MANAGEMENT INFORMATION
SYSTEM
1
BASIC CONCEPTS AND SCOPE OF MIS
ARIZONA STATE UNIVERSITY
CIS 235 - INTRODUCTION TO INFORMATION SYSTEMS
WEEK 3
A. DEFINITION OF MANAGEMENT INFORMATION SYSTEM (MIS):
The definition of a Management Information System (MIS) involves a deep
understanding of its basic concepts. It can be defined as an integrated combination of
information technology, business procedures, and human participation that work together to
collect, store, process, and present information that supports organizational decision-making
and management (Laudon & Laudon, 2017). In this case, information technology includes
the hardware and software used to manage data, while business procedures include the
methods and rules used to manage that information.
The primary role of MIS is crucial in helping organizations achieve their business
goals. By serving as the foundation for decision-making, it provides management with
accurate and relevant information. It assists managers in understanding business situations,
identifying opportunities, and evaluating alternatives to ensure timely and effective
decisions" (Alter, 1991; Alter, 2008). Thus, MIS is not only a technological tool, but also a
system that involves complex interactions between technology, business processes, and
human roles.
In this context, MIS also serves as a support for organizational strategy. According to
McLeod (1983), that MIS provides information needed for long-term planning, helps
organizations identify market trends, and measures and monitors performance to improve
efficiency and productivity. Therefore, the role of MIS is not only limited to the operational
level, but also forms the basis for top-level decision making and formulating long-term
strategies (Erwin et al., 2022).
Overall, a MIS is not just an information technology system, but a complex entity
that combines technology, business procedures, and human interaction. By providing
MANAGEMENT INFORMATION
SYSTEM
2
relevant and accurate information, it is key to achieving an organization's business
objectives and supporting effective decision-making. As a result, it plays a central role in
shaping an organization's strategy and improving overall performance.
B. MIS COMPONENTS:
The components of a Management Information System (MIS) form a crucial
foundation for effective information management. Hardware, one of the main components of
a MIS, involves physical devices such as servers, computers, and data storage devices
(O'brien & Marakas, 2006). This hardware It plays an important role in processing and
storing data that is the basis for the MIS to provide the necessary information.
Software is another important component of MIS. Specialized application software
helps in collecting, managing, and analyzing data to support decision making (Laudon &
Laudon, 2017). By using appropriate software, MIS can optimize its function in producing
relevant and timely information.
Business processes or operational procedures are also a component of management
information systems. Where these business processes or procedures are the steps followed
by the organization in collecting, processing, and using information. This process includes
rules, policies, and procedures that guide how information is generated, stored, and used in
the context of daily operations (Gorry & Scott Morton, 1971; Laudon & Laudon, 2017;
Duggineni, 2023).
Databases, as a key component of a MIS, refer to structured and organized data
storage. Through database systems, MIS can store, access, and manage information
efficiently (McLeod, 1983; Korotun et al., 2020). It ensures the availability of consistent and
reliable data to support managerial decisions.
However, humans remain an indispensable element in the context of MIS. The
human role in the information management process involves understanding business needs,
interpreting data, and making wise decisions (Alter, 2008; Kavanagh & Johnson, 2020).
While technology plays a vital role, human involvement in managing, interpreting, and
using information remains a key factor in the success of MIS.
Some of the above components will run smoothly if the network component is
available properly. Networks encompass the communication infrastructure that allows
MANAGEMENT INFORMATION
SYSTEM
3
hardware, software and people to connect with each other. Networks enable data transfer
between system components, which is essential for coordination and integration of
information across an organization, especially in a distributed business context (Braa et al.,
2004; Silitonga et al., 2024; Pearlson et al., 2024).
Thus, the components of a Management Information System work together to form a
complex ecosystem. Hardware, software, procedures and databases work synergistically
under human direction to produce high-quality information and support the organization's
decision-making process. These components must be complemented and supported by a
good communication network.
C. MIS PROCESS AND FUNCTION”
The processes and functions present in management information systems are:
1.
Driver's License Process
Management Information Systems (MIS) manage information through a series of
integrated processes, starting from data collection to the presentation of useful information.
These processes form the foundation for the MIS function in supporting effective decision-
making and management of the organization.
First of all, the data collection process is the first step in the MIS cycle. Through
various methods such as surveys, sensors, or manual input, data is collected from various
sources to create a rich and relevant information base (Laudon & Laudon, 2017, Rainer &
Prince, 2021).
Once the data is collected, the next step is storage. Database systems are used to
store data in a structured manner, providing fast and efficient access when needed (O'brien
& Marakas, 2006). Storage that It is key to maintain data integrity and availability.
The subsequent data processing process involves transforming raw data into understandable
information. This is the stage where the MIS software performs operations such as grouping,
sorting, and calculations to produce meaningful information (McLeod, 1983).
Data analysis is a critical step in the MIS process, where the information that has
been processed is analyzed to gain deeper insights and understanding. Analytical algorithms
are used to identify patterns, trends and relationships that may not be immediately apparent
(Alter, 2008; Holmlund et al., 2020).
MANAGEMENT INFORMATION
SYSTEM
4
Finally, data presentation is the process of presenting the analyzed information in a
way that is understandable to users. This could involve creating reports, graphs, or
interactive dashboards to support managerial decision-making (Laudon & Laudon, 2017).
By undergoing this series of processes, MIS creates an environment where data is
transformed into valuable information, making an important contribution in supporting the
management of the organization to make informational and strategic decisions.
2.
