SWOT Analysis of PACH Co, Its Information System Management - Case Study Example

College ISM_BIB4 6/10 Answer Transaction Processing System: Any exchange between two parties that is recorded and stored in a computer system and makes changes to a certain database is known as a transaction. Examples of a transaction are booking of an airline ticket, withdrawal of cash from ATM, purchasing an item from the website of a store and so on. An Information system that is needed to collect, process, store, display, modify, or cancel transaction is known as the transaction processing system (Parsons and Oja, 2007). Transaction Processing systems often form the backbone of the Information systems within an organization. Examples of TPS systems include: Point-of-Sales Machines, Automated Teller Machines, and Purchase Order Systems etc. The Important characteristics of a Transaction processing System include: rapid response, reliability, standardization, and controlled processing. Transaction Processing systems are the most basic systems that serve the purpose of collecting data for the organization. It is the system that ensures that the transactions taking place in the organization are ACID (Atomic, Consistent, Isolated and Durable) (Reuter and Haerder, 1983). Often the data collected by TPS is not of much value in its raw form. However, the same data when processed and converted to information is then useful for all levels of managers for decision making. The data that is collected by the TPS is then used by other Information systems within the organization. Office Automation Systems: Office automation systems came into prominence during the early years of the development of the desktop computer industry. These systems are situated on the Local Area Network of an organization and allow the users to transfer data, mail and voices across the network (Farlex, 2010) in electronic format. Office automation systems consist of computer hardware and software such as a word processor, printer, telephone and voice input, database, business spreadsheets, graphics, e-mail and teleconferencing tools. The three activities that an office automation system is supposed to take care of are: data storage of information, data exchange and data management. For the continual operations of the business, it is necessary that office records and other primary documents shall be stored in an electronic format. Tools like word processors and spreadsheet applications allow users to manage data in the appropriate format. Other tools that are commonly used in office automation systems are collaboration tools like e-mail, desktop sharing, net-meeting etc. Image handling software enable sharing of information through visual means. Office automation systems are used in almost all the businesses that are in operation today. They are used by all the levels of managers in an organization. They often provide as a collaboration place for communicating information between the various levels of managers as well as the managers at the same level of hierarchy. With globalization and expansion of companies across countries, often the systems these days are connected over secured network and help people collaborate across locations. Knowledge Work Systems: With increased competition and the changing landscape of consumer preferences, the contribution of knowledge workers towards gaining competitive advantage has attracted significant interests. These are the workers whose primary input is information and produce distillations of this information. Knowledge Work systems are a class of information systems that enable knowledge workers to capture and organize information related to their work activity, learn, prioritize, and execute their tasks more efficiently. These systems are an integration of information management, workflow management, scheduling, and work measurement. The system provides an environment that supports efficient performance. The system enables companies to disseminate information specifically required for a particular task at the appropriate time. At the same time the system automatically initiates the various tools, agents and documents that are required to complete the task. Knowledge work systems improve collaboration between team members. Employees can retrieve and update milestones, task completion and priority status information. Management Information Systems: Organizations today produce large amounts of data. However, data in its raw format is not useful. It needs to be processed to information which needs to be communicated to appropriate stakeholders who then make decisions based on the information. Management Information systems are systems that transform raw data into information needed to take managerial decisions. MIS often form the central component of an organization’s Information system architecture. Examples of MIS include Financial Accounting Systems, Performance Management Systems etc. In most of the cases, the information needs to be shared amongst various departments. An MIS provides for an efficient and effective coordination tool amongst the various departments of the organization. The system results in quick, reliable, automated disbursement of relevant documents to the various stakeholders. MIS produce easily understandable, reliable reports that helps managers identifies useful pattern and trends that might not be easily reflected in raw data. MIS systems enable managers to have a better understanding of market, competitors, customers and the enterprise. As a result it can give useful suggestions to improve organizational processes. The end affect is that an organization that is having a streamlined MIS system is more reactive to the changing market dynamics, can produce better innovation and service and attract larger market share. A Management Information System is used my managers at various levels. Hence it is necessary that the system shall be aligned to the organization’s long term strategy. Decision Support Systems: In certain situations, the reports generated by an MIS are not enough to make a decision. Hence it is required to run simulations of hypothetical scenarios that enable managers to get a perspective of the outcomes of the various strategic options available. For example, simulation may be done to understand the behavior on the sales of a product when the price is changed. These systems which enable more informed decision making within an organization are called Decision Support Systems (DSS). Decision Support Systems are used by the higher level managers of an organization and provide support for more tactical nature of decisions. Executive Information Systems: Executive Information systems are a specialized form of decision support systems (Power, 2002). These are the systems that facilitate the information needs of senior executives by providing them access with internal and