Enterprise Information Systems - Assignment Example

? [School] Number] June 4, QUESTION Challenges facing Inter-organizational systems (ISOs) An inter-organizational systems (IOS) is a system that provides a technological infrastructure that facilitates the flow of information along the supply chain and thereby ensuring the smooth flow of goods. The main challenge facing this systems is the heterogeneity of the organization’s own IT architecture. Most large organizations implementing such systems use a variety of different Enterprise Resource Packages (ERPs) to facilitate the operation of different parts of their business. Each of these ERPs have their own unique infrastructure of the operating system, interfaces and databases hence making the modification of new inter-organizational systems to suit with the available ERPs expensive and time consuming. This leads to reluctance of the business partners in integrating with these inter-organizational system. (Chuo & Vincent, 2008, p.117-118) The second challenge facing inter-organizational systems is heterogeneity of the IT environments, technical skills, and financial resources of its trading partners. Most companies in an extended supply chain have the ability to some type of electronic transmission e.g. Electronic Data Interchange (EDI), file transfer etc. but with varied specific capabilities. Many small suppliers, may not have the internal infrastructure required to adopt the IOS. Therefore, each of the business partners will, have to incur cost of converting their infrastructure to comply with the new inter-organizational system. With the partners adopting the new infrastructure, they would benefit from the ability to use the same approach to connect to any other business partner or even to disparate internal systems. However the implementation of these new architecture will require time, money, and technical knowledge that not all partners might be able or willing to commit to. (Chuo & Vincent, 2008, p.117-118) Solutions to the Challenges For the organization to succeed in encouraging its business partners for an electronic integration with its heterogeneous IT architecture, there has to be way of insulating these partners from the complexity and dynamism of its enterprise IT architecture. Therefore, the solution here is to create a reusable middle-ware platform to enable passing of standardized information between its backend systems and those of the business partners. This platform will also ensure that the initiator is also insulated from its business partners’ changing technologies which they use to connect to the initiator. (Chen &Chin, 2006, p.87) The solution to heterogeneity of the infrastructure of the business partners will be to not requiring each of the business partners’ upgrade to the new architecture but give them a range of options of electronic transmission to choose from i.e. EDI, File transfer and any other suite for web-based transactions. The development of a platform for managing these IOS will requires outsourcing so as to help in standardization on a single technology e.g. web-based service hence reducing the costs associated with developing and running the platform by themselves. (Chen &Chin, 2006, p.87) Advantages of Inter-organizational systems Adoption of IOS can create new ways of achieving vertical integration apart from merging the firms. IOS reduces the transaction cost between the buyer and the seller and when this occurs, technology could be a catalyst in altering the optimal size of the firm hence allowing it to focus on its main core business without worry on the high transactions costs with the partners. The IOS has advantage of promoting highly coupled relationships between the trading partners in the supply chain. This is driven by the need for total quality management where manufacturers and retailer must develop close relationships with the suppliers and realize their importance. This is necessitated by intense foreign competition that has resulted in a shrinking market hence need for close relationships or both sides go out of business. (Turban, Efraim, Linda, Janice & Gregory, 2011, p. 235-273) Another advantage of this IOSs is that the benefits accrued due to the implementation of the system are shared among the trading partners that have implemented and are using the technology within the supply chain. Therefore, other small firms i.e. “followers” in the supply chain will enjoy the same benefits experienced by the initiator. It also advantageous and cost-effective for a firm to implement a direct line with a trading partner using IOS than utilize the value added network service provider. Implementation of the IOS also ensures improved data integrity for incoming communications due to automation. An IOS also enables buyers to use the electronic linkage as a window into the operations of its trading partners hence helping them analyze inventory flows. Lastly, an inter-organizational system in a supply chain management framework results in improved productivity for both the buying and receiving personnel. This is aided by a reduction in cost and time required to conduct the business transaction. (Turban, Efraim, Linda, Janice & Gregory, 2011, p. 235-273) QUESTION 2 Digital Economy A digital economy is an economy that is based on current digital technologies. It can sometimes be referred to as the new economy, Internet economy or web economy. The main components of such an economy are the supporting infrastructure e.g. software, hardware, networks etc., e-business that defines how business is carried online and e-commerce that involved online transfer and shopping of goods. The scope of this economy is all about competing for the future, a larger capacity to offer new services and create new and unique products and ability for transformation of current business into new entities that may just be obsolete a few days after tomorrow! (Castells, 2010, p.79) Forces that have led to the existence of a Digital Economy The existence of these digital economy has been driven by various factors. These include; Quest for knowledge The new economy is a knowledge economy that has been mainly enabled by advances in information technology. There is significant growth in the knowledge content of major products and services. Ideas and information and technologies have become part of the products. This has led to emergence of smart products which has continued to revolutionize most aspect of the economy i.e. smart clothes, smart cards, smart houses, smart roads, smart phones and other smart products. These smart products are more appealing to people since they make their operations easier hence leading to the existence of an economy characterized by smart products. (Castells, 2010, p.81-88) Digitization The new economy has been characterized by all the