Recent Panorama research shows that 81% of organizations are either

implementing ERP systems or have already completed the process. MIS

software doesn’t lag far behind. It’s widely used in sales, marketing, HR
management, accounting and finances, and many other areas.

Both MIS and ERP systems help companies with data management and
decision making. Still, there’s a little bit of difference between them. In this
article, we’re explaining what is ERP, what is MIS, and what is ERP in MIS.
Stay tuned if you’d like to know more about these systems, their differences and
similarities plus pros vs cons of implementing.

What is MIS and How It Works?

Before drawing peer to peer comparison of MIS and ERP systems, let’s define
what they are used for. We’re going to start with MIS.

MIS stands for a management information system. It’s a centralized database

that stores data about a company or enterprise. The main role of MIS software
is to process data collected from various departments and draw a report based
on it. These systems also provide information support for management
decisions.

MIS works with people, technology, and information that influence the business.
A properly implemented management information system can double the
efficiency of management operations within the organization. Successful
middle-sized companies and large enterprises develop these systems to
increase income and enhance its profitability.
Main concept of MIS software

MIS software is initially focused on a specific business. So it’s the main

business process of a company that is being considered. For instance, the
restaurant model: they need to plan the budget, organize the delivery of food
items, prepare dishes and serve them to customers. Restaurants take
advantage of MIS on each step of this process.

Let’s find out how exactly they do it:

1. Strategic control. Business owners use MIS for planning their budget,

defining target markets, policies, and objectives. They compare weekly sales to
ingredients cost which allows for tight cost control.

2. Managerial control. Managers create menus, collect customer feedback

regarding food and service quality. Even when an order gets canceled, MIS
stores its details including the reason for cancellation.
3. Operational control. This part stands for processing tasks with the help of
appropriate technologies. For example, when a waiter takes an order and sends
it to the kitchen using terminals located in the dining room. Another example is
chefs sending 'out of stock' notices when the kitchen is out of food items.

By following this example, we can define three levels of MIS users:

 Top managers (strategic control)

 Middle-level managers (managerial control)
 Operations managers (operational control)

Concept of a management information system by user levels

But the food industry is not the only sphere that can benefit from MIS
software. These systems are also used in Finances, Marketing,
Manufacturing, IT and many others. Why? Let’s check the advantages of
management information system in business to find out.
Advantages and Disadvantages of
MIS
It’s always a good idea to start with the positive side, so we’re going to review
the benefits of MIS system fist.

Single database

Managers and employees have access to a database with all the data needed
to process everyday tasks. Business operations are getting smoother as
information is always in hand. Also, staff can standardize data collection
methods, for example, by using forms or questionnaires.

Ability to prioritize tasks

Due to an efficient system, employees focus on important tasks. There's no

need to spend hours on saving or retrieving data manually. As a result, the
company is saving on manpower costs and employees are working more
productively.
Order details can be entered and retrieved right away

Improved decision-making process

MIS usually have data processing tools that make conclusions based on input
data from various sources. It helps with material management, manpower
allocations, etc.
MIS allows users to export details from other sources

High degree of accountability

In MIS, all user actions can be tracked. Thus, finding who made a specific
change is no longer impossible, not even time-consuming. So managers easily
find out who made a critical mistake or who are the best performing employees.

No paperwork

Among the advantages of MIS is the reduction of paper stored in the office.
Departments access the central database directly from the company network to
check the required details. This not only makes the whole process much faster
but helps to reduce expenses on papers, printers, ink, etc.
Among main functions of MIS is simple data access

Understanding the financial situation

MIS help top managers to evaluate the overall financial situation of the
company. They can easily check status reports of different projects and find out
how successful they turn out to be.
With MIS, managers are always aware of current financial situation

Staying competitive

MIS software stores and processes data in a faster and easier way. Customers
are satisfied with the level of service as their requests are processed faster.
And employees get rid of mundane tasks and are more motivated to work. So
companies achieve better results on both fronts.
Benefits and drawbacks of management information system

Unfortunately, there’s always another side of the coin. MIS software also has
its dark sides, so we’re going to uncover them.

Expensive to purchase

Both the development of a custom solution and purchase of a ready-made suite

may cost a fortune. So MIS software is rather a choice of medium-sized and
large enterprises that need to process a terrific amount of data.

Doesn’t have the required features

Ready-made suites may not have the features a business needs. Or vice versa
– there may be tons of non-needed options. And there's no way to return the
investments if the company has better access to data no one needs.
Need to train personnel

There's no use of MIS if the staff doesn't know how to work with it. So the
company will have to spend some time and money on teaching employees how
to work with the system. But these investments will pay off as soon as the
system is fully implemented.

