Why Most MIS frameworks are not effective ?

Defects of Most Management Information Systems

Every company has some form of Management Information System (MIS) which provides information for making decisions. Most of information is generated from with in the organization. Reports are generated for different operational parameters like Production, Sales, Cost, Assets, Liabilities , Profits, Rejections, Stocks etc. Further every organization also develops some sort of Checks and Balances System to ensure hygiene of transactions and activities.

However it is generally found that almost every organization and business owner experiences nasty surprises , lost opportunities, frauds and avoidable losses. These losses and surprises originate from Inadequacy of Information Systems prevailing in the organization.

There is lot of Information flow in organization, but this may not include knowledge which is critical for business. Moreover Information often does not come at time thus preventing timely corrective action.  Some of limitations of Information Systems (MIS), are as below:

  1. Information Not Aligned to Business Goals and Strategic objectives :Flow of Information should start identification of Business Goals and Strategic Objectives. This should include information on critical bottlenecks which prevent achievement of these goals. However most of MIS frameworks are Static and not perfectly aligned to Strategy of Organization. This reduces utility of these Information Systems.

2. Macro Environment Factors Information Missing:  Every business is impacted by wide range of environment factors whose impact can be forecasted. This includes factors such as Government Policy Framework, Market Conditions, Technology, Competitors, Exchange Markets, Capital Markets, Crop Patterns, Global indicators etc. Most of organizations do not have formal systems to track and analyse these Macro Environment factors. Due to this deficiency these MIS frameworks serve limited purposes.

  • Too much Information which may not be needed : This is a common flaw in most organizations. There are too many reports , too much information which may not be needed. Information overload is a common problem today and is not desirable.
  • Critical Information not segregated from Non Critical : In order to make Information systems effective , it is essential that Critical Information is segregated from Non Critical Information. Many MIS professionals see Variance Analysis as critical information. This is incorrect. Information System need to identify Critical Information and develop separate reporting pattern for same.
  • Intangible Information Missing: Business is not run only by numbers and figures. Non tangible factors such as customer sentiments, company image, employee creativity, employee sentiment is more critical than mere balance sheet numbers. Most of organizations do not have systems to track and measure these Intangible factors affecting their business.
  • Too many business review tools & methods -: Most businesses have too many review functions like Internal Audit, Management Audit, Cost Audit, Budgeting, Standards etc. This creates lot of analysis and duplication which is not required. Further every audit tool looks at a particular aspect of business and not as an Integral entity linked to wider environment.
  • Imbalance between Formal & Informal Systems : Big organizations depend too much upon Formal Systems. This cripples the vital creativity and dynamism. On other hand small organizations depend too much on Informal Information. A dynamic MIS combines both Formal & Informal Information systems in perfect balance and aligns to strategic objectives of business.
  • Late arrival of Information : Information for incident happened should be available at the earliest. Similarly Information about probability of events likely to happen should come well in advance. However in most of organizations information comes too late which leads to losses and delay in corrective action.
  • Information to wrong person : Most organizations provide information to too many persons who may not need it. Information should go only to person who are involved in taking corrective action.
  • Incorrect Form of Information : Most of information system rely on information in form of Excel Sheets, Text Reports or PPT Presentations. Information is also circulated mostly by Emails. This is not Action Friendly way of providing Information. Best form of information is in form of brief SMS Texts or Social Media Groups. Reports should only be provided wherever essential.

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