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Introduction To Managing Information And Technology
Managing information and technology consists of the basic functions of management like staffing, budgeting but it also includes unique functions to such as Software development, change management, network planning and technology support. It it used by business organisation as it supports and compliment the operations. It is a discipline in which information and technology resources of the organisation are managed according to their needs and priorities. The major aim of Information and technology is to generate value through the use of technology. It needs alignment of technology with the business strategies (Abdillah, 2014). Where value generation in an organisation consists a network of relationships between internal and external environment, technology plays a vital role in improving the whole value chain of the firm. However it needs business and technology management to be creative, synergistic and cooperative team rather than a pure mechanistic span of control.
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An IT manager is responsible and accountable for current program of IT services. Most IT programs are formed to educate and develop managers so that they can manage planning, design, selection, implementation, use and administration of emerging and converging information and communication technologies in an effective manner. The significance of managing information and technology is to understand the managing data. If the structure of information does not transfer properly with each other, it could lead to unreliable data (Davenport, 2013). An important part of understanding in management of information and technology is Data Governance. It is an approach to manage information across entire company. Business firms depends on information and technology for quick communications, data processing and market intelligence. It supports the companies to enhance the business processes, accomplish cost efficiencies, drive revenue growth and maintain a competitive advantage in the marketplace. The key purpose of managing information and technology is to support managers in making strategic, tactical and operational decisions in an efficient and productive way (Valacich Schneider and Jessup, 2012). The aim of the present essay is to define the role of information system in organisation to gain competitive advantage. The key objectives of managing information and technology are as follows:
- To discuss different types of information systems.
- To understand the integration of different information systems in producing more accurate and targeted information about customers, markets, suppliers and competitors etc.
- To explore the application of information systems in improving decision making capabilities of a business.
Types of information system
The different types of information system are identified by a process of classification. Classification is a simple method by which things are categorised together so that they can be treated as a single unit. The classification of information system in various types is a useful technique to design system and describe their application. A category of information system is a simple concept which is created to simplify a tough problem by identification of areas of commonality between various things (Jerman-Blažič and Tekavčič, 2012). The following are the types of information system are as follows:
Transaction processing system: To meet the functionalities of the core operations of a business such as data collection, storage, processing and outputting transaction processing system is used. This type of system gathers data form user inputs and then produce outputs based on the data which is collected. For ex: TPS system for online air ticket booking system. Under this system travellers select their flight schedule and their favourite seats( the input), the system updates the list of the available seats, removing those selected by the traveller (the processing). After this the system generates a bill and a ticket copy(the output). This system can be based on real time or real batch processing and can support the business owners to meet the demands and needs without having additional employees (Conde, and et.al., 2014).
Customer relationship management system: To synchronise sales and marketing efforts business owners use customer relationship systems. It accumulates and track customer activities, consisting purchasing trends, product defects and customer queries. The abilities of a typical CRM information system offers the customers to interact with companies for service or product feedback or problem solutions (Sittig and Zuckerberg Facebook, 2010). Business firms also use this system internally as a constituent of their strategies of collaboration. This system offers the business partners to connect with each other for developing ideas and products. Even if business partners are in remote locations then also collaboration can take place in real time.
Business intelligence system: It is a complex system because it identifies, extracts and analyses data for different operational needs, mainly for decision making purposes. It provides the analysis which predicts future sales patterns, summarise on going costs and forecast sales revenues. This system gather data from different data warehouse in an organisation and provide management with assessment as per lines of business, department or any breakdown that management wishes. Ex: Financial institutions use these kind of system to build credit risk models which analyses the number and extent of giving credit credit to different sectors. To determine the possibility of loan defaults this system may apply various techniques and formulas (Singer, 2012).
Knowledge management system: This kind of system organise and dissect knowledge and then redistribute or share it with people in the firm. The motive of this information system is to introduce innovation, enhance performance, bring integration and retain knowledge in the organisation. These systems are particularly marketed for large business firms, but even small enterprises can enjoy it benefits from harvesting knowledge. This type of system offers as central repository and retain information in a standard format. It aids the business firm in maintaining consistency and enables quick responses to customer and partner queries (Unger and Eppinger, 2011).
Integration of information system with decision-making capabilities
The kind of information needed by the decision takers in an organisation is directly linked to the level of management decision making and the amount of structure managers face in the situations arising in the decision-making procedure. The levels of management decision-making which should be aided by the information technology in a successful organisation are mostly shown in a pyramid form.
