Page 214 - Business Principles and Management

Chapter 8 • Technology and Information Management

into their computers, the data become part of the company’s database. A database
is a collection of data organized in a way that makes the data easy to find, update,
and manage.
But a collection of data is not useful until it is processed into a form that deci-
sion makers can use. A computer system that processes data into meaningful infor-
mation is called an information system. Three key types of information systems
are management information systems, decision support systems, and executive
information systems.

MANAGEMENT INFORMATION SYSTEM
A management information system (MIS) integrates data from various de-
partments to make it available to help managers with day-to-day business
operations. An MIS deals with specific and highly structured data. Different
departments collect and process the data. Employees enter daily transactions
into the system as they occur, such as when they prepare purchase orders and
record sales. From this gathered and stored information, managers can request
reports to help them make daily operating decisions. For example, a sales report
can show a manager where sales are slow. From this information, the manager
might decide to do a special promotion for customers in this area.

DECISION SUPPORT SYSTEM

A decision support system (DSS) helps managers consider alternatives in mak-
ing specific decisions. For example, a DSS can help a manager determine the
most efficient routes for the company’s delivery trucks. The ability to analyze
“what if?” scenarios is a key capability of a DSS. What if we continue our
current strategy? Would that work? What if we try something else? What
are the likely consequences of that action? The company’s management
information system provides much of the information for its decision sup-
port system.

PHOTO: © GETTY IMAGES/PHOTODISC. How can different information

systems be used to streamline
the delivery of merchandise
to customers?

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