The Impact of Effective Management Information System on the Performance of Fidelity Bank
What is management information system? Management information system is a system hat provides information needed to manage organization effectively. It is regarded to be a subset of the over all internal controls procedure in a business, which covers the application of people, documents, technologies and procedures used by management to solve business problems such as costing a product service or a business wide strategy.
Saunders (1974) stated that management information system is the substance of all human intellectuals.
According to shailesh Ratel (2010) management information system is a combination of human and computer based system, which takes environment of business then stores, calculates, analysis summaries data and finally generates the various levels of management for all business purposes to take timely and correct decisions for the organization and how they control the business.
According to Therauf (2005) “Management information system is a collection of sub-system and related programmes and modules that are interconnected to fulfill the information requirements necessary to plan, organize direct and control business operations and activities”.
Kumar N. and Mittal R. (2004) stated that management information system is a system which provides information support, for decision making in the organization. It is an integrated system of man and machine for providing eh information to support he operations, the management and the decision making functions in the organization.
CURRENT LITERATURE ON MANAGEMENT INFORMATION SYSTEM THEORIES
The theorists who have contributed to our understanding of management information system are practical managers as well as social scientists. Management information system has major tools for achieving its information such as the mode of management, which determines the quality and degree of accuracy of decision. The contributions of practical managers have been reflected n the theory about their own experience in management and definitions applicable in a wide variety of situations. In an organization, managers use all resources of the organization like its equipment, finances and information as well as is people to attain goals.
Management information system provides regular information to managers to allow them to make decisions based on data than guesses. Certain data and analysis can play a very useful role in making good decision about where and when to use human and other resources to achieve the mission of organization.
According to Okplala (2001) “management information system is a formal information network using computer capabilities to provide management with necessary information for decision making. The goals being to provide correct information to the appropriate manager at a right time”.
Henry Lucas (1982) defines an information system as a set of organized procedures that when executed provide information to support decision making and control in the organization.
According to Sackman (1976) Management information sysem (MIS) is an “Evolving organization of people, computers and other equipment, including associated communication an support systems and their integration operation to regulate and control selected environment events to achieve system objectives”.
R.C Ackoff (1967) remarked that organization goal could be attained efficiently by putting in place effective management information system. When there is lack of management information system the whole operation of organization will not be progressive.
INFORMATION AS AN AID TO DECISION MAKING
Management information system helps in decision making. Simon (1977) describes the process of decision making a comprising four steps: Intelligence, design, choice, and review.
The intelligence stage encompasses collection, classification, processing and presentation of data relating to the organization and it environment.
This is necessary to identify situations calling for decision. During the decision stage, the decision maker outlines alternative solutions, each of which involves a set of actions to be taken. The data gathered during the intelligence stage are now used by statistical and their models to forecast possible outcomes for each alternative. Each alternative can also be examined for technological, behavioral and economic feasibilities.
In the choice stage, the decision maker must select one of the alternatives that will best contribute to the goals of the organization. Best choices can be subjected to review during implementation and monitoring to enable the manager to learn from mistakes. Information plays a vital role in all four stages, of the decision process.
Kiirya Geoffray David (1990) in his first edition he said that “decisions making is significant if it affects the survival and profitability of an organization considering relatively the resources available to the enterprises”. In the banking system, the performance of a bank will determine on how effective the information is generated and communicated.
Effective information management is a business discipline that analysis various types of information to use as resources to improve business operations. The gathering of information and subsequent analysis may be done electronically or manually. Information management, in today’s business environment often includes data administration, information technology or computer science business department. These department usually help companies to control the amount information collected or gathered through the use of electronic means.
Effective information management data can be collected from internal and external sources. Internal sources of business information may include the accounting, production, executive management or human resources. External management of business information often includes the economic market place, competitions, natural organization or a local chamber of commerce.
CHARACTERISTICS OF MANAGEMENT INFORMATION SYSTEM.
- Report that are decision oriented:
This can be achieved by providing information that is accurate, concise, timely, complete and relevant so as to make the report useful for decision making.
