The information a manager receives from an MIS has to relate to the decisions the manager has to make. An effective MIS takes data that originates in the areas of activity that concern the manager at any given time, and organizes it into forms that are meaningful for making decisions. If a manager has to make pricing decisions, for example, an MIS may take sales data from the past five years, and display sales volume and profit projections for various pricing scenarios.
A key measure of the effectiveness of an MIS is the accuracy and reliability of its information. The accuracy of the data it uses and the calculations it applies determine the effectiveness of the resulting information. The sources of the data determine whether the information is reliable. Historical performance is often part of the input for an MIS, and also serves as a good measure of the accuracy and reliability of its output.
The information a manager receives from an MIS may be relevant and accurate, but it is only useful if it helps him with the particular decisions he has to make. For example, if a manager has to make decisions on which employees to cut due to staff reductions, information on resulting cost savings is relevant, but information on the performance of the employees in question is more useful. The MIS has to make useful information easily accessible.
MIS output must be current. Management has to make decisions about the future of the organization based on data from the present, even when evaluating trends. The more recent the data, the more these decisions will reflect present reality and correctly anticipate their effects on the company. When the collection and processing of data delays its availability, the MIS must take into consideration its potential inaccuracies due to age and present the resulting information accordingly, with possible ranges of error.
An effective MIS presents all the most relevant and useful information for a particular decision. If some information is not available due to missing data, it highlights the gaps and either displays possible scenarios or presents possible consequences resulting from the missing data. Management can either add the missing data or make the appropriate decisions aware of the missing information. An incomplete or partial presentation of information can lead to decisions that don’t have the anticipated effects.