Modernizing Components of the Traditional or Manual Chain of Business Processes - Assignment Example

Management of Information Systems Introduction Management of Information System (MIS) broadly refers to an integrated user-machine based system that provides management with the tools needed to run the various departments in an efficient manner and evaluate the performance of each department at the end of the day. MIS is necessary for any business because it enhances the process by which data is collected, analyzed, interpreted and used in decision making. MIS are at enhancing managerial functions such as monitoring, decision making, control and planning. Every business should have a clearly defined MIS framework of guidelines, policies, standards and procedures that best suit the company. An efficient MIS can be costly to incorporate in already existing businesses. However, they improve the coordination of different departments and the flow of the business processes and in so doing enhances productivity while simultaneously cutting down the costs of operation (Laudon & Laudon 2). 10-Step “Traditional or Manual” Chain of Business Processes The diagram below illustrates the 10-step traditional chain of process at a corn mill. There are five departments in this specific corn mill. These are the Procurement department, the Processing department, the storage department, the accounting department and the sales department. The corn is from suppliers who have been sourced by the procurement department. This department ensures that the corn is transported to the mill through the suppliers or procured transporters. The procurement department is responsible for making sure that enough corn is continuously supplied to the mill to avoid instances of shortage. After this, the corn is handed over to the processing department. Before anything is done to the corn, it is first of all graded. During grading, the corn is sorted based on its quality and fitness for consumption. After the corn has been graded, it is taken to the mill. Here it is grinded to cornmeal, processed and packed. The lower quality corn is taken to the animal feed mill where it is processed to animal feed. Waste is then disposed or stored for compost or energy generation. The ground corn is then handed to the storage department. In the storage department, the already packed cornmeal is counted and further packed into storage containers. This is as a quality control measure to avoid storing or selling damaged produce. Excess produce is in silos. The stock taking records are then forwarded to the accounting department. The accounting department ascertains the records provided are accurate. Records are duplicated and stored for future purposes. The accounting department is tasked with the responsibility of credit control. This is to find out if the clients are financially capable of acquiring the cornmeal on credit or not. It always has to make sure that the mill remains financially stable. This department regulates the amount of credit that clients have visa vie the liquidity of the corn mill. After a customer’s credit is approved, he/she is then referred to the sales department. The accounting department keeps a record of all the transactions the mill makes. This is for accountability and tax purposes. This department also balances the mills books of account every end of the year and submits a report to the corn mills stakeholders. It also generates and sends invoices to its clients. The sales and marketing department act the face of the corn mill. This is because, when a customer walks in to the mill to purchase, they will deal with the sales and marketing personnel. The sales and marketing department is vested with the duty of advertising to new clients and new markets. This department tries to make as much sales as possible to acquire a larger market share that there competitors. Modernizing Components of the “Traditional or Manual” Chain of Business Processes In the traditional or manual systems, sales departments have encountered difficulties in keeping track of the number of products that are produced by the production department and the number that is sold. The recording process has for a long time been done manually by keeping files and documents if filing cabinets. Technological changes have led to the adoption of efficient system of managing information. These new systems have made record keeping much easier and faster. The storage and retrieval of information in traditional systems is a demanding process. As such, many organizations are adopting more efficient computer based MIS systems (Laudon & Laudon 382-425). Through the utilization of transactional processing systems and compatible management information system software, the record keeping process would run more smoothly. A transactional processing system is an information system that collects, captures and processes data gathered during an organization’s day to day transactions. A transaction is simply an organization’s business activities such as cash sales, credits sales, deposits, orders abs reservations. Transactional systems have various functions. First and foremost, they assist in recording business activities transacted throughout the day as student registration in schools and learning institutions. Secondly, they can be used to confirm the action that triggers a response such as printing a student’s schedule, sending an acknowledgement note to a client, generating employees paychecks or issuing receipts customers. Transactional systems are also helpful in data management. This may involve activities such as adding new information, editing existing data and removing unwanted or obsolete data (Laudon & Laudon 382-425). Management information system (MIS) software helps an organization’s management in decision making and the evaluation of the day to day operations. MIS is ideal for routine transactional processing for managers because it is capable of performing rapid calculations and data comparison and producing a meaningful analysis of information. It generates accurate, current, timely and organized reports so that managers and other users can easily make decisions, solve problems, supervise activities and evaluate progress in the business. Every hardware component needs the relevant software in order to work efficiently. Computers, printers, scanners, bar code readers and other such devices must be through a network called an intranet (Laudon & Laudon 382-425). Through the use of transactional processing systems, management information systems and the appropriate hardware, the sales department would run more efficiently, accurately and much faster as compared to the traditional system. In a hardware store for example, these systems would first of all reduce the operation costs since it reduces the need for a large workforce. The MIS requires a small operation workforce while performing most of the duties that would otherwise be conducted by numerous staff. Their efficiency would enable a sales person serve a client much faster. If a customer asks for a product, the sales person can check the system in his end-user computer, to see whether the product requested is in stock. If it is in stock, then he will simply find out exactly where it is and retrieve it. Where a product is unavailable, the sales person will place an order for it and advice the client appropriately. This entire process only takes a maximum of three to five minutes. Compared to traditional systems where a sales person would have to physically visit the store and physically check if the product required is in stock, this is much faster. Another advantage is that management can easily notice when a particular product is running out. In automated systems, when a stocked product runs low, the system automatically notifies the production department or suppliers ensuring that the organization is always properly stocked. Management information systems also help management notice if a certain product has gone missing. Since the management has