Management Information and Computers

     Data are numerical or verbal descriptions, whereas information is data presented in a form that is useful for a specific purpose. Generally, information is more effectively used when it is organized into a database. A database is a single collection of data that are stored in one place and can be used by people throughout the organization to make decisions.

     Today, business, government, and other organizations depend on computers to process data and to make information available for decision making A computer is an electronic machine that can accept, store, manipulate, and transmit data in accordance with a set of specific instructions. Although computers are a relatively recent invention, we have already seen five generations of computers. Currently, firms can choose mainframe computers, minicomputers, or microcomputers to match their information needs. Each of these machines consists of at least one input unit, a memory, a control unit, an arithmetic&-logic unit, and an output unit. Today, the largest mainframe computers are called supercomputers, whereas the smallest microcomputers are referred to as laptops or notebooks. Firms can also establish a computer network a system in which several computers can either function individually or communicate with each other.

     Computers require software, or programs, which are operating instructions. Software may be either custom or ready&-made. Today, software has been developed to satisfy almost every business need. Database management programs can store and transform data into information. Data contained in a database program can also be sorted by selected criteria Graphics programs make it possible to display in graph form data and conclusions. Spreadsheets are software packages that allow users to organize data into a grid of rows and columns. Spreadsheets allow managers to answer "what if" questions by changing data to match new assumptions. Word processing programs allow users to store documents in the computer's memory or on a disk. Once entered, the material can be revised, edited, deleted, printed, or simply used at a later date. Most experts predict that in the future computers will affect every aspect of human life. Specific trends that will affect business include the increase in available information, the use of automation, and the need for employees that know how to use a computer.

     A management information system (MIS) is a means of providing managers with the information they need to perform management functions as effectively as possible. The data that are entered into the system must be relevant, accurate, and timely. The information provided by the system must be all of these&-and it must be in usable form as well. Managers in different areas of a business generally require information pertaining to their own areas. The management information system itself should match the firm it serves in capacity and complexity.

     The four functions performed by an MIS are collecting data, storing and updating data, processing data, and presenting information. Data may be collected from such internal sources as accounting documents and other financial records, conferences and meetings, and sales and production records. External sources include customers, suppliers, bankers, publications, and information&-gathering organizations.

     With a computer, data can be stored on magnetic tapes and disks and used whenever they are needed. Data should be updated regularly to maintain their timeliness and accuracy. Updating can be accomplished manually or via computer.

     Data processing is the MIS function that transforms stored data into a form that is useful for a specific purpose. Large groups of numerical data are usually processed into summary numbers called statistics. The arithmetic mean, median, and mode are measures of the sizes of values in a set of data. The range is a measure of the dispersion, or spread, of the data values. Although statistics can provide information in a manageable form, the user is responsible for correctly interpreting statistics.

     Finally, the processed data (which can now be called information) must be presented for use. Verbal information is generally presented in list or paragraph form. Typically, the components of a business report are the introduction, the body of the report, the conclusions, and the recommendations. Numerical information is most often displayed in graphs and charts or tables.