Why the MIS is required for the Decision making process?

MIS helps us to know where we stand in terms of our turnover/cost/profit. It helps to know what we have achieved against our projections and thus  helps us to plan accordingly for coming months in order to achieve our target in case we are not on track if yes then to do more than our target.

With reference to Herbert Simon model, Decision-making is a process in which the decision-maker uses to arrive at a decision. He describes the model in three phases:

         I.            Intelligence: raw data collected, processed and examined, Identifies a problem calling for a decision.

        II.            Design: inventing, developing and analyzing the different decision alternatives and testing the feasibility of implementation. Assess the value of the decision outcome.

      III.            Choice: select one alternative as a decision, based on the selection criteria.

In the intelligence phase, the MIS collects the data. The data is scanned, examined, checked and edited. Further, the data is sorted and merged with other data and computations are made, summarized and presented. In this process, the attention of the manager is drawn to all problem situations by highlighting the significant differences between the actual and the expected, the budgeted or the targeted.

In the design phase, the manager develops a model of the problem situation on which he can generate and test the different decision alternatives, he then further moves into phase of selection called as choice.

In the phase of choice, the manager evolves selection criteria such as maximum profit, least cost, minimum wastage, least time taken and highest utility. The criterion is applied to the various decision alternatives and the one which satisfies the most is selected.

In these phases, if the manager fails to reach a decision, he starts the process all over again and again. An ideal MIS is supposed to make a decision for the manager.

Thus, MIS is required in order to collect, process and refine the business scenarios which gives us the area of improvements and to take appropriate decisions.