Imperial Journal of Interdisciplinary Research (IJIR) Vol-2, Issue-12, 2016 ISSN: 2454-1362, http://www.onlinejournal.in

The Importance of Management Information System (MIS) and Decision Support System (DSS) in Decision-Making Process

Prasang Aggarwal

Abstract : There are a variety of information MIS and DSS and their role in decision-making systems such as TPS, DAS, KWS, MIS, DSS, ES, process. etc. present today. Each system plays a vital role in the decision-making process in organizations. This 2. Decision-Making Process study focuses on the features of MIS and its subset DSS in the decision-making process and the impact Decision-making process given by (Harris, 2012) is it has on business and in functioning of the defined as "a study of identification and selection organizations. of alternatives on the basis of values and preferences of the decision maker, and to reduce Keywords: Management Information System, uncertainty and doubt enough to allow for a Decision Support System, Decision-making process reasonable choice of alternatives."

The decision-making process can be defined as "a 1. Introduction thinking process, aimed to perceive select better alternatives or solutions available to everyone in a

certain manner; to reach and achieve a goal by Management Information System is a tool of great using some objective criteria." Decision-making importance when it comes to taking decisions in process plays a vital role in effective and efficient organizations. As per Kumar (2006), MIS working of organizations. Herbert A. Simon in comprises Management, Information, and Systems. 1950s proposed a model to understand This is a process which helps the managers take organizational behaviors in a better manner. The effective decisions and plan and initiate the model consists of three different phases: operations within the businesses. Intelligence, Design, and Choice. Intelligence is

the phase where the data and inputs are obtained According to Murdick and Ross (1971), and examined to find the possible problems or “Information is absolutely essential to the survival opportunities. Design phase includes analyzing and of an organization. As organizations grow, the inventing possible courses of action and developing pressure of scale, complexity and an increased rate alternatives. In Choice phase, the best alternative is of change make adequate information processing chosen and implemented from the available capacity inevitable, if effective control, consequent alternatives. upon coordination of individual activities is to be achieved.”

Information Systems are categorized mainly in three types - Transactional Processing Systems (TPS), Management Information Systems (MIS), and Expert Systems. MIS has different subsets like Decision Support System (DSS) and Executive Information Systems. DSS is a higher level computer based system, which helps to make efficient business decisions by analyzing the business data. Within an organization, DSS is used Figure 1 Steps in Simon’s Model (Simon, 1997) by all levels from Top Management to Lower Management for strategic to operational decisions. Simon suggests that “most problem-solving This study will brief you about strategies are based on heuristic or rules of thumb rather than explicit decision rules. This has implications for the design of decision models; they should provide appropriate data and allow decision

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Imperial Journal of Interdisciplinary Research (IJIR) Vol-2, Issue-12, 2016 ISSN: 2454-1362, http://www.onlinejournal.in makers to explore alternatives using their own 3. Management Information System heuristics.” However, his model does not go beyond the choice (MIS) phase. Rubenstein and Haberstroh (1965) proposed a model which includes implementation and Management Information System is a computer feedback from the results of the decision. based information system to support organizational processes. In other words, information system is a support system for an organization. The purpose of Management Information system is to help executives of an organization make decisions that advance the organization's goals. Theoretically, a Management Information System can exist without computers, but it is viable just because of computers.

MIS has been defined in different ways but one of the most apt definitions is "an organizational method of providing past, present and projected information related to internal operations and external intelligence. It supports the planning, control and operation functions of an organization Figure 2 Rubenstein and Haberstroh (1965) by furnishing uniform information in the proper time frame to assist the decision makers" (Waston, The process of decision making mainly consists of 1987). six steps which increases the probability that a high quality, effective decision will result (Certo 1997) Management Information System can include as given in Figure 3. software that helps in decision making, data resources, hardware resources of a system, decision support systems, people management and project management applications, to enable the department run efficiently and effectively and with good productivity. Kumar states that information is the analyzed data and the system is “A set of elements joined together for a common objective.” A simple view of MIS as per Kumar is given below:

Figure 4 Simple View of MIS (Kumar, 2006, 45) 4. Role of MIS in decision-making process

Management Information Systems is a complex ground where a lot of caution needs to be taken by its managers. It is recommended to organizations to ensure that they carefully select the management

Figure 3 The six-step decision-making process who are placed to control the systems. The more (Simon, 1997) cautious a person is the more are the prospects of making no mistake with regards to decision making and other related areas of business (Lingham, 2006). Management Information System is

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Imperial Journal of Interdisciplinary Research (IJIR) Vol-2, Issue-12, 2016 ISSN: 2454-1362, http://www.onlinejournal.in basically the process of collecting, processing, 6. Characteristics of Decision Support storing and transmitting relevant information to support the management operations in any System organizations. Decision Support System has a number of “Too often, managers make bad tactical selections characteristics, which include: because they believe that following recommended decision making practices would take too much • DSS provides support in semi structured and time and demand excessive cash outlays.” unstructured situations. MIS is a well co‐ordinated information system, a • DSS is an effective problem solving system. It database that provides management much needed helps the user explore problem using analytical information to plan and make decisions. According approach with human experience. to Obi (2003), “MIS is useful in the area of • DSS improves the effectiveness of decision decision making as it can monitor by itself making. disturbances in a system, determine a course of • DSS supports the managers and help taking the action and take action to get the system in control.” improved decisions without replacing the MIS also provides support by supplying judgment. information for the investigation, the assessment • DSS can handle large amount of data and is and execution process of decision making. MIS interactive. helps managers in gathering the information and • DSS supports various stages of decision- making a design in an organization to improve making process. productivity and decision making. 7. Role of DSS in decision-making process 5. Decision Support System (DSS)

