Advantages Presented by IOS Systems - Assignment Example

Management Information Systems Question Decision making and information systems that are related to it all have different impacts of the decision making process thus the person making the decisions to be aware of the following; complexity, a set of alternatives available, uncertainty, high risk consequences and finally interpersonal issues. Maghrabi and Vidyaranya Gargeya (p.53) define inter-organizational systems (IOS) as automated information systems that are shared by two or more firms. The most common form of inter-organizations system is electronic data interchange which enables instantaneous computer to computer information transfer. Advantages presented by IOS systems Advantages of IOS include: it allows the flow of information in an automated manner between organizations so as to attain the desired supply-chain management system, thus enabling the development of a more competitive organization. Secondly, it forecasts the needs of the client and the delivery of services and products. Thirdly, IOS is helpful in better management of buyer-supplier relationships by incorporating the full depths of the tasks that are linked with the business processes company-wide. By engaging in these activities the organization is able to increase the production rate automatically; thereby, optimizing communication within all levels of a firm as well as between the supplier and the organization. As cited by Haag, Cummings and McCubbrey (26-27) to the other advantages of using IOS include: it reduces the risk in the organization; encourages global communication; overcoming the barriers that are associated with investment; benefits from the exchange of technology; it raises the levels of competitiveness; pursues economies of scale; it reduces the communication cots while at the same time extending the possibilities of coordination; and lastly, benefit from the exchange of technologies. The other benefit is that since the internet is also part of the IOS application to be used in the business, it is being utilized as one of the core networking platform in both upstream and internal supply chain. The utilization of the internet has numerous opportunities for reduction of costs, service improvement, and greater agility and flexibility in the supply chain. The use of the internet in downstream manufacturer and customer brings a number of benefits, for instance, increased productivity, improved profits, and allows the organization to customize their customer services which will improve the overall value and competitive position. The use of the internet upstream of the supply chain leads to increased coordination, movement of goods from the supplier, and communication. Internet use allows the clients to order personalized products. It also makes it possible for the information to be readily available along the distribution chain. The challenges unique to inter-organizational systems On the other hand, the challenges associated with IOS include: data insecurity by intruders hacking into the organizations’ databases and having access to confidential information in relation to their operations. This would jeopardize the operations of the effected parties. The partners are usually concerned with if their competitors would have access to the information about the business dealings in the organization. Secondly, mismatch of skills for the people that are working in IOS enabled organization. The other challenge is inadequate technology infrastructure. Fourthly, the other challenge is that internal control systems and audit measures for IOS are usually not well developed. This is because it involves a lot of contractual procedures and legal aspect which need to be considered so as to evaluate the risk of information exposure and fraud. The other challenge according to Turban, Volino and Wood (87) found out that in spite of the clear benefits of the supply chain integration, its adoption is not widespread, and has even decreased in some organizations. IOS adoption usually take place as a response to short term pressures rather than being the outcome long-term goal setting and strategic planning. Lastly, the implementation of IOS has been found to lack cohesion, forward thinking, and strategy. In its place, the managers usually focus on short-term firm benefits, rather than on strategic supply chain management. How to address these challenges Data security is addressed by installing various security measures since the trading partners are usually concerned with safeguards that are in place to protect their trading information. There is presence of proper security measures which ensure that a partner has access to information that is only related to its operations. With regard to mismatch of skills and knowledge, the concerned parties need to be adequately trained on how to handle the IOS. This will make sure that they are well equipped with necessary skills and knowledge to operate the IOS. The organizations need to invest in technology infrastructure by employing the services of technology experts. The risk of information exposure and fraud can be addressed by employing comprehensive security procedures which will ensure confidentiality and reliability of information. The organizations need to ensure the passwords to the computer systems are only accessible to few trusted people. With regard to fraud, the IOS systems need to ensure partner confidentiality and customer trust to their systems. The challenge of poor adoption by organizations can be alleviated by creating awareness of the importance of IOS since it reduces the cost of communication and enables sharing of information on a digital platform. Firms that have been found to use IOS have indicated higher levels of growth both at operational and financial levels. So as to ensure the implementation of IOS it need cohesion, forward thinking and strategy, in addition the managers need to focus on strategic supply chain integration. Question 2 Define the concept of a digital economy Conduction of business in the digital economy entails the use of internet based system on the internet and other internet enabled electronic gadgets to do perform some of electronic commerce. The digital economy as defined by Turban, McLean and Wetherbe (23) refers to an economy that is actually based on the digital technology, for instance digital communication network such as intranets, internet, computers, private value added networks, and other related information technology. Forces that have led to the existence of digital economy The forces that have led to the existence of the digital economy are the growth, integration, and sophistication of the information technology. Most consumers are now routinely utilizing computer’s networks to establish sellers, compare their prices, evaluate products and services, and extra market leverage. Besides, most business entities are using the internet network more extensively to conduct and re-invent the production processes, streamlining the procurement presses, and reaching out to untapped global market, as well as managing internal operations. The other common feature of digital economy is the intense