commerce affairs, human communications, business transactions and all the science insights have been reduced to simply charges on a silicon particle. In the digital economy, information is sent in digital form and communicated through digital networks. This has opened a world of possibilities that support the existence of the digital economy. This has enabled vast amounts of information to be sent at the speed of light, enabling combination of different forms of information and sent over a single channel. Information can also be stored in the cloud and be accessed by many people from across the world simultaneously hence enabling business carry out their transactions easily across the world. Therefore with digitization and its advancement, the digital economy will continue to exist and thrive. (Castells, 2010, p.81-88) Virtualization The metabolism of the digital economy is characterized by information shifting from analog to digital and the physical things becoming virtual. With the many advancements in cloud computing, people are working and participating in building a country-specific economy when they are located in a different economy. Business executives can also hold virtual meetings from virtual offices at any part of the world. The new economy is also a networked economy where different sectors are inter-networked into clusters for the purpose of creating wealth. The bandwidths of these networks has been improved in a way that it supports full multimedia and hence opportunities for such an economy has grown dramatically. This has supported the existence of a digital economy since activities involving building of such an economy can be done virtually. (Castells, 2010, p.81-88) The progress of the Digital Economy in the near and long-term future The digital economy is driven by the power of the Internet. In 2006, there were only 309 million Internet users in the word but this number has doubled to date and is expect to triple in two years to come. In most countries, 85% of businesses have Internet connection. These anticipation in broadband penetration will have a direct impact in the growth of digital economies across the word. This is so because the effect of Internet penetration will lead to a series of innovations in the ICT industry leading to new opportunities hence increase in GDP of these economies. There is also anticipation in the increase in broadband speeds with less prices hence cutting down the cost of doing business. (Ray & Rinzler, 2003, p.235) The digital economy will in the future be characterized by more learned people since the penetration of the Internet, digitization and smart devices is expected to increase and this will create new opportunities in the education sector. New technologies like smart glasses and augmented reality will have a positive impact in educational transformation. Therefore with developments in the digital economy, there is future potential in improvement of relationship between citizens and the government enhanced by the e-government initiative. The future of this economy will also see improvement in health care. With the availability of Internet and high speeds, searching for health related information will be made easy both by individuals and medical practitioners and also see adoption of telemedicine. (Ray & Rinzler, 2003, p.235) QUESTION 3 The role of client departments in an organization In Brien and Marakas, (2011), the basic functions of client departments in an organization with respect to information technology include: Manufacturing and production. This department is concerned with purchasing of materials, quality controlling, ordering of materials and parts, paying for labor, making schedules for shipments and receiving them. Accounting department This department is responsible with drafting and management of accounts receivable and payable, general ledgers and making budgets. The accounting systems used ensure the account balances are kept up to date, the funds are dispersed correctly and generation of post statements. Finance Department This department is responsible for cash management, credit management, organization asset management, generation of financial statements reporting and ensuring that they comply with federal, industry specific and other government agencies regulations. Sales and marketing department This department is responsible for setting of prices, promotions on social media, carrying out market research, tracking the demand forecasts and carrying out sales campaign, tracking and progressing orders both online and mobile. Human resource department This is responsible for management of the organization's payroll, carrying out hiring and recruitments and ensuring this employees are compensated correctly. It also prepares employee benefits, training and performance appraisal and ensuring employee compliance with federal and state employment regulations. Operations management This department is responsible for all the processes that are aimed at transforming input to useful outputs. The production and operations management covers diverse activities and this differs from one industry to another depending on the activities in which they are involved in. Challenges related to the roles of various client departments All the departments discussed above employ some management system in carrying out its roles. However, these systems do face some challenges. For instance, the human resource that applies the use of human resource information system (HRIS) faces a challenge of resistance to change. This happens when normally employees are used to a manual system and are there is a requirement to upgrade. The installation of a new system can be faced with resistance especially when it may require employees to acquire more skills. (Brien & Marakas, 2011, p.12-15) In a word where the marketing technology is getting more sophisticated every day, buyers have become more difficult to engage. This has posed the biggest challenge in sales and marketing departments in many organizations. Therefore the biggest challenge facing the market strategies of modern organizations is how to remain consistent and focus on the execution of the strategy. (Brien & Marakas, 2011, p.12-15) The challenges facing the manufacturing and production departments is dealing with intense global competition, handling the pressures related to costs, finding and keeping skilled labor and adapting to ever changing consumer needs. With the effects of globalization, manufactures are expanding so as to have access to the developing markets. Companies move to produce their goods anywhere in the world as long as there are materials, skilled labor and also low labor costs. This has therefore led to stiff competition among the organizations. (Brien & Marakas, 2011, p.12-15) Solutions to these challenges The