Strategic management: As part of strategic planning process, top managers develop overall organisation goals, strategies and policies and supervise the strategic performance of the firm and its overall direction in the political, economic and competitive business environment (Van Turoff and Hiltz, 2014).
Tactical management: Under this level the business unit managers and business professional within self directed teams formulate short and medium range plans, schedules, budgets and define policies, procedures and organisational objectives for the sub units of firm. Allocation of resources and monitoring the performance of organisation sub units which consists of department, divisions, process teams, project teams and other work groups is also done at this level.
Operational management: Development of short range plans such as weekly production schedules is done by the operation managers and members of self directed teams. They also direct utilisation of resources and performance of tasks as per the procedures and within budgets and schedules established for the teams and other work teams in the company.
The application of information system in various department is elaborated here:
Finance department: For this department financial management information system can be applied to support the finance managers or chief financial executives in taking efficient and reliable decisions. It aids in generating all the financial reports, their trends, and other related details. All these information is used by the finance managers for taking decisions regarding raising finance, sources of funds. These decisions must be beneficial for the organisation (Van Turoff and Hiltz, 2014).
Marketing department: A marketing management information system aids in carrying out various functions in the department. The subsystems in this information system are product development, delivering within the time limit, advertisement and promotions, sales analysis and product pricing.
Human resource department: The application of information system in an organisation enables easy management of payrolls, employees attendance, salary sheets etc. It helps in analysing the costs which is incurred on the employees and accordingly their productivity can be judged.
Application of information system to improve decision-making capabilities
As discussed in the above parts, information system is an integral part for any business enterprise as it supports the organisational goals and mission. For improving the decision making process capabilities in the organisation the following ideas are proposed:
Increase in processing efficiency: If the efficiencies in processing will increase then it will aid in effective completion of the daily tasks and activities like cash collection, invoicing, expense approvals etc.
Better communication: All the employees in the organisation must be communicated on time and updated with any changes, if made. This will make the flow of communication smooth and better which will make the decision-making process easy (Mithas and Sambamurthy, 2011).
Minimising risks of errors: The risks associated with the decisions should be reduced as it will affect the consequences of the decision. By effective use of information system many mistakes can be avoided as compared to work done by human hands.
Reducing information overload: The information collected in the system must be accurate, specific and as per the requirement only. If unnecessary information is stored in the system then it will affect the decision making which can reap negative results.
Single and safe location: The information should be gathered in only one information system as it is comfortable for the users to access the information. This will ensure that the information which is confidential, do not go outside the firm (Bulgurcu Cavusoglu and Benbasat, 2010).
Support planning: The information system must aid the planning of the organisation. The plans are formulated according to the information available to the planners. This affects the planning team in making plans as if any single information or data is wrong, it can result in disastrous outcomes.
Encouraging decentralization: The information system must support the lower level of management in the organisation. It will be successful only if it is useful for the lower levels as they are the foundation in an organisation.
Coordination:The information system must support in cooperation among the different departments and functions of the organisation. It will enable firm to make the decision efficiently so that every department is receiving its advantages.
Every organisation devotes its time and resources to capture, store and process the information which is used in operations and decision-making. The information system are the major resources for an organisation. Larger use of information and technology is mostly connected with improved availability of information, productivity, quality of work, effectiveness and efficiency in achieving tasks, subsequent reduction of costs. It leads to creation of new products, new services and channels of distribution within traditional industries, along with innovative business models and whole new industries (Borghoff and Pareschi, 2013). Information and technology contributes in income generation and poverty minimisation and enables people and organisations to grab economic opportunities by increasing process efficiency and promoting participation in extended economic networks. It enhances the business decision-making and service quality or increase efficiencies and productivity and thereby increasing profits. Also it involves changes to the organisation. The business firms can reduce operational costs by decreasing material, can also use more and better information to improve the product's value and to make reliable and better decisions. These features shows that information and technology has the capability to become a strong enabler of development of business firms. Companies use information system in many ways to minimise risks and support management in making decisions. There are three purposes of using information system: handling the present, remembering the past and preparing for the future. The major job of decision-maker is to make decisions and information processed by information systems is related to decision-making. Business activities and functionalities cannot be performed without the use of information system technology and managers cannot make qualitative and reliable decisions (Galliers and Leidner, 2014). This implies the relationship between information system and decision-making process. It is a system to convert data from internal and external sources into information and to communicate that information in a proper and systematic manner to managers at all the levels in all the functions so that they can make decision effective and on time for making plans and control activities for which they are accountable. They play a vital role in aiding all types of decisions i.e. structured, semi-structured and unstructured.
