In our groups previous blog posts, we have mainly discussed the benefits of using information systems (IS) for decision-making. In this blog post, I would like to discuss the problems in implementing management information systems for an organisation looking to help decision-making. The main problems facing a firm when implementing MIS is expense, maintenance, ineffectiveness and employee training.
Attempting to install a management information system can prove to be very expensive for a company. Although the manufacture of MIS is not as expensive as it once was- due to the falling price of manufacturing costs, and cheaper parts- it can still represent a significant expense, especially for larger companies. This not only increases labour costs, but also training, as well as ongoing support and upgrades to stay ahead of the competition. The cost of this review followed by the installation costs can be extremely expensive for large companies. Once information has been provided through the MIS, decisions can be made regarding the effectiveness of business operations.
This point ties into the previous point, as to consistently maintain an information system requires lots of time and money, which leads organisations to be left with the decisions of how best to maintain these IS. Companies are forced to hire maintenance individuals. This will not only increase labour costs, but also requires additional training and ongoing education for these individuals. Business technology can change frequently, creating an environment where companies must have trained individuals who can properly maintain computers, websites, servers and other equipment to be used by the management information system.
Management information systems also have the problem of possibly becoming ineffective in a companies operations. It is vital to note that with all computer systems, an MIS is only as good as its programmer. Collecting non-vital or insignificant information can delay management decision-making because managers have to request additional information. Spending too much time and resources reprogramming or correcting issues can also increase the time spent in the decision making process, which proves how vital it is to hire competent maintenance experts. The fact that extensive training is also needed on new systems will create a steep learning curve which will hopefully diminish over time.
Another major problem with a MIS, is that once it is installed, it may prove to be inflexible. Making changes quickly to reflect fluctuating business operations may not be possible depending on the MIS style and flexibility, which is another important decision that an organisation faces, how flexible and what style should an IS be? While correcting policies such as internal controls or operating procedures may be easy, company-wide changes such as service changes, production enhancements or marketing strategy may not be simple. Major changes to the business will require major changes to the IS, which will result in increased costs and downtime of information reporting.
To conclude, the MIS is designed to provide information to an organization, so that decisions can be made regarding a firm. The biggest flaw a MIS can have is pulling incorrect or inadequate information. This problem results in wasted time and money for the company, leading to another review of the MIS to correct the information flaws.