use of data, especially personal data, which constitute a major resource of the digital economy. This data enables organizations that collect them to measure and improve the performance of an application, to recommend products to their clients, and customizing their services (Tapscott 56). The other relevant forces that have enabled the development of digital economy include: the architecture of the internet and other related network technologies; the regulation of informational content on the internet; the framework of legal rules that are required to create and buttress the new and ill-defined markets in cyberspace; and lastly, the government policy in relation to the profound and increasingly vital and visible social issues raised by the growing importance and ubiquity of the digital communications (Tapscott 59-60). The core sub-sectors that have propelled the growth of digital economy include: (1) highly digital goods and services; goods are delivered digitally, although a significant portion of the services are delivered digitally such as journals, music sales, software sales, and online communication. (2) Mixed digital goods and services which include retail sale of tangible goods, for example books, flowers, secure banking, travel and hotel reservations, and online sales. The production and distribution system for the tangible goods can actually be similar to the one used for mail catalog sales, although the internet proven to be the major sales channel. (3) The digital economy has tremendously grown due services that critically rely upon IT to be offered. For instance, most of accounting and complex engineering designs are services that depend on IT to conduct and improve its process. This sub-sector represents a major part in IT subsectors since it provides goods and services that totally reliant on IT (Gumaha and Jamaluddinb 378-379. How digital economy is viewed progressing in the near and longer term future Long before the internet was conceived as a commercial service, it was reserved for particular business functions. However, from the 1980s the commercial aspect of the service has really grown up to the 21st century. The internet has revolutionized how we do business and our way of life. As a result, the digital economy is playing a very significant role in our global economy. It is now viewed as a core element in the economies of almost all the countries. The digital revolution has given rise to a digital economy that challenges our concept of value creation. The digital economy is based on conventional production and distribution of goods and services on a digital platform. Because of the increased importance of the digital economy, Bakos and Brynjolfsson (37) points out that digital economy is seen to be growing at very fast rate with the recent advancements in internet technology. It has also become an intimate part of millions of people’s lives, thus showing that digital economy is deemed for further growth in future. The digital economy based industries as well as other forms of internet technology enabled business activities have been predicted to be the next significant sources of economic growth in the next decade. This includes the IT industry itself, digital delivery of goods and services, electronic commerce, and the IT-supported retail sale of the tangible goods. Given its expected large influence, traditional organizations are actively assessing how to respond to the changes that have been brought about by the digital economy. Besides, for corporations, their response timing is very vital. Banks are innovating and utilizing digital tools to enhance their traditional business. Governments are also investing in the digital infrastructure. Question 3 Discuss the role of client departments in an organization Customer service is a very crucial to any organization for many reasons. First and foremost, it is difficult for a firm to survive without customer care. Haag, Cummings and McCubbrey (231) point out that the role of client departments in an organization include: The customer care department solves and offers services to the organization’s clients. This is actually what makes an organization to get more clients, otherwise if the customer service department’s employees fail in their duties the firm would be compromised on crucial things, for instance customer base and sales. Secondly, customer service acts as a link between the customer and the company. Thirdly, a firm with better customer service has a higher probability of getting repeat business from clients. Next, the client department is tasked with handling the complaints launched by the suppliers. In that sense, they also receive feedbacks from the customers. This is made possible through informational communication. Fourthly, they are obliged to market the organization by offering quality customer service. Next role is that they are required to ensure they maintain the firm’s revenue in down economy. This is attained by retaining the clients in both the good and bad economic times. Lastly, the customer service department is tasked with developing and maintaining a network of trusted customers. This is because a without a network of trusted customers who will test your products, you will be obliged to invest in extensive market research so as to learn how to better target your goods and services (Cummings and Worley 89-93). The challenges associated with role of client departments in an organization One challenge that faces the client department is lack proper training and knowledge on handling of customers. This may lead to loss of customers and revenue due to poor quality customer service Some of the employees are actually not trained on having a natural way of portraying friendliness and willing to assist every irrespective of their problem. This impact negatively on the firm’s image as the front office staffs act as the image of the company. The firm may also be faced with shrinking customer base if they relay poor quality customer service. Next, the changing dynamics in the market and globalization are altering corporate structures. The of IOS means more customer support operations and processes are shared across multiple environments and locations. Therefore, the advent of virtual environments has made it difficult to manage staff that is not seen. Another challenge is increased selection and competition to retain the existing customers. This is because with the advent of the internet technology consumers have a wide range of choices since accessibility of market information has become easier. As a result, the organization is obliged to spend more time figuring out better marketing channels. How to mitigate these challenges or issues To mitigate the challenge of virtual employees management, a strong change management, a culture of iterative measurement, key performance indicator selection, and optimization can assist alleviate these issues (Zaibak 56). The organization needs to invest in training and development of the client department employees so as to acquire up to date skills and knowledge for handling customers. The staffs of the client department need to be trained on inter-organizational systems which will