external information necessary to make any strategic decisions of the organization. These systems have strong drill-down capabilities and allow executives to drill information at various levels of modularity. Using EIS, executives can analyze, compare and identify trends in important variables. These systems enable executives to identify opportunities and threats that may affect the market. Answer 2 Where We Were: The Company is not having any particular strategy in place for their IT systems that shall be implemented across all the locations. They had decentralized strategy for implementing IT systems across various offices and encouraged use of new technologies. Although certain projects were implemented across the whole organization, each unit had the independence to select the IT system that best fits the requirement of that particular location. PACH had strong brand name and had been using that as a key strength in making sales. They had strong importance to web presence to promote their products and operations. Where We Are: The Company has not been very efficient in using Information Systems for achieving business objectives. There is no synchronized information flow amongst the various offices across the globe leading to fighting of divisions for same item from same vendor. Some of the divisions have implemented EDI and EFT applications for better synchronization with their suppliers thereby making their supply chain more efficient. The company has not been able to forecast the business scenarios using appropriate technology stacks. The customers to its website have not been able to see the product offerings in their entirety. Besides, the company has also been facing stiff competition from low-cost vendors who are producing the same designs as PACH at much cheaper price. In the recent times however, the company has developed strict norms that need to be followed while choosing a particular software or hardware. Where We Want To Be: PACH has the target of being one of the leading fashion retailers in the world. The fashion industry is witnessing significant changes with new entrants and markets. PACH wants to be at the forefront of this revolution. Going to Get There: PACH has understood that they have not been efficient in using technology to maintain their leadership in the fashion industry. They have focused their IT strategy around three pillars: Knowledge Sharing, Improving Communications and improving the connect points to the customer. With an aim to encourage sharing of useful market knowledge and best practices, the company is deploying company-wide intranet called “NetWorkShare”. Apart from this, the company is focusing on publishing controlled information about its consumers markets, sales data, and advertisements to select audience. They are also thinking on implementing a purchasing system to streamline the purchasing process across divisions. Answer 3 a.) SWOT Analysis of PACH Co.: The SWOT analysis of PACH Co throws up these findings: b.) Importance of SWOT in development of an Information System: The SWOT analysis of a business is a very important and efficient tool to understand the strategic position the company is in and the opportunities and threats that my make or break the position of the company. However, SWOT analysis also presents a very useful tool for setting up the IT strategy of an organization. As can be seen from the SWOT analysis of PATCH, the company has not been able to efficiently use the knowledge that is present with its employees. The reason for this is that employees have not been able to share their information through various time frames and email gateways. Besides, competition from low cost local vendors is giving the company a tough time. Therefore, there is a need to provide an information system that enables employees to share information, knowledge and innovative and best practices. If a particular practice has been found to be successful in one division, then it can be implemented to other divisions thereby enabling the company to compete with the local players there. All these objectives are achieved by NEWS initiative. Thus, it can be seen that SWOT analysis is important to understand the importance and the way in which NEWS shall be implemented. Answer 4.) a.) Information systems provide an organization with a very effective tool to monitor the performance of the organization and improve the same. However, with information systems, come a large number of ethical and moral issues that organizations today need to confront. Mason (1986) has identified four areas of major concern for managers of information systems: Privacy, Accuracy, Property, and Accessibility. With free flow of information within an organization, it is important to ensure that the information is accessible only to authorized stakeholders. Besides, information as generated by one employee shall not be declared by some other as his. Strict version control needs to be in place to ensure this. The information systems across the organization collect lot of customer data. It is the responsibility of the IS managers to ensure that this data is not misused in any possible way. IS also provides employers with a tool to monitor the activities of employees which can be a violation of the privacy of the employee. At the same time, it is the duty of the employees to ensure that they are not using organizational systems for their personal purposes. b.) The last paragraph of the case study presents an interesting ethical dilemma for the organization. While the claim of the accountant that she developed the system at her own personal computer at home is appropriate, she can’t use the system at her office. The company shall discourage her to stop using the application in her work at office. This is because it is not clear as to: what is the data that the application is extracting out of company’s system and how is it using it. However, if the application brings with it significant efficiency advantages, then the company shall make an analysis of the security of the data that flows in and out of the application. If it is found that the data that is extracted is not misused, then the company can purchase the application from the accountant and make it available to other employees. Reference Farlex. (2010). The Free Dictionary. [Online]. Available at: http://encyclopedia2.thefreedictionary.com/office+automation [Last Accessed on 7th june 2010]. Mason, Richard O. (1986). “Four Ethical Issues of the Information Age.” MIS Quarterly. Vol. 10, Iss. 1. Parsons, J.J., and Oja, D. (2007). New perspectives, computer concepts, 10th ed. Cengage Learning. Power, D. J.(2002). Decision Support Systems: Concepts and Resources for Managers. Greenwood/Quorum. Reuter, A. and Haerder, T. (1983). Principles of Transaction- Oriented Database Recovery. ACM Computing Surveys. 15(4). Pp 287-317. Read More