MIS function:
Management Information Systems (MIS) play a significant role in various aspects of
organizational management, including supporting decision-making, planning, control, and
strategy development. The following is a detailed discussion of these functions:
a.
Managerial Decision Making
MIS assists management in decision-making by providing relevant and timely
information. These systems process data into useful information for managers in
evaluating alternatives, analyzing trends, and predicting decision outcomes (Laudon &
Laudon, 2017). With quick access to the necessary data, managers can make more
informed and precise decisions.
b.
Planning
The planning function of MIS is realized through the provision of information that
supports the strategic and operational planning process. It helps managers identify long-
term goals, measure performance, and plan tactics to achieve organizational objectives
(McLeod, 1983; Soares et al., 2022). With accurate data and in-depth analysis, MIS
becomes a strategic tool for business planning.
c.
Control
MIS plays a role in control by providing a mechanism for performance monitoring and
comparison between actual results and set targets. Through this system, managers can
identify deviations from plans and take corrective actions quickly (O'Brien & Marakas,
2006; Logachev et al., 2022). This helps organizations maintain operational stability
and achieve optimal efficiency.
d.
Organizational Strategy Development
MIS supports the development of organizational strategies by providing information
MANAGEMENT INFORMATION
SYSTEM
5
about the business environment, competitors, and market trends. With in-depth data
analysis, managers can identify new opportunities, evaluate risks, and design strategies
that can improve organizational competitiveness (Alter, 2008; Ecem et al., 2020). MIS
is an essential tool in formulating and adjusting the Company's strategy (Erwin et al.,
2021).
In all, MIS is not just a technological tool, but a system that supports critical management
functions. By providing accurate and relevant information, it becomes the key to achieving
competitive advantage and achieving organizational goals effectively.
D. PURPOSE AND BENEFITS OF MIS:
The implementation of a Management Information System (MIS) in an organization
aims to achieve a variety of positive outcomes that can improve operational efficiency,
better decision-making, and overall organizational performance improvement and even
provide benefits in improving the competitiveness of the organization. The following is a
detailed discussion of the objectives and concrete benefits of implementing a MIS:
1.
Improved Operational Efficiency
One of the main objectives of implementing a MIS is to improve the operational
efficiency of the organization. By automating business processes and providing quick
access to relevant information, MIS helps reduce the time and effort required for
routine tasks (O'brien & Marakas, 2006; Zekić-Sušac et al., 2021). This can include
inventory management, transaction processing, and general operational performance
monitoring.
2.
Better Decision Making
The implementation of MIS aims to improve the quality of decision-making at the
managerial level. By providing accurate data, in-depth analysis, and structured reports,
MIS helps managers evaluate business situations, identify opportunities, and overcome
challenges (Laudon & Laudon, 2017, Kiradoo, 2020). This provides a more solid basis
for informational and strategy-oriented decisions.
3.
Improved Organizational Performance
The implementation of MIS also aims to improve the overall performance of the
organization. By providing tools that support strategic planning, performance
MANAGEMENT INFORMATION
SYSTEM
6
monitoring, and rapid adaptation to market changes, MIS helps organizations achieve
their business objectives more effectively (McLeod, 1983; Fernando et al., 2023).
Better performance can include revenue growth, increased customer satisfaction, and
better competitiveness in the market.
In this context, Alter (2008) highlights that the implementation of MIS should be
geared towards the use of information technology to support organizational policies,
procedures, and goals. Therefore, MIS is not just a technological tool, but a system
that is implemented with a deep understanding of the organization's needs and
strategic goals.
4.
Increased Competitiveness
Through the use of MIS, organizations can improve their competitiveness in the
market. MIS enables organizations to be more responsive to changing market
conditions, track industry trends, and identify new opportunities. With a better
understanding of the business environment, organizations can develop more adaptive
and innovative strategies (Alter, 2008; Pearlson et al., 2024).
By detailing these objectives, the implementation of MIS is expected to bring a
significant positive impact on the performance and competitiveness of the organization in an
increasingly complex business environment. In the context of concrete benefits, Alter (2008)
also highlights that the utilization of MIS should produce measurable results and generate
value for the organization. Therefore, the concrete benefits of MIS utilization are not only
seen in cost savings, but also in the achievement of business objectives and the overall
improvement of organizational competitiveness.
E. SCOPE OF MIS:
The scope of a Management Information System (MIS) can be determined by
considering its roles and responsibilities within the organization. MIS has a broad scope,
encompassing the collection, storage, processing, and presentation of information to support
decisions and overall management of the organization. It involves coordination between
various components, including hardware, software, and databases, as well as the role of
humans in the process (Ketter et al., 2023; Oktaviyana, 2023).
It is important to emphasize the integration of MIS with other systems, such as
Decision Support Systems (DSS) or Executive Support Systems (ESS). This integration
MANAGEMENT INFORMATION
SYSTEM
7
allows organizations to leverage the strengths of each system. SDM, for example, focuses on
data analysis to support better decision-making. The integration of SDM with MIS enables
organizations to blend operational data with in-depth analysis, creating a more
comprehensive information foundation (Gunasekaran & Ngai, 2004; Arifin et al., 2023).
Meanwhile, the integration of MIS with Executive Support Systems (ESS) can
improve executive-level monitoring of organizational performance. SPE provides high-level
reports and analysis to executive leaders, while MIS provides operational details. This
integration creates a seamless flow of information from the operational level to the executive
level, supporting better decision-making at all levels of the organization.
