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Benefits Of Management Information Systems

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Warbenton uses manual data entry and analysis processes in its operations. Much time is spent gathering data spreadsheets from various departments for re-entry into a master spreadsheet. The data is then presented as the monthly profit and loss statement. If a department needs to change its data after initially turning it into the analyst, the analyst must return the original spreadsheet and wait for a new spreadsheet for data entry and analysis. This slows the data collection, consolidation, analysis, and presentation to management tremendously. Every task in this process is time consuming and unnecessarily bothersome.

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Management Information Systems are available so that these tasks do not need to be so time consuming and bothersome. If Warbenton were to institute an integrative system to automatically update whenever changes are made, the issue of having to change all the data on multiple forefronts would not be necessary. Systems are able to allow employees from various departments to enter the data specific to their department, and automatically consolidate, analyze and potentially audit or plan according to the data. Warbenton is not practicing efficiency, innovation, or optimal productivity.

In the said scenario, where an employee from a designated department or area must recollect their data from the analyst for changes, and then resubmit the data so the analyst can then reenter the data on their spreadsheet prior to analyzing, double checking, and presenting the data, a significant amount of time and resources are being wasted. The amount of time these tasks are taking could be better spent with more productive activity. This also increases the amount of time it takes for Management to see the data, and make decisions based on the data presented. The process itself is serving as a constraint to the decision making process.

Management is capable of making many significant decisions based on the monthly profit and loss statement. For example, depending on how well the company is performing, management may decide to change production methods or amount of output. Management may implement a change in the month prior, and wish to see how that change is doing in order to further implement, or shut down the change altogether. Employees could potentially lose their jobs and the company could shut down altogether if the information is not received quickly enough, or the information is inaccurate. Management Information Systems are designed to alleviate these issues.

The more human input into a procedure, the higher the likelihood for human error. If the employees of the various departments decide they need to make multiple revisions to their data submissions, a process that is currently taking a couple of weeks will likely turn into a couple of months. A monthly profit and loss statement cannot be completed and submitted quarterly or bi-monthly. The data is needed on a regular basis to alleviate the issues at hand, as well as to plan the future effectively. The financial health of a company depends on the efficient communication of financial data regularly. The time that it is taking the various department agents to submit, revise, and resubmit the data sheets is further infringing upon their time they could better utilize completing other work.

Ultimately, the company is losing money in its current practice of manual data entry and consolidation of data. The opportunity cost alone is tremendous in not better utilizing the employees’ time on other tasks. Data collection, entry, consolidation, and presentation could be easily accomplished through utilization of the correct Management Information System. The company would thus increase efficiency, effectiveness, productivity, and potentially profits. Most likely, through the errors and omissions that are inadvertently occurring in the current process, the company is losing profits. Management is not receiving pertinent information on a timely basis and opportunities are being lost.

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