frequent reports, it will be easy to note that the number of products produces are less than those sold and damaged (Laudon & Laudon 382-425). An organization’s management can greatly benefit from Management Information Systems. Apart from analyzing and interpreting data in an accurate and organized manner, they provide a platform through which data can be efficiently. Where information may be necessary for prudent and reasonable decision making, MIS systems allow users to access this information easily. This saves time and allows workers to engage in other productive causes (Laudon & Laudon 382-425). MIS greatly enhances communication between the various offices and levels in an organization. Information can flow between top-level and mid-level managers, midlevel managers and employees and the different departments in a timely and accurate manner. Businesses must have a fast and effective communication system so as to work in synchrony and managers to be updated constantly. Continuous communication helps to detect, avoid and solve problems. An organization can, therefore, anticipate any negative developments and resolve them in due time. Therefore, it can serve clients faster and effectively. MIS are created to be less labor intense. Therefore, an organization can save much money that would be needed to employ a large workforce to perform these functions. The system also eradicates the need to manually store data. Information is recorded in the system and hence management and staff do not necessarily have to spend much time and effort in locating products within the stores. Due to this, a business can save on physical space that can be utilized for other productive purposes (Laudon & Laudon 382-425). How MIS Can Improve the “Traditional or Manual” Chain of Business Processes One of the most important functions of MIS in an organization is helping management make critical decisions in the day to day running. It is inevitable that any decisions made by management depend heavily on accurate and up-to-date information. MIS systems provide the relevant information that can also be referred to or retrieved at any given time. Management can, therefore, improve the quality of decisions made while concurrently reducing the time taken for valid decisions to be arrived. MIS is viewed and used by different levels of management in all departments. As such, all information required from all departments is consolidated and processed by the system in a single location to provide a well-organized and detailed information package that is available to management at their need (Laudon & Laudon 72-110). In a financial organization for instance, MIS systems exist in the form of financial accounting system and subsystems. In these organizations, MIS comprise of varying functional elements that are charged with overseeing different operations. One system can focus entirely on the internal balancing of the organization’s books, ledger and other financial accounting functions while another concentrates on analyzing and comparing the results obtained from current and previous records using programmed equations. These elements could be accruals, adjustments, reconciliations and entries from the different departments (Laudon & Laudon 72-110). Customer satisfaction is a vital obligation that all businesses strive to achieve. MIS plays a major part in this by reducing the time taken to serve customers. Instead of a customer moving from one department to another, he/she can use just one station to conduct a number of functions. For instance, a client can check on the availability of the product, pay for it and organize for its delivery at one station. MIS drastically reduces the processes and bureaucracies of purchases. It is also the backbone of online transacting. With a good MIS, an organization can opt to offer its consumers online services, thus making their shopping experience easier and much more convenient (Laudon & Laudon 72-110). How MIS Will Improve Decision Making in the Above Scenario The sales department plays an important role in any organization. This is where the customers and the organization trade. Therefore, it is crucial that the business has an effective and efficient sales team. A good communication system must, therefore, exist between the management and the sales team. Information flow is vital for any organization to succeed. Any change in stock such as the introduction of a new product, withdrawal of an existing product and changes in prices of the organization’s products should be adequately communicated to the sales team. MIS provides a well-defined communication channel. Communication is much more efficient in this system. It ensures that any problems with regards to product or clients’ accounts are . This makes decision making much easier and faster for managers, since they have all the information as soon as they require it regardless of the distance between the organizations departments or branches (Laudon & Laudon 114-145). MIS has enabled organizations to create databases and information system that can cater for online services. This means that the organization can be throughout the week. This not only increases sales, but makes it easier for the sales department to handle a larger number of clients and collect important information on their products. This is important to the managements, from this information the organization can make necessary changes to their products to better suit their clientele. This in the long run improves the products and guarantees higher sales margins. Providing online services not only increases the sales margin of the organization but also increases the target market. This means that an organization can sell its products to individuals in different countries, this is important to the management because they can compare their products to other similar product in different countries, and make necessary changes to their product to meet the different markets (Laudon & Laudon 114-145). Apart from all this, it also cuts down on the employees needed in an organization. Since MIS does not require a large number of people to use, the management will have fewer people to handle thus reduces the time taken in decision making. On the management level, it is inevitable that any decision making relies heavily on information. Since MIS provides accurate, current, timely, organized and easily retrievable information, decision making becomes much faster compared to the traditional system were gathering and processing information took much longer, therefore, pro-longing the decision making process. Due to the accuracy, timeliness and organized nature of information received by managers, the quality and quantity of decisions great improves. MIS collects and processes data to accurate and straight forward information that managers can easily understand and interpret, and come to a more effective and efficient decision. MIS also processes the data extremely fast. Therefore, decisions are made faster due to the availability of required information (Laudon & Laudon 114-145). Availability of information from the MIS, allows managers to make appropriate decisions in planning for the organizations future. All organizations need to make plans of expansion in order to survive and grow. Information is vital in the planning processes. As mentioned earlier, any decision making process requires accurate and timely information. MIS improves quality control and supervision. With a properly built and maintained system, all organization’s activities are closely monitored and controlled. This makes sure that the quality of product is not. Again with constant monitoring and controlling, it is easy for management to come up with more effective and efficient ways of doing things (Laudon & Laudon 114-145). References Laudon Kenneth C. & Jane P. Laudon. Management Information System New Approaches to Organization and Technology, Prentice Hall Professional Technical Reference, 5th Ed., Upper Saddle River, NJ, USA, 1997. Print. Read More