What is ERP?
ERP stands for enterprise resource planning. In short, this is a process of
managing such components of business like human resources, planning,
sales, marketing, and so on.

ERP software is developed to facilitate interaction between core business

processes within a company. It's a large system that allows enterprises to
manage information, facilitate its sharing, work on business planning, etc.
These systems combine a variety of processes and increase their efficiency.

?
Want to find out more about ERP systems and their roles? Check our ‘ ERP
Software Basics’ article featuring these and many other details!

ERP software binds different systems of a large organization together. Without

the system, each company's department would have its own software for
processing specific tasks. With ERP, departments still have their own system
optimized for tasks they process, but it can be accessed via a single
application.
A great share of modern organizations implements customized ERP software
for their business. These applications are modular and store data in a central
database. And if a custom ERP solution is delivered, there’s no need to worry
about synchronization between various systems.

Still, ERP software is not an answer to everything. It may not eliminate

inefficiencies within the company. Instead, managers may need to change the
way the company's organized to reach top results. Otherwise, all they get will
be tons of money spent on an incompatible system.

Pros and Cons of ERP Systems

We've already checked the benefits of management information system and its
drawbacks, so to be completely impartial, let's take a look at the pros and cons
of ERP software.

Easy reporting

ERP works as a unified system for collecting reports. The software often has an
in-built pattern for standard financial reports, or staff can generate custom ones
at any time.
How reports look like in ERP

Increased efficiency

Same as MIS, ERP software helps reduce the load by processing some daily
tasks automatically. A properly implemented software reduces the number of
repetitive manual processes, and the team can focus on more important tasks.

Securing data

Another benefit ERP brings is securing data. These systems have in-built tools
to ensure data protection. First, managers provide different access levels to
employees. Second, the data is stored in one database and not various
sources. So it's easier to establish its protection.

Finally, ERP solutions backup critical and sensitive data. So even if part of
important information is accidentally removed, it won't take long to restore it.
Administrators can easily manage user profiles in ERP

Improved workflows

ERP software provides access to data the staff requires just when they need it.
These system work with a central database. Information from one department is
transferred into the centralized location, and other departments can review it.

!
ERP solution doesn’t always mean a desktop solution. Find out how to develop
its mobile version in our ‘ Mobile ERP Strategy Development: Examples &
Reasoning’ guide.

Improved supply chain management

Companies dealing with transportation of inventory or production can exhale.
Improvements that ERP can offer include the minimization of order processing
time, more on-time deliveries and other processes that ensure business
success.

All shipping and inventory details on one page

Increased scalability

When the company expands its customer base, sets up new business
processes, opens up new departments, they need a scalable system that also
can be expanded.

With custom ERP software, it ends with finding a team that provides software
development services and making sure they understand the future plans for
growth.

Customer service
ERP brings advantages to both internal and external clients. As the software
automatically processes customer data, sales managers can focus on working
with people rather than entering their details into a database.

How employee profile may look like in MIS

Checking all the benefits of ERP software, you might already want to develop
such a system for your company. Still, remember that drawbacks and risks are
always there. And now's the time to meet them face to face.

Here’s 2 ‘c-’ issues you may face prior or after ERP system implementation:

Cost

For instance, if you prefer purchasing a traditional suite, you may end up
spending tens of thousands on the license. It's possible to reduce the cost by
going for a cloud-based system with monthly payments. But mind that
personnel and clients will have access to the system only if the monthly
subscription is extended.

Customization

When companies understand that the system they've purchased doesn't meet
their requirements, they often turn to customization. This process may indeed
help with filling business needs, but it doesn't come for free. So they spend tons
of time, money and efforts on customization as well as paying a sum for the
license.

Advantages and disadvantages of ERP systems

Still, the aforementioned cons are not blockers.

First, if the system is chosen according to the actual needs of the company, it’ll
pay off pretty quickly.
Second, there’s always an option to develop custom ERP software. This way,
the system will have only required features and no unnecessary solutions.

Finally, it's possible to reduce the cost by asking developers to include MVP

features only. And business owners can add some required features at any
moment being 100% sure they are going to pay off.

How MIS and ERP are Related to Each

Other
By defining the roles of both MIS and ERP system, we can easily understand
their relationship. ERP is considered to be a part of a management information
system. And here's the main difference between these two systems:

MIS is responsible for information management. It organizes and stores

data collected from various sources in a single database and draws reports
based on this data.

ERP is used for planning and automizing different processes. These

systems analyze data and allow managers to forecast development decisions.
Comparing MIS vs ERP software

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What is MIS
Pros and cons of MIS
What is ERP
Benefits and downfalls of ERP
MIS and ERP relation