problem on how to stay focused and execute the strategy facing the marketing departments can be solved by having a good execution plan, taking down the risks and challenges posed and measuring which will work and which will not. The solution to the challenges facing the manufacturing and production departments could be merging and acquiring other like-minded corporations so as to help in strengthening its position in the market. These helps in combining the assets of the companies involved and hence curbing competition. The problem of handling cost pressures can also be handles by relocation of the company's production to regions where this costs are low and also incorporating new and recent technologies and innovations in production. (Brien & Marakas, 2011, p.18-21) QUESTION 4 Decision support systems (DSS) and Executive information systems (EIS) Decision Support Systems are a class of computer information systems that help organizations and businesses in their decision making tasks. It is mainly an interactive system that helps in assembling and compiling useful information from personal knowledge, raw data and business models among others. Its components include database, software system and the user interface and as thus they are a lethal combination of advanced analytical models and tools coupled with user friendly software. The result is a single powerful and robust system that facilitates either structured or unstructured decisions. A DSS can either be model driven or data driven. (Turban, Efraim, Linda, Janice & Gregory, 2011, p. 65-68) Executive support systems are software based information systems that are mainly used as a reporting tool. They take organization data as inputs and transform it into helpful summarized reports. They are designed to be helpful to executive level management personnel. It enables them to have a faster access to reports originating from different company levels. They also have tools that can predict a trend of outcome of performance over time using only the input data. This is of great use to executives since it provides likely outcomes and fast reference to statistics and figures required for decision making. An EIS only provides specific data that are of use to executives and not every data about the company. (Turban, Efraim, Linda, Janice & Gregory, 2011, p. 56-63) Both DSS and EIS are organisation information systems that are geared towards efficient information handling and utilization by the relevant personnel. An ESS can conceptually be viewed as a specialized form of DSS. The term ESS is increasingly losing popularity and is being referred to instead as business intelligence. (Chen &Chin, 2006, p.32) Contributions of DSS and EIS to decision making A Decision Support System can help in support decisions of areas such as supply chain management, asset utilization, management of customer relationship and pricing. A group DSS can be used for people working in groups to gather information, idea organization and priority ranking and settings in addition to meetings documentation. It helps decision makers reach a decision efficiently. It also increases the productivity of such meetings of groups. (Brien & Marakas, 2011, p.68-81) An executive Information system helps managers to solve unstructured problems that arise at the firm’s strategic level. It uses both external and internal data sources to provide data and a communications and computing environment that can be channeled and focused on a dynamic problem array. It helps senior executives in identifying opportunities, trend forecasting, problem spotting and performance monitoring among others. They have the capability to leave out non-essential details and also narrow down to detailed data on transactions when required. They are of great importance in availing business intelligence and environment scanning which aids executives to detect strategic opportunities or threats from within the firm’s environment. It saves a lot of valuable time for the executives. (Turban, Efraim, Linda, Janice & Gregory, 2011, p. 55-73) Both DSS and EIS make use of data from technologies like online analytical processing (OLAP) and data mining in addition to data utilization from enterprise applications. They are specifically designed to aid a company’s personnel make better decisions. However, they do not always satisfactorily do so since they are limited by the quality of information, organizational inertia and management filters. (Brien & Marakas, 2011, p.68-81) Applications of DSS and EIS in supply chain management and customer relationship management DSS are used in Supply Chain Management (SCM) to help in arriving at decisions on how to respond to ever changing market conditions. Both DSS and EIS in combination with other factors are necessary for the creation of a firm’s competitive advantage. DSS and EIS are sued to avail the appropriate information at required time to enable executives and decision makers make accurate and timely decisions. The DSS in SCM may be a communication, document, data, model and driven by knowledge i.e. there is no best known type. Flow of information in SCM is of great significance as it enables supply chain partners coordinate long term plans among other things. This crucial and mission critical role is played by the DSS and EIS. (Chen &Chin, 2006, p.43) Customer Relationship Management mainly entails the use of customer data to get the correct information to the right personnel at the exact required time. Knowing how to make these decisions and to forecast customer trends and identify opportunities is basically what is expected. As earlier stated, DSS and EIS adequately suffice these needs by taking data input from the enterprise applications. DSS can enable the senior managers to make vital decisions involving customers while EIS will provide specific customer information details as required by management. (Ray & Rinzler, 2003, p.165) Cited Works [1] Brien, James A., and George M. Marakas. Management information systems. 10th Ed. New York: McGraw-Hill/Irwin, 2011. Print. [2] Castells, Manuel. The rise of the network society. 2. ed. Chichester: Wiley-Blackwell, 2010. Print. [3] Chen, Chin. Enterprise information systems VII. Dordrecht: Springer, 2006. Print. [5] Cho, Vincent. "A Study of the Effectiveness of Electronic Document Management Systems." International Journal of Information Technology and Management 7.3 (2008): 327. Print. [6] Ray, Michael L., and Alan Rinzler. The new paradigm in business: emerging strategies for leadership and organizational change. New York, NY: J.P. Tarcher/Perigee, 2003. Print. [7] Turban, Efraim, Linda Volonino, Janice C. Sipior, and Gregory R. Wood. Information technology for management: improving strategic and operational performance. 8th ed. Hoboken, NJ: John Wiley, 2011. Print. Read More