Performance Management Information Systems

Performance Management Information Systems identifies the accounting information requirements and the types of information systems used; describes and identifies the main characteristics of transaction processing, management information and executive information systems; and defines the good and bad of open and closed systems with regard to performance management.

Different types of information systems used for strategic planning, management control and operational control and decision-making.

Accounting information can be drawn from both internal and external sources and is used to create plans and for decision making.

• For strategic planning, information about competitors, profitability of products, customer profitability, pricing decisions and the value of the market share are useful in order to set goals and create a strategy.
• For management control, information about resources, efficiency and effectiveness is required to set targets and objectives. Much of this information can be generated internally.
• For operational control, information about the operations, transaction data (e.g. customer purchases), detailed operating information that is expressed in the right units is used to organize day to day tasks and activities.

Management information systems include transaction pro cessing systems, management information systems, executive information systems and enterprise resource planning systems.

1. Transaction processing systems (TPS)

Transaction processing systems (TPS) “collect, store, modify and retrieve the transactions of an organization” and are characterized by:

• Controlled processing
• Inflexibility
• Rapid response
• Reliability

2. Management information systems (MIS)

Management information systems (MIS) “convert data into information” and are characterized by the following:

• Provide support for structured decision
• Are designed to report on existing operations
• Have little analytical capability
• Inflexible
• Focus on the internal

3. Executive information systems (EIS)

 Executive information systems (EIS) use data from the MIS and allow to create a “generalized computing and communication environment.” Characteristics include:

• User friendly interfaces
• Interactive tutorials that visualize situations
• Links to external databases
• Tracking of critical information

4. Enterprise resource planning systems (ERP systems)

 Enterprise resource planning systems (ERP systems) are software packages that pull together the organization’s processes into one system. Some characteristics are:

• Can be accessed by anyone who’s computer is linked to the central server
• Has decision support features
• Can be linked to external systems
• Works well for global operations
• Allow for standardization of information and work practices