enable them share client information with other firms. This would lead to better service delivery in the client department. The organization also needs to offer both financial and non-financial rewards since they form the basis of staff motivation and staff retention. As a consequence, there would be a generalized increase in employee performance thereby increasing the firm’s revenue. The employees would be motivated to figure out ways of keeping the existing customer, while at the same time figuring out how to cost-effectively reach for new customers. The client department needs to segment the firm’s customer base into groups with same characteristics. This would enable the organization to better understand their clients and formulate the value proposition accordingly. The degree to which such segmentation is obtained is reflected in a firm’s commercial side structure. The segment balance has numerous long lasting effects on the direction of the firm’s optimization efforts as well as the ultimate competitive advantage. Question 4 Decision Support Systems and Executive Information Systems, and how these systems contribute to the decision making process in business organizations. The management decision making systems consist of the following: executive information system, decision support system, management reporting systems, transaction report systems, and office information systems. Figure 1: Types of Business Systems (University of Technology, 2007: 5). The management information system is a major tool for creation of new products, services and business models. It also improves making of decisions by managers (Laudon and Laudon 7-10). So as to make effective decisions, executives require accessibility to high quality information. Such information also needs to be relevant to the variables that affect the outcome of the decision, timely, accurately, and up to date. In addition, it is required to be accessed easily and presented a way that it is easily comprehended. The executive information systems (EIS) are a reporting application that is commonly used by executives. EIS is a decision support system utilized by senior executives in the process of making decisions. It does so by providing easy access to crucial information and data required to attain strategic goals in an organization. Most of the EIS have graphical displays an easy-to-use. The aim of EIS is to provide fast and easy information access from various sources (Saaty and Vargas, 112-119).The EIS can be used in various kinds of organizations to monitor the performance of the firm and to determine the problems and opportunities.EIS is considered to be specialized form of decision support systems. The advantages of EIS include: easy for upper-level executives to use, since computer experience is not required in operations, offers timely delivery of the firm’s summary information, information provided is better understood, provides timely delivery of information for the management can make prompt decisions, and enhance tracking of information. On other hand, the disadvantages of EIS consist of the named factors: it is system dependent, there is limited functionality, information overload for some managers, benefits hard to quantify, and the system may become sluggish and tough to manage. Figure 1: Model of an Executive Support System (Laudon and Laudon, 212). On the other hand, the Decision Support Systems (DSS) are usually interactive information systems that help the decision maker in approaching ill-structured problems by provision of analytical models and access to databases. DSS were typically designed to support the decision-making process, rather than to offer a decision. The core advantage of these systems is flexibility (Turban, Volino and Wood 90). Some of the problems that DSS can assist solve include the following: problems that individuals in organizations experience vary in terms of how structured the problems are; this means the level unto which a solution procedure can be stated to them; the major domain of DSS is providing support decision making for semi-structured problems. DSS are also used in helping the decision maker facing an unstructured problem, most of the time injecting the required necessary factual grounding via access to data; decision making to solve unstructured problems, although when available within a narrow domain (McNurlin, Sprague and Nolan 78-85). When using the DSS in the process of making decisions, it is comprised of four steps namely: intelligence- a search of the environment is formulated to establish and define the problem; design- development of various alternative solutions; choice- the alternatives are compared to one another; and finally, implementation-solution is actually tracked and implemented, in an order to be later improved on. Figure 2: Components of the DSS (Saaty and Vargas 45). How DSS and EIS systems may be used in supply change management and customer relationship management The DSS can be used in the supply chain to make decisions that will help manage the firm’s relationship with the suppliers. With proper utilization of DSS it will also help the organization’s goal of the right amount of products to customer destination with the lowest cost and least amount of time. When the DSS is integrated with customer relationship management systems, they provide information that will coordinate of all the business processes that deal with customers in marketing, sales, customer retention, and customer satisfaction (Power 123-125). EIS can be used by the manager to support upper management planning of the firm’s strategic direction or assist manufacturing in controlling the operations of the plant. As a result, they also assist in recording routine transactions required to transact business, for instance, shipping, and fulfilling the customer’s sales orders, as well as office automation which will enhance the productivity of the office personnel. EIS also help in improving the supply operations of the firm. Bocij, Chaffey, Hickie and Greasley (120) assert that both the DSS and EIS systems enable a more efficient management of the supply chain by integrating the links in a supply chain. This may include retailers, manufacturers, suppliers, final customers, and wholesalers. Works Cited Bocij, P., Chaffey, D., Hickie, S., & Greasley, A. (2006). Business Information Systems:Technology, Development and Management for the E-Business. New York: Financial Times/Prentice Hall. Bakos, J.Y. and Erik Brynjolfsson, "Information Technology, Incentives and the Optimal Number of Suppliers," Journal of Management Information Systems, 10 (2), 37, 2003. Cummings, Thomas G. and Christopher G. Worley. Organizational Development and Change. Belmont: Cengage Learning, 2009. Gumaha, Mohamed E. and Zulikha Jamaluddinb. What is the Digital Economy, and How to Measure it. Masters Thesis. Kedah: Faculty of Information Technology;University Utara Malaysia, 2004. Haag, et al. Information Management Systems for the Information Age . Sidney: McGraw-Hill Ryerson, 2006. Jain, T., Trehan, M., & Trehan, R. (2012). Busines Environment. Darya Ganj New Delhi: FK Publications. 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