By understanding the scope of MIS and its integration with other systems,
organizations can achieve synergy in information management. The combination of MIS,
SPK, and SPE forms a holistic information ecosystem, ensuring that data is collected,
managed, and used effectively to support organizational goals and decisions (Arifin et al.,
2023).
F. CHALLENGES AND TRENDS IN MIS:
These are the challenges and trends in running a management information system (MIS) in
an organization:
1.
Challenges in MIS
Implementing and running a Management Information System (MIS) in an
organization cannot be separated from a number of challenges that need to be overcome.
One of the main challenges is the issue of information security. In this context, Alter (2008)
states that information security is a critical aspect of MIS management as it involves access
to sensitive data that requires careful protection. Organizations need to implement strong
security policies and technologies to protect business data and information from security
threats such as hacking and malware attacks.
Another challenge is the technological complexity involved in MIS implementation.
The implementation of hardware, software, and system integration can be a complicated
process. Laudon and Laudon (2017) emphasize that companies must manage the
technological complexity for the MIS to function at its best. Organizations need to have
adequate technology resources, as well as a well-trained IT team, to ensure the success of
MANAGEMENT INFORMATION
SYSTEM
8
MIS implementation and operations.
In addition, policy changes can also be a significant challenge in running a MIS.
Policy changes can involve restructuring business processes, changing organizational
culture, and adjusting individual roles and responsibilities. According to O'brien and
Marakas (2006) that the implementation of MIS often requires organizational
transformation, and changes to the organization's culture are often necessary. This can
present resistance and conflict at the organizational level. Therefore, effective change
management and good communication are necessary to facilitate smooth MIS adoption.
In the face of these challenges, it is important to remember that successful MIS
implementation is not just a matter of technology, but also involves human factors and
business processes. With a deep understanding of these challenges, organizations can design
a sustainable and effective MIS implementation strategy.
2.
Trends in driver's license
Management Information Systems (MIS) continue to evolve along with
technological advances. Some of the recent trends in MIS include the use of new
technologies, the integration of artificial intelligence, and the significant impact of digital
transformation (Erwin et al., 2023a).
First, the use of new technologies is becoming a prominent trend in MIS.
Technologies such as the Internet of Things (IoT), cloud computing, and big data analytics
are increasingly being applied to enhance MIS capabilities. Laudon and Laudon (2017)
observed that new technologies provide more advanced data collection and analysis
capabilities, expanding the scope of information that can be utilized by MIS. With the
adoption of new technologies, MIS can more effectively manage and analyze data on a
larger scale.
Later, the integration of artificial intelligence (AI) became an increasingly dominant
trend in driver's license. Artificial intelligence is used to improve the analysis and prediction
capabilities of MIS. Alter (2008) argues that the use of artificial intelligence in MIS can
provide deeper insights and predict trends with greater accuracy. AI integration can help
organizations make smarter decisions and respond more adaptively to market dynamics.
The impact of digital transformation is also an important trend in MIS. Organizations
MANAGEMENT INFORMATION
SYSTEM
9
increasingly understand the importance of transforming digitally to remain competitive
(Sono et al., 2023). McLeod (1983) highlighted that digital transformation changes the way
organizations collect, store, and utilize information. MIS is directly involved in providing
the information basis for digital transformation initiatives, enabling organizations to adapt to
changes in the business environment more quickly and effectively (Erwin et al., 2023b;
Prahendratno et al., 2023).
Overall, recent trends in MIS reflect the evolution of technology and the increasingly
complex needs of organizations. Adoption of new technologies, integration of artificial
intelligence, and digital transformation are key for organizations looking to leverage the full
potential of Management Information Systems to meet the challenges and opportunities of
this digital age.
G. CONCLUSIONS:
In this exploration of the concept of Management Information System (MIS), we
dive into its basic foundation, key components, and important functions in supporting
organizational operations and decision-making. The basic concept of MIS involves the
integration of information technology, business procedures, and people to create a system
that supports the comprehensive management of an organization. The MIS process, from
data collection to presentation, is the foundation for providing valuable information for
decision-making.
Within the scope of MIS, the importance of understanding roles and responsibilities
within the organization is illustrated. The integration of MIS with other systems, such as
Decision Support Systems and Executive Support Systems, enriches information
management and analysis capabilities, supporting management at various levels.
Meanwhile, challenges that organizations may face in implementing MIS, such as
information security, technology complexity, and policy changes, require a holistic approach
and thoughtful change management.
When discussing the concrete benefits of MIS utilization, we highlight increased operational
efficiency, better decision-making, and improved organizational performance. MIS plays a
role in optimizing business processes, providing an information foundation for strategic
decisions, and enhancing organizational performance overall performance, helping the
MANAGEMENT INFORMATION
SYSTEM
10
organization to achieve its business goals.
Finally, through the discussion of current trends in MIS, we realize that the evolution
of technology, integration of artificial intelligence, and the impact of digital transformation
are shaping the role and capabilities of MIS in the modern era. Adoption of new
technologies, utilization of artificial intelligence, and digital transformation are becoming
essential for organizations that want to make optimal use of MIS and remain competitive in
a changing business environment. Thus, MIS is not just a technology tool, but a strategic
key in achieving competitive advantage and long-term success for organizations.
THE ROLE OF MANAGEMENT INFORMATION SYSTEMS IN COMPETITIVE
ORGANIZATIONS
A. THE IMPORTANCE OF MANAGEMENT INFORMATION SYSTEMS:
Information system is a system in an organization that meets the needs of daily
transaction processing, supports the operational, management and strategic activities of an
organization, and provides the necessary reports to certain external parties (Nurmanto and
Gunawan, 2020). Management Information System (MIS) is basically the process of
collecting, processing, storing, and transmitting relevant information to support management
in organizations organized with the support of information and communication technology
(Ellitan and Anatan, 2007; Jusuf, 2019).