Conclusion and Recommendations
Form the above study, it can be concluded that information system plays a crucial role in success and growth prospects for any business organisation. Through this system companies process the data gathered from various sources with the motive of generating information which can support in taking key business decisions. It is considered as a part of communication under which data is collected and shared with other departments of the enterprise according to their needs and demands. It aids in improving the present communication level and system in the organisation (Tallon and Pinsonneault, 2011). For ex: Emails is a type of information system through which employees and managers exchange information and communicates. In this users attach their information in the form of files, folders, images etc. It is a very easy, simple and comfortable way to communicate and share information in the firm. Along with this, information system assists organisation to maintain several operational activities in functioning the business in an effective way. For instance, to gain cost benefits over rivals or to differentiate products and services from competitors or providing quality services to the customers, organisation applies different kinds of information system as per their requirement and suitability. By processing the sales data, it provides insights to management about purchases made by the customers and determines the level of stock that needs to be maintained for meeting the demands made by the customers. Therefore, it can be said that information system aids business companies in streamlining the operational activities in effective manner (Galliers and Leidner, 2014).
Further, on the basis of current study, it can be concluded that information system supports the business firms to take better decisions and helps them to a large extent in conducting the day to day tasks effectively. The results received from the following method helps companies in choosing the right course of actions from various available options and performing accordingly. These information system delivers the updated information to the organisation so that they can select the right and best one to carry out their tasks and activities. This system works in diverse situations and offers various types of information like costs, prices, profits and sales. Moreover it is summarised from the above study that there are several reasons which shows that information system is significant for business enterprises (Galliers and Leidner, 2014). The primary reason is their relevancy in which the characteristics meets the needs of its users. They can easily access relevant and correct information. Second reason is quality of the information system in which the processed data generates qualitative content. It supports the business companies in taking correct and reliable decisions. Apart from this, by applying information system management can easily retrieve internal information. It enables the firm to collect data from different department without relying on them every time. It aids in close monitoring of information storage and application in various areas with full safety and security. There are different kinds of information system based upon the classification process. This classification is further formed on the designs and applications of information system in the business world.
These systems are designed to fulfil the needs and demands of top management, middle management and operational management. Operational support systems offers assistance to carry out the day to day operations effectively and efficiently. It is particularly designed to meet the needs and demands made by the operational or lower level of management (Bloom, 2014). They are formulated in such a manner that they satisfy the information needs of front line managers, supervisors and operational managers effectively. Transaction process system fulfils the needs of collecting the data, processing the gathered data, storing it and generating output for major business operations. They are developed to carry out the routine business transactions in an effective manner. Knowledge management system is designed to enhance the knowledge level of people in the organisation. It is advantageous for both large firms as well as small enterprises. It helps in enhancing the current level of knowledge, building innovative ideas in their minds, bringing creativity etc. Based upon the several limitations and loopholes in the above information systems, here are some suggestions to overcome these negative implications:
Developing technology usage agreement: Under this a business firm can carry out a technology usage agreement with its personnel. It will be consisting of various features such as limitations in downloading, web suffering, data secrecy, data access etc. By restricting some particular websites that can cause in the computer system, privacy and security can be assured. Apart from these, prohibiting various sites such as gambling or file sharing, business enterprises can keep check and control over management of information (Mookerjee Mookerjee Bensoussan and Yue,2011).
Building a comprehensive plan for technology: In this, a systematic replacement of outdated technology workstations will be done by evaluating application of the present emerging technologies. It is very important for every business organisation to keep their information system updated, if not done so, then it the organisation can't get the competitive advantages and will lack behind in the rapidly changing technological environment. It will give a basic idea to the business firms as to how the information system will run in right ways and how it will react to the changes in the technologies.
Product development: Information technology can speed up the time taken in reaching the market. Business firms can write product needs and demands by collecting market intelligence from proprietary databases, customers and sales representatives. Computer supported design and manufacturing software speeds up the decision-making.
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Stakeholder integration: It is another major recommendation to improve the information system. Business companies use their investor relations websites to communicate with shareholders, research analysts and other key stakeholders (Pearlson Saunders and Galletta, 2016).
Process improvement: It is another key suggestion to bring improvements in the information system. It will allow managers to revise sales, costs and other operating metrics in one single software platform generally in real time.
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