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Types of management information systems

Updated April 17, 2017

A management information system (MIS) is a computer-based system that provides the information necessary to manage an organisation effectively. An MIS should be designed to enhance communication among employees, provide an objective system for recording information and support the organisation's strategic goals and direction.

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Transaction-Processing Systems

Transaction-processing systems are designed to handle a large volume of routine, recurring transactions. They were first introduced in the 1960s with the advent of mainframe computers. Transaction-processing systems are used widely today. Banks use them to record deposits and payments into accounts. Supermarkets use them to record sales and track inventory. Managers often use these systems to deal with such tasks as payroll, customer billing and payments to suppliers.

Operations Information Systems

Operations information systems were introduced after transaction-processing systems. An operations information system gathers comprehensive data, organises it and summarises it in a form that is useful for managers. These types of systems access data from a transaction-processing system and organise it into a usable form. Managers use operations information systems to obtain sales, inventory, accounting and other performance-related information.

Decision Support Systems (DSS)

A DSS is an interactive computer system that can be used by managers without help from computer specialists. A DSS provides managers with the necessary information to make informed decisions. A DSS has three fundamental components: database management system (DBMS), which stores large amounts of data relevant to problems the DSS has been designed to tackle; model-based management system (MBMS), which transforms data from the DBMS into information that is useful in decision-making; and dialogue generation and management system (DGMS), which provides a user-friendly interface between the system and the managers who do not have extensive computer training.

Expert Systems and Artificial Intelligence

Expert systems and artificial intelligence use human knowledge captured in a computer to solve problems that ordinarily need human expertise. Mimicking human expertise and intelligence requires the computer to do the following: recognise, formulate and solve a problem; explain solutions; and learn from experience. These systems explain the logic of their advice to the user; hence, in addition to solving problems they also can serve as a teacher. They use flexible thinking processes and can accommodate new knowledge.


A potential problem with relying on electronic communication and processing of information is the loss of the vital human element. Sometimes, because of the complexity of information, an MIS report cannot effectively summarise it. Very rich information is needed to coordinate and run an enterprise, and certain classes of information cannot be quantified. For example, it might be wrong to evaluate an employee's performance solely based on numbers generated by an MIS. Numbers can indicate a performance problem, but a face-to-face meeting is necessary to discuss the nature of the problem.

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About the Author

Alfred Sarkissian holds a master’s degree in industrial management. With experience in business and public policy, he has covered intellectual property rights, industrial policy and technology policy for various publications.

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