Management information systems (MIS) can collect, analyze and present data in
real-time using technologies such as machine learning and artificial intelligence to turn
incoming data streams into actionable information. It can also be used to display and analyze
big data in real time. MIS functions to store data that supports the company's performance
processes, provides the information needed by the company to be more accurate and timely,
and makes it easier for management to manage data planning, monitoring, guiding and
making decisions. MIS can also assist in strategic planning by providing access to real-time
and historical information (Priyo ari wibowo, 2020).
Management Information Systems (MIS) play a key role in competitive
organizations by providing accurate and timely information needed to facilitate effective
control and operational functions (Laudon and Laudon, 2023). Here are some of the roles of
MANAGEMENT INFORMATION
SYSTEM
11
MIS in a competitive organization:
1.
Improving Data Accuracy: MIS helps in collecting, storing, and displaying data
accurately, which is essential for proper decision-making (Paoki, 2012; Puspitasari,
2021).
2.
Eases Coordination: MIS facilitates coordination between divisions within the
company, which is essential for efficient and responsive operations (Puspitasari, 2021).
3.
Improving Quality: MIS contributes to the improvement of product or service quality by
providing information needed for planning, monitoring, continuous improvement, and
evaluation (Nurhayati et al., 2023).
4.
Reducing Operational Costs: By increasing efficiency and reducing waste, MIS can
help reduce operational costs (Nurhayati et al., 2023).
5.
Facilitating Decision Making and Problem Solving: MIS enables faster and more
precise decision making and problem solving, which is critical in a competitive business
environment (Andrian Syahputra, Ragil Wiranti and Widiya Astita, 2022).
6.
Managing Human Resources: MIS also helps in the management of human resources,
which is important to ensure that the organization has a competent and effective
workforce (Mahyadi, 2023).
7.
Supporting Organizational Development: The information provided by MIS is essential
to support the continued development of the organization and avoid competitive
disadvantages (Nurhayati et al., 2023).
8.
Supporting Management Operations: MIS is used to support management operations
which include planning, organizing, implementing, and controlling (Andrian Syahputra,
Ragil Wiranti and Widiya Astita, 2022).
In general, there are various types of MIS and each type of MIS has different functions and
benefits according to the needs of the organization or business (Jusuf, 2019). Some types of
Management Information Systems (MIS) that are commonly used by competitive
organizations include:
1.
Financial Management Information System: Used to manage the financial information
of an organization or business, such as recording of transactions, payment of employee
salaries, and financial reports.
2.
Human Resource Management Information System: Used to manage information about
employees, such as personal data, work history, attendance, and employee performance.
3.
Production Management Information System: Used to manage information related to
MANAGEMENT INFORMATION
SYSTEM
12
the production of goods or services.
4.
Marketing Management Information System: Used to manage information about
marketing and sales, such as contact data, transaction history, and customer preferences.
5.
Logistics Management Information System: Used to manage information about product
storage, distribution, and delivery, such as delivery routes, delivery schedules, and
shipment monitoring.
B. IMPROVED OPERATIONAL EFFICIENCY:
In the modern era, the need for information systems in every organization is a
necessity, especially to improve the smooth flow of information traffic, cohesiveness and
quality of solid teamwork including with other parties. Management information systems
that integrate or improve linkages between systems are also an unavoidable need.
Companies will more easily integrate business data with management information
systems, improve the quality of information available, provide management control and
increase the speed of business data analysis so that management can focus more on strategic,
creative, and innovative aspects to improve the quality of company products and services,
and shorten the production or service process cycle. MIS and the development of
technological advances surrounding it have driven a remarkable transformation phenomenon
in the field of management and business (Bratha, 2021).
MIS has become something that is found in every organization because it facilitates
the implementation of the work process of an organization to function better as expected
(Baharuddin, A. A., Musa, M. I., 2022). MIS is basically a series of interrelated elements
forming a unit that integrates, collects, stores, and processes and presents data so that it can
be used in making management decisions (Kaleb, Bryan, Lengkong, Taroreh, 2019). This
does not only apply to business but also to government agencies (Samsudin, 2021).
The main purpose of MIS is to collect, store, process data and then become
information. This requires the support of hardware, software, and most importantly
brainware capabilities (Aswiputri, 2022). Indicators of the success of information produced
by MIS include: (1) Accurate, the information presented must be completely accurate; (2)
Timely, information must be delivered on time as needed; (3) Complete, the information
produced must be complete and users must get information that comprehensively provides a
complete picture of the specific problem of concern (Sholeh, & Wahyudin, 2021).
MANAGEMENT INFORMATION
SYSTEM
13
MIS consists of various important components that synergistically interact,
interrelate, and support each other, namely input, process, output, database, hardware,
software, and personnel. MIS provides important functions that assist management in
managing business data in order to improve efficiency in operations, improve the quality of
the decision-making process, improve coordination and collaboration, improve the quality of
products and services, and in order to reduce business risks (Laia, Halawa and Lahagu,
2022).
Improving efficiency and effectiveness in service delivery is an integral part of the
effort to provide the best service to every customer. MIS implementation is useful if it is
carried out in accordance with the vision, mission, and goals of the organization by
implementing the right business strategy and MIS implementation strategy according to the
internal and external conditions of the organization. The use of technology in an
organization requires an analytical design to optimize the role of the technology. MIS
Design The one that is most aligned with the needs of the organization should be chosen.
