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17 November 2021

Why ERP is Better Than MIS: Top Difference Between Software

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According to Panorama’s survey, approximately 83% of companies are staying off obsolete systems of sales, marketing, staff, and finance management now. Modern MIS and ERP systems are helping with that, as their main function is to improve the efficiency of data management and business decision-making.

As we speak, MIS and ERP are widely used in sales, marketing, finance, logistics, and other industries to track business data and make weighted operational and management decisions. Nevertheless, there is a very significant difference between them: MIS is the designation of systems that control any kind of information, and ERP is a specific type of information. That is, the first is a particular and / or element of the second.

This article will answer the following questions:

What is a Management Information System (MIS)

MIS (Management Information System is a consolidated database that collects and stores all available information about the company’s finances, operations, personnel, and work processes. The essence of the MIS concept is to process business data and submit it in the form of regular reports that provide information support in making management decisions.

The main reason for introducing such systems is to increase the income and profitability of the business. The company’s management and chief technology experts make the decision on the implementation of MIS. Below are the main functions of MIS:

MIS application area

MIS software is usually focused on a specific business, since each area of entrepreneurial activity has its own tasks and requirements for information systems. For example, if this is a restaurant business, then its tasks are: to plan a budget, buy and deliver products, prepare dishes and serve them to customers.

If the restaurant uses MIS, then such a system will be divided into three levels:

  1. Strategic control. Restaurant owners use the system to determine the target markets, marketing policies and goals of the company, as well as to plan a budget sufficient to achieve these goals.

  2. Management control. The staff makes a menu on-site, analyzes customer reviews on the quality of food and service. If an order has been placed and then returned, MIS will save this data, including the reason for the refusal. This will help to respond quickly to quality deterioration and track customer wishes.

  3. Operational control. Here, MIS is responsible for processing work processes using appropriate technologies. For example, when the waiter takes the order and sends it to the kitchen using the terminal, or when the chef uses his terminal to notify “no products”. MIS brings this data together, which greatly simplifies and speeds up the efficiency of processes.

Restaurant business is not the only area that can benefit from the implementation of MIS. These systems are used where it is necessary to streamline and / or accelerate the flow of information: production, finance, sales, production, scientific research, eco-projects or the construction of an international space station. Therefore, any activity where data, workflows and operations can be represented in a “digital” format is a potential environment for the implementation of MIS.

The advantages of management information systems include the following:

MIS also has disadvantages:

What will happen if you do not take into account compatibility issues and neglect staff training, is described in the article “ERP System Development Process: Key Tips”: multimillion-dollar losses, lawsuits, loss of markets and reputation. Use the negative experiences of Nike, PG&E, HP, Woolworths and Target to avoid this development.

Scope of application of MIS

MIS solutions are most frequently used to optimize and accelerate the exchange of information among the departments of accounting, marketing, sales, production, etc. A system with SAP (Systems, Applications and Products in Data Processing) is useful almost for any enterprise, where there is a necessity to digitize and systematize data according to production requirements. Development or integration of MIS is adapting to the requirement of a specific type of company. For instance, key features for the production are:

This system provides three main management segments:

Broad functionality has caused the formation of separate solutions, which are focused on definite capabilities; in particular, ERP (enterprise resource planning), which will be presented below, and lesser-known DSS (decision support system), OAS (office automation system), SCM (supply chain management), CRM (customer relationship management), KMS (knowledge management system).

What is an enterprise resource planning system

ERP (Enterprise resource planning) is a special software solution responsible for planning operations with available and future resources, or more precisely – an operating system of process management, which operates with data on company resources. As a rule, ERP is a part of a larger management information system, which is at the forefront of routine operation simplification by providing managers with analytical information and tools to facilitate critical internal business processes.

Currently, this component is even more popular among large and small enterprises than classic MIS because it’s customized to more specialized tasks.

The main functions of ERP-systems: 

ERP application area

Who uses ERP systems?

Panorama studies have shown, that 80% of enterprises are either in the process of implementation or are already using ERP systems because a specialized decision is always prioritized over a general one. This is mainly a business in the field of retail, logistics, production, distribution, finance, real estate, and information technology. Recently, ERP solutions based on distribution registers have been popular: blockchain, Tangle, Hashgraph.

Depending on the application, ERP covers the following:

Advantages and disadvantages of ERP

The main advantages of ERP-systems over similar software solutions are considered:

The disadvantages of ERP systems are:

Specifics of implementation

The implementation process of ERP systems is far from simple. Initially, it’s the integration of the most important blocks, which embody the basis of the company’s activity. As a rule, these are such parts of architecture as the platform (a base with minimum capabilities, i.e. the environment) and «control of the money», where the database is stored, methods of array storage and processing are considered, and the software to work with them. Then the rest, which is related to separate less-significant departments, is embedded.

Conclusion: the main differences between MIS and ERP

To sum up, the following differences can be identified. First of all, as it was stated in the beginning, MIS is a more general concept of information; more precisely – an entire class of management systems, a special case of which is ERP as information on resources.

The result is a certain difference in specifics of interaction with data.

The task of MIS is primarily to work with accounts and reports, i.e. collection, storage, and processing of information from certain sources. ERP aims at the automation of business processes and accounting, which are related to the company’s resource management. On top of that, ERP has features of monitoring the current state of the business, analyzing, and forecasting future activity and development.

As stated at the very beginning, an enterprise resource planning (ERP) system is a special case and / or element of a management information system (MIS). The main difference between the two:
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