The Evolution of Management Information Systems and Where To Next

From small businesses to large corporations, a management information system (MIS) is the backbone to a company’s operation. Over the years, the role of MIS has evolved as technology became more sophisticated. Here’s the fascinating history of MIS and how it is currently changing.

The Evolution of Management Information Systems (MIS)

A management information system (MIS) is a computer system that gathers data from multiple business systems, analyzes the information, and provides reports that help guide management in decision-making. 

MIS started as a data capturing and processing system and evolved into a more complex and intelligent system. Here’s how MIS evolved through the years. 

1950-1960: Electronic Data Processing (EDP)

Electronic Data Processing (EDP) systems, also called Transaction Processing Systems (TPS), were groundbreaking at the time. It was the first large-scale computer information system to centralize and process day-to-day transactions and activities such as cash deposits, ATM transactions, and payment orders. Shifting from manual to electronic made transaction processing and record-keeping a much faster process. 

1960-1970: Management Information Systems (MIS)

It wasn’t long before the EDP system was upgraded to a Management Information System (MIS) that was able to generate reports from the data it collected. MIS pulled reports from historical data to determine cost trends, do a sales analysis, keep track of inventory, and measure production performance. 

When managers evaluated the information in these reports, they could see which areas of the business were underperforming and adjust decisions accordingly. 

1970-1980: Decision Support Systems (DSS)

Decision Support System (DSS) provided historical and ad hoc reports on both internal and external information. For example, internal sales reports and external market pricing. 

This advancement brought a new level of decision-making to businesses. Management could more accurately forecast sales, perform a risk analysis, and make bolder strategic decisions. 

It was during this era that personal computers entered the workplace. PCs were connected to the main server so information became accessible to employees throughout the company. This led to a significant boost in productivity.

With this came the need for expert skills to manage these computer networks. Information technology (IT) soon became a burgeoning career and a degree in Management Information Systems became sought after. 

1980-1990: Executive Information Systems (EIS)

As PCs put power in the hands of executives, they could purchase software tailored to their department’s needs, such as accounting, project management, and HR systems. It resulted in multiple systems within an organization working independently. 

This led to Executive Information Systems (EIS), a more refined version of the DSS system. It allowed executives to analyze their department’s output and how it impacted the business’s overall performance. 

1990-2000: Enterprise Resource Management (ERP) Systems 

Multiple information systems that were not integrated resulted in employees wasting time duplicating information across systems. MIS had to become efficient. 

It did that by creating Enterprise Resource Management (ERP) systems that integrated knowledge management systems and expert systems. 

  • Knowledge-based systems were used to organize and disseminate business knowledge within an organization. Example: placing a best practices resource on the intranet.
  • Expert systems started to use artificial intelligence to provide advice and solutions. Example: proposing faster delivery routes or assessing risk profiles for credit applications. 

For the first time, different systems were “talking” to each other.

How Is MIS Changing?

MIS systems are becoming more intelligent. Most of the trends below are not new but they will continue to shape how management information systems function in the future.  

1. Automation and cross-functional integration

Automation can be used for repetitive tasks and to cross-populate data with other systems. This frees up employees’ time to focus on higher-value tasks. For example, automation can track inventory and alert you when stocks are low or automatically reorder stocks when needed without human intervention. 

2. Big data analytics

Worldwide, around 2.5 quintillion bytes of data are being generated daily. That’s a ton of data and a lot of it is harvested by businesses. From customers’ buying habits to social media interactions, data is rolling in from everywhere. 

Management information systems not only have to cope with the influx of data, but also analyze it. The information gleaned can be used to make operations more efficient, improve customer service, and create personalized marketing campaigns.

3. Artificial intelligence (AI)

Artificial intelligence is making waves across almost every sector. AI has been the biggest disruptor in business in recent years. From chatbots to self-driving cars, AI is already a part of our lives and will continue to become more entrenched.

AI technology is capable of learning patterns and identifying anomalies when processing big data. It can be used to detect fraud and determine the risk profile of applicants applying for credit. 

4. Cyber security 

Cybercrime is a threat every business faces. Most cyber attacks are financially motivated but some want to access or steal information to gain a competitive edge. 

A cyber attack can be a fatal blow to a business. Research by Fundera shows that 60% of small businesses that experience a cyber attack go out of business within six months. Companies now invest heavily in protecting their data. As cybercriminals become more sophisticated, cyber security software will have to stay one step ahead.

Outdated technology can hold your business back. If your business still uses an old management information system, it may be time to upgrade. A more robust MIS can enhance productivity and improve customer service, and that ultimately leads to higher profits.

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