Decision Support Systems have become popular A Decision Support System is a computer-based because of their capability to fulfill the need of the system used by managers and top management in organizations. It enables managers to take effective an organization intended to make semi structured decisions by adapting a different problem solving and unstructured decisions by extracting the approach. As stated by Raymond 1998, DSS has information. DSS allow the decision maker to more capability and role in decision-making retrieve data and test alternative solutions during process and problem solving than MIS. It helps the process of problem solving. management make decisions by gathering all the

relevant information and reviewing all possible alternatives to provide maximum benefits. DSS has played a vital role when it comes to take important decisions like merger, new product launch, decisions related to acquisitions and expansion in an organization. An advantage of DSS over MIS is seen in providing the information, needed to solve problems for individuals and group managers. Experts believe that MIS is a primary level of decision making whereas DSS is the main part of decision making as it is more about analysis and practice.

Uma (2009) has stated that “Decision Support Figure 5 Simple View of DSS (Kumar, 2006, 45) System is an integrated set of computer tools allowing a decision maker to interact directly with Decision Support System is used for taking a wide computer to retrieve information useful in making variety of decisions, but still the concept applies semi structured and unstructured decisions.” DSS better to some types of decisions than to others. provides quality information (such as accuracy, DSS represent a different approach to information timeliness, relevant, and consistent) making it an system to support a variety of unstructured decision important part in decision-making process. Studies processes rather than finding and automating the show that organizations have well established, well structure. structured, and well controlled processing systems that have implemented the Decision Support System. Managers have been able to develop better

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Imperial Journal of Interdisciplinary Research (IJIR) Vol-2, Issue-12, 2016 ISSN: 2454-1362, http://www.onlinejournal.in working models giving them opportunity to 7. Dr. Şükrü Ada1& Mohsen Ghaffarzadeh2 understand and expand the businesses. These (2015) Decision Making Based On studies show the importance and role of DSS in Management Information decision-making process. Syst e m and D e cision Support System Released 2015. 8. G. A. Gorry & M. S. Scott Morton, “A 8. Conclusion Framework for Management Information Systems,” Sloan Management Review, Based on the findings of this study, MIS helps 13:1, Fall 1971, pp. 55-70. better in understanding the problem and make 9. Kumar, P. K. (2006). Information management act accordingly. However, it cannot System—Decision Making. IndianMBA. help in group decision making and solving the Retrieved October 2, specific needs of people. DSS on the other hand is 2010 from much suitable to solve the specific need of http://www.indianmba.com/Faculty_Colu individual and group decision making. Therefore, mn/FC307/fc307.html. we can conclude that DSS has more role than MIS 10. Lingham, L. (2006). Managing a business/ in decision-making process because of its extended Management information system. All support in solving the problems at all management Experts. levels. DSS focus on decision making and works Retrieved October 2, 2010 from on real time mode whereas MIS focus on http://en.allexperts.com/q/Managing- information and works on online mode. Beside the Business- 1088/management-information- above differences, both MIS and DSS play an system.html. indispensable role in satisfying the user 11. Murdick RG, Ross JE (1971). Information requirements at all levels of management. Systems for Modern Management. New Jersey: Prentice Hall. 12. Nowduri, S., 2011. Management 9. References information systems and business decision making: review, analysis, and 1. A. A. Rubenstein & C. J Haberstroh recommendations. Journal of Management (eds.), Some Theories of Organization, and Marketing Research Released 2011. Richard D. Irwin, Homewood, IL, 1965. 13. P. G. W. Keen & M.S. Scott Morton, 2. Ajayi IA & Omirin FF (2007). The use of Decision Support Systems: An Management Information Systems (MIS) Organizational Perspective, Addison- in Decision-making in South-West wesley, Reading, MA, 1978, pp. 92-93. Nigerian Universities. 14. Raymond McLeod, Jr. (1998). 3. Al-Zhrani, S. (2010). Management Management Information Systems, 6th information systems role in decision- Ed. New Jersey: Prentice Hall. making during crises: 15. Raymond, McLeod, Jr. (1990). Raymond, case study. Journal of Computer Science, Information Systems. New York, 6(11), 1247-1251. Macmillan Publishing Company. 4. Aminu JM (1986). Quality and Stress in 16. Simon, H. (1997). Administrative Nigerian Education. Maiduguri: Northern Behavior: A Study of Decision-Making Nigerian Publishing Company. Processes in Administrative 5. Asefeh A & Ali S, Adeleh AZ (2011). The Organizations, 4th Ed. The Free Press. Role of Management Information System 17. Uma, V.D. (May 13, 2009). Role of (MIS) and Decision Support System Decision Support System for Decision- (DSS) for Manager’s Decision Making Making Process in Global Business Process, International Journal of Business Environment. From ezinearticles.com, and Date Access: 1 Feb.2011. [Online] Management Vol. 6, No. 7; July 2011. Available 6. Demetrius, K. (1996). The role of expert http://ezinearticles.com/?Role-of- systems in improving the management of Decision-Support-System-For-Decision- processes in total quality management Making-Process-in-Global-Business- organizations. SAM Advanced Environment&id=2315787. management Journal. Retrieved October 2, 18. Waston, H.J., Carroll, A. B., & Mann, R. 2010 from I. (1987). Information Systems for http://www.allbusiness.com/management/ Management. Plano, TX: Business 591381-1.html. Publications Inc.

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