Later, the effectiveness of MIS must be evaluated again in accordance with the goals, vision,
and mission of the organization (Nadeak, 2020).
The operational efficiency of an organization can be improved through effective
management, reduced operational costs, and increased employee productivity. MIS plays an
important role in improving the operational efficiency of the organization because it helps
manage information relevant to the organization so that management is able to carry out the
decision-making process accurately and effectively (Juhji, 2020).
In the implementation of a driver's license there are potential social and ethical issues
that need to be considered. Social issues in information systems include issues such as
privacy, security and accessibility. Unethical implementation of a driver's license may
violate the privacy of individuals and may result in misuse of personal data. Security of the
MIS is also very important as possible cyber-attacks can threaten data integrity and privacy.
Accessibility is important to manage as not everyone is authorized to have the same access
to the MIS for the security of the system itself.
Ethical issues in MIS include issues such as honesty, integrity, and accountability.
Unethical use of MIS can compromise the integrity of the organization and can cause
financial and reputational damage to the organization. Aspects Liability is very important
because irresponsible use of MIS can harm other parties and potentially become a legal
MANAGEMENT INFORMATION
SYSTEM
14
liability.
Important attention should be paid to the social and ethical aspects of MIS implementation.
Organizations should pay attention to the social impact of MIS implementation.
Organizations must consider the ethics of using data and information managed by MIS and
must always ensure that the data and information are used ethically (Yulianto, Utaminingsih,
Sari, 2023).
The implementation of MIS goes a long way in automating routine tasks, speeding
up data processing, and ensuring seamless integration between various sections. MIS
enables automation of routine tasks using technologies such as artificial intelligence (AI)
that can automate routine and repetitive tasks, allowing management to focus more on
activities that require creativity, innovation, and complex strategic thinking.
It supports fast data processing by using real-time data processing techniques that are
capable of providing quick responses. Good integration between different sections can also
be achieved through MIS as it allows different sections in an organization to connect with
each other and share data information efficiently so as to enable better coordination and
cooperation between these sections.
The implementation of MIS helps businesses save time, money, and resources, and
increase employee productivity. Some strategies that can help improve employee
productivity include the division of tasks, and roles of responsibility by taking into account
their respective skills and interests, creating effective two-way communication, creating a
comfortable work environment, and implementing systematic time management (Adisel and
Thadi, 2020).
MIS plays a very important role in the decision-making process and problem solving
by utilizing data and information that is accurate, timely, relevant to the problem at hand,
comprehensive and more efficient than manually. It also supports automation of routine
tasks and fast data processing, which can increase employee productivity. Good integration
between various sections can also be achieved with MIS so that the management of the
organization can focus more on highly strategic aspects.
C. BETTER DECISION-MAKING:
A defining MIS can help management, for example, in making decisions, planning,
MANAGEMENT INFORMATION
SYSTEM
15
and managing employees, and improve the achievement of employee performance goals
(Wijoyo, 2021).
In general, there are four styles of decision making carried out by individuals based
on aspects of thinking methods and aspects of information processing. Individuals who
process information sequentially are logical and rational individuals (Santosa and Devi,
2021). Individuals who see things as a whole include intuitive and creative individuals. The
combination of these two extreme aspects will form four decision-making styles, namely
command, analytical, conceptual, and behavioral styles (Bahri and Arafah, 2020).
The implementation of MIS to support the objective decision-making process in an
organization requires key elements such as:
1.
Hardware, which is computer hardware with appropriate and adequate specifications and
quality to perform data processing.
2.
Software, which is a computer program designed to be able to receive instructions from
the programmer in carrying out a certain job.
3.
Brainware, namely professional managers who already have expertise or skills that are
aligned with the field of management and information systems.
The success of decision-making, which is the core of the administrative process, is
largely dependent on the information available and also depends on the functions within the
process. For example, if management objectives are not understood or are not sufficiently
clear, possibly due to the absence of comprehensive information, then there is no basis for
conducting studies for decision-making. Without information obtained through an intensive
study, there will be no feasible alternatives to compare, and without comparing feasible
alternatives, decision-making in the form of selecting a particular course of action will not
be able to produce the expected results (Wijoyo et al., 2023).
In general, there are several main activities in MIS, namely:
1.
Information gathering: Information is collected in a number of ways including
automatically obtained (formal sources), recurring information (e.g. commercial
transaction data) and from certain unplanned processes (informal sources) or non-
recurring information (data for specific purposes such as strategic decisions).
2.
Information Processing: Data is transformed into information through various stages
including combining in various ways, editing, and then comparing for interpretation, or
sorting based on certain rules to get a picture according to user needs.
3.
Information storage: Storage of information and/or structured data is done while
maintaining quality and integrity through a process of continuous correction and
updating.
4.
Presentation and dissemination of information: The information generated will be
presented in various forms and formats such as messages, reports, lists, graphs,
inforgraphics, or other forms. This information is disseminated via email, internet,
intranet, and various other information dissemination media (Dachyar, 2022).
With MIS, organizations can respond faster to market changes, identify business
opportunities, and manage risks more effectively. Here are some of the ways MIS helps
achieve these goals:
1.
Collect, analyze, and present data in real time: MIS enables an organization's
management to make informed decisions by collecting, analyzing, and presenting data in
real time. This enables organizations to respond more quickly to market changes and
identify business opportunities.
