The Main Difference Between MIS and ERP: The Benefits and Drawbacks

To successfully run a business, you need to manage many variables. Without good software, your chances of solving problems are reduced by factors such as budget, time, and the skills of employees.

Panorama's most recent survey shows that 83% of companies have abandoned outdated financial, sales, marketing, and HR systems. Instead, modern MIS and ERP systems are saving the day, increasing the efficiency of data management and business decision-making.

There is, however, a significant difference between them. Therefore, it is important to understand how these products interact. First, look at the core business management features and break down each software product.

What is an MIS?

MIS (Management Information System), a consolidated database, stores all information about an organization's finances, operations, personnel, and work processes.

This software collects, stores, processes, and distributes data. It also creates data-based reports and provides information support for management decisions. It has the following major features: analytic forecasting, current and long-term planning, and practical control of operations.

Due to the vast functionality, separate solutions were created for specific capabilities such as ERP in MMIS, decision-making support system (DSS), or office automation platform (OAS).

The pros and cons of MIS

The clear advantages of MIS include:

• A centralized information base. Managers and employees can access all the information needed to complete day-to-day tasks from one location. This allows for smoother business operations as up-to-date information is always available. Employees can use templates or questionnaires to standardize their data collection methods.
• Prioritization of tasks It is unnecessary to spend hours manually retrieving or storing data. The company can save on labour costs, and employees have more room to be productive.
• Improved decision-making algorithm Data processing tools are available to generate reports from data inputs from multiple sources. This makes it easy to manage material flows and workloads.
• Personal responsibility is increased. Monitoring employee activity is also possible with MIS. It allows you to see who made which decisions and how long they took. This helps to identify faults and rate in-house performance.
• Reduced paperwork. The company's network allows access to its central database and digitally stores data. This greatly speeds up the review process and reduces the cost of paper, printing devices, ink, and other expenses.

However, MIS has its drawbacks.

• High prices. It is expensive to buy an off-the-shelf product or create a custom solution. Medium- and large-sized enterprises use MIS more frequently to deal with large quantities of data.
• Limited functionality. Pre-made solutions may not always include all the features required and could have many unused options. It is not possible to only pay for the functionality you need. MIS must digitize and standardize your company's business processes, including all of their nuances and details. Highly-skilled specialists are required to develop and integrate unique software.
• Training staff is essential. Complex systems require knowledge and skills. Without them, the system won't work. Although training employees is expensive and takes time, it pays off over the long term.

What is ERP?

ERP (Enterprise Resource Planning) is a software solution that allows enterprise resource planning in MIS. It is also a business process management software. ERP is often a component of a larger management information system. It simplifies routine operations and provides managers with analytical information that can be used to support critical internal business processes.

ERP development from scratch Systems is a key element of the MIS concept. They have been more popular than MIS in both large and small businesses. These systems can connect various management subsystems within a large organization.

Each department can access a specific part of the system through one application. These modular applications store data in a central, synchronized database across all components.

The difference between ERP and MIS is not clear. It cannot eliminate inefficiency within a company by itself. Managers may have to change the business's organization to achieve better results. It is not a good idea to spend money on a system that is incompatible with your business.

How do you choose the best ERP accounting software? Check out our article!

Advantages and disadvantages of ERP vs. traditional information systems

We have identified the main benefits of ERP based on user feedback:

• Simple reporting. You can use ERP as a unified reporting system with built-in templates. Employees have the option to create their templates using data that is automatically collected.
• Efficiency in workflow ERP automates daily tasks, which reduces staff burden. ERP automates repetitive manual tasks so that team members can concentrate on their most important tasks.
• Secure confidential data. The number of vulnerabilities is minimized by limiting access to information and centralizing storage. The system provides secure backups, which decreases the chance of data loss from error or failure. The recovery process is quick and easy.
• Optimizing internal processes. Easy and rapid access to required service information facilitates decision-making speed and compliance with company strategy.
• A well-managed supply chain is essential. Faster order processing and on-time delivery ensure the business's success.

Fields in an ERP application

Companies that operate in the following areas use this type of system quite often:

• Wholesale, retail, and e-commerce
• Transportation services, logistics, and distribution
• Production and Financial Management Systems
• Information technology
• Manufacturing
• Real estate

Information management is critical in all aspects of an applied business, including:

• Finance: accounting, debt management, payments, cost management, budgeting, calculations, taxes, financial consolidation.
• Personnel: recruiting, training, payment of salaries, pension accruals.
• Production: accounting of equipment, materials, and facilities; management of operational processes; control of product quality and production; after-sales service, etc.
• Sales: pricing, ordering, processing, and sales analysis
• Supply chain: planning, purchasing, inventory, product configurations, and claims to handle.
• Project Management: Resource Planning and Usage, Costing, Billing, and Management.
• CRM: marketing, sales, customer services, fees, contact management, and workflow maintenance.

What can PerfectionGeeks do for you?

Knowing what ERP is in a management system should make it easier to choose which one to implement or whether to implement both. It doesn't matter how complicated or valuable a solution might seem; evaluating the ROI is important before you implement it. Unfortunately, it is not easy to assess the return on future investments. Therefore, you must choose software development companies with in-depth knowledge.

PerfectionGeeks offers a variety of software development, support, testing, migration, and testing services. Our team has extensive knowledge of the implementation of corporate solutions. We will examine your company and recommend the best option for you.