Management information system: meaning, function, example, and benefits

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Management information system: meaning, function, example, and benefits

Management information system meaning function example and benefits

Management is a source of information including important things to make decisions. Processing and utilization of data will be more maximal if you use a management information system.

In all aspects of life, management needs to be applied. In fact, even in the smallest organization even if individual and family. Especially for more complex organizations such as companies. One of the things that a manager must pay attention is related to the management of activities and data.

Understanding Management Information Systems

Management information systems are often abbreviated as SIMs originating from English namely Management Information System. SIM Understanding is a Planning System for Internal Control in a business consisting of the use of documents, humans, technology, and procedures in management accounting.

The aim is to solve various problems in businesses that include services, product costs, and business strategies. The entire system is used in order to analyze other information systems in the application of operational activities of an organization.

In the academic realm, this term refers a group of information management methods related to support and automation on decision making such as experts, decision support systems, and executive information systems.

Some experts give their opinions related to the understanding of SIM. Among them:

Understanding SIM According to Bodnar and Hopwood

Management Information System is a collection of hardware and software designed to translate data in the form of useful information. (Accounting Information System)

Understanding SIM According to L. Jamers Havery

Management Information System is a logical and rational procedure to do or design a series of components related to each other.

Understanding SIM According to Azhar Susanto

Management information systems are a collection or group of sub-systems or parts or components of any physical and non-physical biak that are interconnected with each other and with regard to sustainable control, evaluation, and improvement.

Understanding SIM According to Ludwig Von Batalanfy

Management Information System is a set of interrelated elements in an inter-relativity between the elements of theSru with the environment.

Management Information System Function

There are many benefits and functions of the management information system. The function of this system is not limited to the management only, but also for the organization as a whole. The reviews will be discussed further below:

  • Increase productivity and savings in terms of costs in the organization
  • Improving the quality of HR due to the work system unit will be more coordinated and systematic
  • Facilitate management in conducting supervision, planning, direction and delegation of performance in all departments that have coordination and relationships.
  • Increase efficiency and the effectiveness of data that is more realtime and accurate.

Examples of management information systems

The form of a management information system will be more easily understood through an example. To be clearer, please refer to the example you can apply in business. Following full:

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1. Executive Support System (ESS)

The above system will help managers to be able to interact with the company environment. Namely by using assistance from graphics and supporters of other communication.

2. Group Decision Support System (GDSS) and Computer-Support Collaborative Work System (CSCWS)

GDSS serves to find solutions to problems for collecting knowledge in groups and not individuals. GDSS usually has a form of questionnaire, consultation, and scenario. Examples of GDSS are e-government.

3. Expert System and Artificial Intelligent (AI)

This information system uses artificial intelligence in analyzing problem solving using the knowledge of experts who have been programmed into it. Examples of ice and AI are mechanical schedule systems.

4. Decision Support System (DSS)

Furthermore, there is an information system that helps managers to make decisions by observing the environment within the company. Examples of DSS are electronic links.

5. Informatic Management System (IMS)

IMS has a function to support the spectrum of assignments within the organization. IMS can also be used in analyzing decision making. Some computerized functions and computerized programs can be put together in IMS.

6. Office Automation System (OAS)

Examples of further information systems are the OAS or Office Automation System. This application has a function to launch communication between the department within the company. The way is to integrate computer servers in each company user. Examples of OAS are via email.

7. Supply Chain Management (SCM)

In the SCM system, the benefits obtained from management are integrating important data such as suppliers of suppliers, manufacturers, to retailers. In fact, to the most end consumers. Usually this system is one with a company bookkeeping system on accounting software.

8. Enterprise Resource Planning (ERP)

Many large companies use the ERP management information system. However, this system can also be used on a small scale. ERP is usually used in management management and conducting integrated supervision among company units.

Benefits of Management Information Systems

SIM has several important benefits in the sustainability of the organization or company. Some of the benefits will be discussed at the points below:

  • Providing information used in calculating the cost of products, services, and other purposes desired by management.
  • Providing information used to plan, control, evaluate, and make sustainable improvements.
  • Provides information in making important decisions.

Management Information System Components

Functional management information system components are elements and components that have relations with data processing, data collection techniques, storage, and information reporting where this system is needed.

In the SIM, there are five components that include:

Administrative and operational system

This system includes several parts of management that conducts routine activities with predetermined procedures. This procedure is in the Personnel, Administration, and so on. This component needs to be carefully monitored because if there is a change, it can be anticipated immediately.

Management Reporting System

The next component is a management reporting system that is a component of management information that includes parts which have the main task of developing performance reports both periodically and routinely.

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Search system

The search system is a component that provides a variety of information needed by the company. The form of search system is not structured but it is important to make decisions.

Database system

This system is a component that has the benefit of storing all data and information about the activities of the company.

Data management

Data management is a component in the information system that provides certainty that the variety of data owned is more accurate, present, safe, and also ready to use.

Data management serves as a liaison between databases with a variety of other information system components. This system uses software that will help get, maintain, control, and process up to access data easier to use.


In particular, the management infomation system has several important benefits and functions in a company. Thus, this system is able to facilitate work and decision making more effectively and efficiently. To support the management information system there must be many reliable personnel and management participation requires in the participation of managers to design the system.

When the entire system that manages information has run well, then the planning and development of your business becomes more measurable. The entire management division will be connected to each other and the information produced gets better and minimal errors.

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