properly designed, the important information a firm needs in the decision making process is provided.

    4.    Choose a computer

It is reasonable to assume that the MIS for most firms will make use of a computer. Because of computers' increasing use, it is becoming very important for a manager to be computer literate.

A common mistake many firms make is to purchase a computer and then attempt to design the information around the computer. The computer chosen should provide the best capability of processing data that management needs as accurately and currently as possible. Because there are many types of computers with different capabilities, one must review the alternatives and select the most beneficial.