---
title: "Needs, functions and importance of MIS"
subject: "Organization and Management"
chapter: 9
key: "semester_7/organization_and_management:mis-needs-functions-importance"
source: https://www.bctengineer.com/q/semester_7/organization_and_management/mis-needs-functions-importance
site: BCT Engineering
---

# Needs, functions and importance of MIS

Organization and Management · Chapter 9: Management Information System

- Asked in: 2073 Shrawan, 4 marks; 2073 Chaitra, 4 marks; 2071 Chaitra, 5 marks; year not given (asked 3 times)
- Video: [Management Information System-MIS-Features & Functions of MIS-Objectives of MIS-Need/Importance](https://www.youtube.com/watch?v=T38eqPEvRao) — Management Tutorials
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/organization_and_management/mis-needs-functions-importance
- Whole chapter: https://www.bctengineer.com/md/semester_7/organization_and_management/chapter-9

## Question

Explain the needs, functions and importance of MIS in organizations of today's modern world.

## Short answer

MIS is needed because organizations handle huge data, face fast changes, and require coordination and regulatory reporting. Its functions include data collection, processing, storage, report generation, decision support, and communication. Importance includes faster decisions, efficiency, better control, customer service, and competitive advantage.

## Answer

Management Information System (MIS) is a computer-based system that provides managers with timely, accurate and relevant information for planning, control and decision making.

#### Needs of MIS
1. **Large volume of data:** Organizations such as banks and Nepal Telecom handle millions of transactions daily that cannot be processed manually.
2. **Fast, competitive and changing environment:** Quick decisions need current information.
3. **Complex organizations:** Many departments and locations require coordination.
4. **Better decision making:** Managers need facts, not guesses.
5. **Reducing cost and errors.**
6. **Regulatory reporting:** Reports to Nepal Rastra Bank, Inland Revenue Department, SEBON.
7. **Customer service and competition.**

#### Functions of MIS
1. **Data collection** from internal and external sources.
2. **Data processing** (sorting, calculating, summarising).
3. **Storage** in databases and retrieval.
4. **Report generation:** routine, exception and on-demand reports.
5. **Information dissemination** to the right manager at the right time.
6. **Decision support:** analysis and models.
7. **Planning and control:** compare plans with actuals.
8. **Communication and coordination** between departments.
9. **Security and backup.**

#### Importance of MIS in modern organizations
1. Improves quality and speed of decisions.
2. Increases efficiency and productivity.
3. Helps planning and forecasting (e.g. NEA's load forecast).
4. Better control and early warning of problems.
5. Improves coordination and communication.
6. Better customer service (mobile banking, online services).
7. Provides competitive advantage.
8. Reduces paperwork and cost.
9. Supports transparency and e-governance.

Example: Core banking systems, eSewa, NEA's billing and smart-meter systems.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Why do banks and Nepal Telecom need MIS?
   A. They handle millions of transactions that cannot be processed manually
   B. They have few transactions
   C. To avoid regulators
   D. To replace managers
   Answer: A. Large data volume makes manual processing impractical. (Key point: Need for MIS)

2. Which is a function of MIS?
   A. Data collection, processing, storage, report generation and dissemination
   B. Hiring staff
   C. Setting prices
   D. Manufacturing
   Answer: A. MIS collects, processes, stores and distributes information. (Key point: Functions)

3. MIS produces which reports?
   A. Only annual
   B. Routine, exception and on-demand
   C. Only oral
   D. None
   Answer: B. Report generation includes routine, exception and on-demand reports. (Key point: Types of reports)

4. Which is an importance of MIS?
   A. Slows decisions
   B. Improves quality and speed of decisions and gives early warning of problems
   C. Increases paperwork
   D. Reduces coordination
   Answer: B. It improves decisions, control, coordination and competitive advantage. (Key point: Importance)

## Related in other subjects

- [Einstein's contribution to modern science](https://www.bctengineer.com/question.md?key=semester_5%2Fcommunication_english%3Aeinstein-contribution-modern-science) — Communication English, chapter 2, asked 5×