2.
Transforms input data into information that can be used for decision-making: MIS uses
technologies such as machine learning and artificial intelligence to convert input data
streams into information that can be used for decision-making. This information can help
organizations identify business opportunities and manage risks.
3.
Easy access to data: MIS provides easy access to data that is provided accurately and in
real-time. This enables the organization's management to monitor and analyze data
regularly, quickly and effectively.
4.
Anticipate and understand opportunities in business and the economy: MIS implements
technologies that can help organizations to quickly predict and understand potential
economic and business opportunities. This information can help organizations identify
business opportunities and make better decisions immediately.
5.
Facilitate human resource management: MIS can help ensure quality and expertise in
human resource management by using an objective system. This enables organizations to
manage human resource risks more effectively.
MIS is thus critical for organizations to respond more quickly to market changes, to
identify business opportunities and manage risks more effectively.
D. INNOVATIVE STRATEGY DEVELOPMENT:
The rapid advancement of information and communication technology makes
companies always try to develop their strategies in order to achieve excellence and not be
left behind by their competitors. In the field of strategic management, the resource-based
view (RBV) is a theory that allows a company to achieve competitive advantage by utilizing
resources as optimally as possible so that it can continuously make the company always
develop better. There are three types of information systems that companies generally
develop, namely financial systems, operational systems, and strategic systems (Breemer and
Nurdin, 2020).
Many problems occur because of the company's inability to link strategy with the
goals it wants to achieve through operational and financial activities. In the beginning,
information systems were considered as part of the data processing of a company and were
considered only one small component for the running of the company. Information systems
will directly increase the competitive advantage of a company if the system is integrated
with good resources and business processes that link the company's strategy with operational
and financial activities that achieve goals. A good financial and operational system can also
be a strategic system for the company (Jusuf, 2019).
Strategic information systems are systems that support or build a company's
competitive strategy. A strategic information system is an information system that can be
used to gain a competitive advantage. This information system helps make changes to
processes, products, or relationships between parts to help organizations achieve competitive
advantage. Resource-based View (RBV) theory is a commonly used explanation to explain
the relationship between strategic investment in information technology and corporate
profits (Dachyar, 2022).
MIS plays a critical role in supporting innovation and organizational strategy
development. It enables a company to determine its internal strengths and weaknesses, set
long-term goals, develop strategic alternatives, and select specific options to be used. It also
enables quick and accurate information exchange between departments, which supports
strategy development and implementation within the organization. MIS helps organizations
to be able to respond faster to market changes, win business opportunities, manage them
more effectively, and innovate by improving services, processes, paradigms, and positions to
achieve sustainable profits. Therefore, MIS plays a central role in strategy and innovation
development in organizations (Muharik and Ikasari, 2023).
MIS can assist organizations in preparing for the development of innovation within
the organization (O'Brien and Marakas, 2021) through the following activities:
1.
Identifying Market Trends, MIS allows organizations to collect and analyze data from
various sources, such as social media, websites, and sales transactions, to identify trends
and changes in the market. This information can help organizations monitor the
development of products or services that meet market needs.
2.
Collecting Customer Feedback, MIS enables organizations to collect customer feedback
through various methods, such as surveys, product reviews, and social media interactions.
This feedback can help organizations understand customer needs, expectations, responses
and concerns, and monitor the performance of the products or services offered.
3.
Tracking Competitor Performance, MIS enables organizations to track competitor
performance by gathering information on marketing strategies, sales, and product or
service innovations that competitors offer. By conducting competitive analysis, an
organization can understand the strengths and weaknesses of its competitors and identify
opportunities to improve its market position in the face of competition.
Competitive advantage gives organizations the ability to achieve and maintain a
better position in the market. By having an advantage that is difficult for competitors to
imitate, organizations can win the competition, maintain a strong market share, and achieve
sustainable growth. It is important to note that competitive advantage is not something fixed
and eternal. In a dynamic business environment, competitors are always looking for ways to
imitate or surpass the advantages of other organizations. Therefore, the organization must
constantly adapt and innovate to maintain and renew its competitive advantage.
There are common strategies used to achieve competitive advantage (Chaffey and Ellis-
Chadwick, 2020), including:
1.
Low-cost strategy: Organizations can gain competitive advantage by being the lowest-
cost producer or service provider or at least lower than its competitors. This allows the
organization to offer lower prices to customers, while maintaining a good profit margin.
2.
Product differentiation: An organization can create a competitive advantage by producing
products or services that are unique or have better characteristics and quality than its
competitors. Differentiation may include product design, quality, branding, or
exceptional customer service.
3.
Focus on a specific market segment niche: Organizations may choose to focus on a
specific market segment niche, either based on geography, demographics, or specific
needs. By properly understanding the needs and wants of customers in these areas,
organizations can develop a competitive advantage to cater to specific needs.
4.
Innovation: Organizations that continuously generate innovation can create significant
competitive advantage. Innovations can be in the form of new product development, new
technology inventions or business process improvements that result in efficiencies that
allow for greater profit margins.
In order for an organization to identify and maintain a competitive advantage, it is
imperative to continuously analyze the market, competitors, and customer needs. This
includes a deep understanding of the market, investment in research and development,
effective operational management, and the ability to adapt quickly to changes in the business
environment. Or improve business processes that provide higher profits (Puti, 2023).