- Room for expansion and growth:
The survival and growth of any organization depends on how well management information system (MIS) is adapted to the changing environment therefore it must be flexible, enough to handle the changing needs of an organization. It also must have the capability to handle any increase to the desired requirement.
- RESULT THAT THE USERS NEED:
The primary objective of any management information system is to provide management with information necessary for decision making. The management information system cannot be successful if it does not meet the requirement of the user in designing management information system it is important to distinguish between the needs of the different levels of management.
THE STATUS OF COMPUTER APPLICATION IN MODERN BANKING
In banking there is great need for information because information could support good decision. It should lead to effective performance and attainment of organization goals. The need for information is greater in banking sector because of the nature of the business. With the help of information technology and computerization the covetous will be able to face the challenges of this new millennium. For instance, in the money market and foreign exchange market, banks must react quickly to changes in interest rates and other valuable in their operations. While in the production industries mistake can be ratifies and loses therefore minimized through the use of computers.
The computer has found to be valuable and indeed, it help the banking system to provide banking services to both local and international customers.
Reasons for early introduction of computer by banks.
- The bank may look towards future development in the industry with an eye in the direction of improving it competition position.
- They use computer in counting, payroll, printing of cheque books, tellers and other materials.
- The bank may experience over loan in the operation which traditional book keeping equipment cannot handle.
- The ever increasing competition face by banks financial intermediate from the non banks intermediate all over the world is another reason, why they have to be computerized. It can still be say that the banking industrial today faces tremendous challenges from other financial institution, the insurances industry is expanding to gave a fight to the bank in very long term end of the lending market.
Financial house are multiplying and providing the specialist service required by the industry, commerce and individuals who hither to look forward to their banker for such services and saving institution such as the federal saving banks, federal mortgage banks and development financial institution are being re-organized and re-shape to struggle effectively with bank in the more productive, most efficient in services they deliver than they have done in the past and for this they need the assistance of computers.
Element of management information system
Management information system consists five basic elements. It includes;
- People: This is the most important element of management information system (MIS) it plays many roles at various level within the system
- Machine: This is the second element of management information system (MIS) it is use for processing, manipulating and operating on data to obtain information.
The most modern machine use today is computer.
- Procedure: This is what ensure that proper data get from the computer is properly transformed, reported and used system procedure use both computer base and non computer based knowledge.
- Data base: Data is a term used to describe the raw input (materials) of an information processing system.
- Control: This is very important in management information system it covers all the other basic element, such as people, procedures , machine and data base.
CRITERIA FOR AN EFFECTIVE MANAGEMENT INFORMATION SYSTEM
The banking information system must provide timely, Relevant and reliable information to aid decision making at all levels of management, addition to meeting the needs of outsiders firms list the following objectives for the management information system:
- The evaluation must be sufficiently, timely to allow adopting the firms operation or its objectives.
- The system must yield information that will permit management to evaluate the firm’s position n comparison with its goals
iii. The system must aids in evaluation of alternative choice action.
- The cost and value of information must be measurable.
- The system must recognize financial and personal relationship within the firms.
The banking system is the heart of the firm’s management information system. The information needed for management decision is much broader than historical. It must make available information for future prospect and dealing with environment factors affecting the firms in addition to data relating to post event .
SUMMARY OF THE LITERATURE REVIEW.
In summary, effective management information system is important tools to supports, analyze, delivery and add variability to the banking sector. It has been able to review systematically and realistically classify banking sector based on the perceived risk of default in order to facilitate comparability of banks.
Management information system related program and modules are inter-connected to fulfilled the information requirement necessary for planning, organizing, directing and controlling business operation and activities. Management information system implies that each managers has a clear idea of the his job.
The objective of management information system can also be summarized as follows:
- The evaluation must be sufficiently and timely allow.
- The cost and value must be measurable
- The evaluation must aid alternative choice of action.
- The system recognize financial and personal relationship with the firm.