Therefore, using the information obtained from MIS, organizations can design
innovative strategies, tailor products or services to market needs, and create a sustainable
competitive advantage. MIS enables organizations to collect market data, customer
feedback, and information on competitor performance. This information enables
organizations to identify market trends, understand customer needs, and track competitor
performance. All of these are key elements in designing innovative strategies and
customizing your products or services to market needs. Therefore, MIS plays an important
role in helping organizations achieve sustainable competitive advantage through innovation
that increases competitiveness (O'Brien and Marakas, 2021).
DEVELOPMENT AND EVOLUTION OF INFORMATION SYSTEMS
A. INTRODUCTION TO THE DEVELOPMENT OF INFORMATION SYSTEMS:
Today, we live in the information age, where information has a lot of value and
commercial because it can exchange information into valuable goods. information systems
are made to help in daily work both for individuals and for organizations. An information
system is a set of components that collects, manipulates, stores and processes data into
information and presents a feedback mechanism to get good decision making. Computers
and information systems will continue to change business and the way people live.
Therefore, it is necessary to understand the basic concepts of information systems.
The information system used can be manual or computerized. A computerized-based
information system is a set of physical devices (hardware), non-physical devices (software),
databases, telecommunications networks, people and procedures configured to collect,
manipulate, store and process data into information. Companies connect their computer-
based information systems to be able to produce products and services. Components in
computerized information systems refer to information technology infrastructure (physical
devices, non-physical devices, databases and telecommunications networks), people and
procedures. This information technology infrastructure is a set of information system
resources that are the foundation of computer-based information systems.
In the evolutionary development of information systems, the computers used in the
use of information systems are very large mainframe computers, which are currently known
as personal computers. The physical device of the computer is controlled by the operating
system. Then, application systems (application software) are used to support user work such
as processing documents in word processing, processing calculations in spreadsheets,
managing data in databases and so on.
B. EVOLUTION IN COMPUTER PHYSICAL DEVICES:
Physical devices are computer devices used for input, processing, and output
activities. Where, this input device includes a keyboard, computer mouse, scanning device
and other devices that support the process of converting data and information. Then, devices
for processing include computer chips that contain centralized processing units and main
memory where the progress of the design of chips computers allow for faster speeds, less
power consumption, and more storage capacity, which means that computers can work more
efficiently. Many types of output devices include printers and computer screens. Some
touch-sensitive computer screens, for example, can be used to execute complete functions or
programs, such as connecting to the Internet or running a new computer game or word
processing application. Many special purpose physical devices have also been developed.
Computerized data recorders (EDRs) are now placed in vehicles. Like an airplane black box,
EDRs record vehicle speed, possible engine problems, driver performance, and so on. While
all types of personal computers have their advantages and disadvantages, many people favor
the mobility, functionality, and cost associated with tablet computers.
The most important thing in a computer is the processor, which is controlled by the
operating system such as windows, linux, macOS, which is used to manage input and output
devices, data storage devices and data operations. The central processing unit (CPU)
controls all the components. Random access memory (RAM) acts as a temporary workspace
for the CPU, where the wider and more comfortable the workspace, the CPU is able to work
optimally. The CPU and RAM are stored on the main board of the computer (The
motherboard is where all the physical components of the computer are connected, such as
CD-ROMs, USB flash drives, hard disks.
C. EVOLUTION IN INFORMATION TECHNOLOGY NETWORKS:
Telecommunication networks are electronic transmissions of signals to communicate
that help organizations to support the company's operational processes and work tasks
through effective networks. Telecommunication networks use wired, wireless and satellite
transmission. Today, telecommunication networks are used by people and organizations
with different needs. With telecommunication networks, individuals can work from home or
while traveling, this condition is referred to as telework. Telecommunication networks also
enable virtual meetings for individuals who are working on a team project together without
having to meet face-to-face.
Networks connect computers and devices within a building across regions, countries
or continents. Wireless transmission networks can be used by mobile phones, laptops or
tablets. The internet network is the largest network in the world, so it is known as the world
area network (WAN) which connects all information in the world without thinking about
regional boundaries. Then, besides WAN, there are also LAN (Local Area Network)
network where this network is used in one particular entity with the aim of securing data.
The development of telecommunication networks can be seen from the technology used.
The first time the internet network was introduced in the form of WCDMA with a downlink
strength of around 384kbps and 128kbps for uplink. Then, HSDPA/HSUPA technology was
introduced with a downlink strength of around 14Mpbs and 5.7Mbps for uplink. Next,
HSPA+ with a downlink strength of about 28Mbps and 11Mbps for uplink. Then, LTE (4G)
with a downlink strength of around 100Mbps and 50 Mbps for uplink. And now we are in
the 5G era with a downlink strength of around 10Gbps and 1Gbps for uplink where
everything is already internet-based (internet of things), automation of activities, and others.
D. EVOLUTION IN NON-PHYSICAL COMPUTER APPLICATIONS OR DEVICES:
Non-physical devices consist of computer programs that govern the operation of the
computer. There are two main types of non-physical devices. System non-physical devices,
such as Microsoft Windows, MacOS that coordinate basic computer operations such as start-
up, control access to system resources, and manage computer memory and files.
Non-physical application devices, such as Microsoft Excel, that are used to perform
tasks in editing text documents, creating graphics. Both system non-physical devices and
application non-physical devices are required for all types of computers, from small
handheld computers to large supercomputers.
The evolution of applications as non-physical devices began with the classification
of application systems. There are two types of application systems as enterprise resources.
Physical systems that consist of tangible resources-such as materials, personnel, machines
and money. Then, virtual systems consisting of information resources that represent physical
systems. For example, an inventory storage area, where inventory items are included in the
physical system and the inventory master-file on the computer is included in the virtual
world system that represents the physical system.
Then, the physical system of a company is an open system that interacts with the
company's environment, which means that the flow of the company's physical resources
occurs. Information systems are also included in open systems. Then what is a closed
system? A closed system is one that is not used to communicate with the environment. The
actual closed system will not interact with consumers, managers or other parts that do not
have authority in the use of the system.
E. EVOLVEMENT IN THE DATABASE:
A database is an organized collection of facts and information, usually consisting: of
two or more related data files. An organization's database can contain facts and information
about customers, employees, inventory, sales competitors, online purchases, and much
more.
The database that is built must have its estimated volume calculated. From the
estimated volume, the entity can at least determine the hard drive capacity required and the
type of processor suitable for handling the estimated amount of data. From the volume
estimate you can also determine the database management system (DBMS) which is
suitable. Many information technology experts categorize this DBMS based on its capacity
into two groups, namely DBMS for small to medium classes and for large classes. So
databases need to evolve for the development of information systems.
DBMS for small and medium classes, for example Clipper, Visual Basic, Visual
FoxPro, Delphi, Power Builder and others. While DBMS for large (heavy) classes, for
example Oracle, Sybase IQ, Teradata, Daytona, DB2, SQL Server 2000, Informik, Ingres,
SQL for window and others.
There are several types of DBMS required by a company, namely mid-range DMBS
generally capable of handling data up to 2 Giga Bytes (GB) or one billion records. If for
example a rough calculation of one record of master data such as inventory, employees,
customers and others is 200 characters and transaction data such as date, No, User Id,
Location, Terminal code, Item code (average of 20 items of goods), units purchased and
others are 100 characters then approximately the DBMS can handle 10 million Master data
(2GB: 200) or 20 million transaction data.
It can be taken as an example, for example, a large-scale retail trading company, say
a hyper mall and the company uses 40 points of sales (POS) to handle transactions with an
accounting period of one year and all sales are made in cash, then you can calculate how
many transactions the POS can handle per minute by dividing 20 million by 365 (days), by
14 (working hours), by 60 (hours/minute). The result is 1.65. This means that small and
medium scale DBMS can still handle more than one transaction per minute for companies
that have hundreds of branches, 40 POS per branch with an average number of items
purchased of 20 items. So, the company just needs to determine whether the company's
master data is more than 20 million or less, if more you have to use a large-class DBMS.
Does each terminal in hundreds of branches and 40 POS on average make more than one
transaction every minute or 40,000 MISultaneously throughout the branch. If more then
your application (Front End) can use a large-scale DBMS as a back End with a client-server
concept.
New generation 32/64 bit large-scale DBMS can handle data up to hundreds of tera
bytes (TB) such as Oracle 10g, SQL Server Yukon and others. The 2003 record according to
a survey conducted by Winter Corporation worldwide shows the largest database usage with
various operating systems is held by Oracle (29,232 TB) at the France Telecom company,
while the largest size of on-line data processing results is held by DB2 (18,301 TB) for the
Land Registry company and the most data processing per second (busiest) for window-based
applications is held by Sql-Server (4010 transactions per second) at the Anonymous
company.
The database used (its content and relationships) must also meet the needs of the
user. Determining the needs of the data in the database for users is done by first determining
the information required. Based on the information needs
Based on these two things, it can be seen what data must be entered and how the
relationship between the data entered so that the information is easy to access. Based on
these two things, it can be seen what data must be entered and how the relationship between
the data entered so that the information is easy to access.
The database used must also be suitable or supported by suitable procedures. As you
know, the quality of the information produced is highly dependent on the quality of the data
used entered. If the data entered is accurate, relevant, timely and complete, the information
will also be accurate, timely, relevant and complete. In order for the data stored in the
database to be accurate, relevant, timely and complete, it must be supported by procedures to
ensure that the data entered meets the expected criteria.
F. INFORMATION SYSTEM USERS:
The first user of information systems in companies is the accounting department,
because some important information such as information about the production of goods is
usually recorded first by accounting applications that will be accessed and used by company
managers. When a company uses a management information system, the company uses tools
to help facilitate the company's work and decision making. The system is built specifically
to support decision making.
Because the manager is an individual, it is the manager who needs to adapt as a form
of evolution to the development of information systems because the manager most needs the
output of information systems, namely information that is very varied in nature. Thus, the
manager needs to build an appropriate framework to be able to use information as a tool in
making good decisions.
In addition to decision making, managers need to use information systems to support in
solving problems in the company.
The problem-solving process has several phases, as follows:
1)
Intelligence activities, which seek information about the company's environmental
conditions to find solutions for improvement
2)
Activities Design, where discover, build and analyze possible actions that need to be
selected
3)
Selection activity, which determines the most appropriate action to be able to solve the
problem
4)
Analysis activity, analyzing the action options that have been taken
G. INFORMATION SYSTEM PROCEDURES:
Procedures define the steps that must be followed to achieve a specific end result
such as entering a customer order, paying a supplier invoice, or requesting a flow of
inventory report. Good procedures describe how to achieve the desired goals the company
produces; who does what and when; and what to do if something goes wrong. When people
are well-trained and follow effective procedures, they can get the job done faster, cut costs,
utilize human resources with less effort, and get the job done better, and enable the
individual to adapt to change. When procedures are well documented, they can greatly
reduce training costs and shorten the learning curve.
The evolution of information system procedures usually refers to the approach to
business processes and operational activities that occur in the company.
