Developing Information Systems to Increase Productivity, Efficiency, and Profit - Essay Example

Running head: Developing Information Systems Developing Information Systems to Increase Productivity, Efficiency, and Profit Insert Insert GradeCourse Insert Tutor’s Name October 18, 2011 Developing Information Systems to Increase Productivity, Efficiency, and Profit Introduction The contemporary business environment is characterized by dynamic forces that dictate the mode of operations to be applied by a given business organization. In the ancient times, business organizations, government agencies or non-profit organizations applied manual procedures in carrying out their processes. These processes required much labor, for instance, the clerical officers or cashiers in a financial institution. A lot of time was also needed to serve the clients of an organization. The clients were used to these slower procedures, as they were the standards of operations of the time. The employees of these organizations also had to suffer the huge load of tasks each day due to the manual procedures. However, with the modern technological developments that have been recorded in the past few decades, organizations have found it impossible to operate without information technology support. It has been observed that both medium and large organizations cannot operate for more than 24 hours without a modern technology support (Tutor Guidance, para.3). The use of this modern technology has also evolved over the past years from the primitive approach to technology to the proper planning and management of these operations. The modern technology that is in common use in business is information systems. An information system refers to a ‘collection of hardware, software, data, people, and procedures that are designed to generate information that supports the day-to-day, short-range, and long-range activities of users in an organization (Discovering Computers 2000, para.1). Information systems have a variety of uses in a business environment and as such, there are different types of information systems. However, all these types of information are aimed at improving the efficiency in the business operations including management and decision-making processes. As a business organization that has expanded its operations in the recent past, Smith Collectible Airplanes finds it necessary to adopt modern technology into its operations. This paper focuses on the strategy that can be employed by the organization to establish Information Technology departments that will enable it improve its operations. It provides details on the types of information systems that can be useful to the organization and how they will be used. Types of information systems required by Smith Collectible Airplanes There are different types of information systems that are applicable in the business environment. Some of the information systems are developments of the others. These include management information systems, office information systems, transaction processing systems, decision support systems, and expert systems (Discovering Computers 2000, para.1). Smith Collectibles Airplanes will require some of these systems in the initial stages whereas others will be necessary later as complex processes are encountered in the operations of the organization. One of the important information systems required by the organization is Transactions Processing Systems (TPS). A TPS will obtain and process data from a daily business activity like transactions and confirms the process by actions like printing of a receipt (Discovering Computers 2000, para.5). The organization performs large sales of products and purchase of materials. The TPS will be essential in managing such data. It will also be useful in the intended e-business by enhancing online purchase of the company’s products. Office Information Systems will also be useful to this organization. This will be essential in enhancing communication within the company and performing some calculation electronically rather than the traditional manual system adopted by the organization. The information produced by the transaction processing systems may not be precise on the management decisions to be made. To improve on this, the organization will require a system that is more integrated to process the transaction, analyze the data, and provide guidelines on the possible managerial decisions to be made. This will be achieved by a Management Information System, an improvement on the Transaction Processing System. Other information systems like the experts systems and decision support system will become very necessary as the organization expands its operations. It is also important to not that most organizations tend to integrate most of these information systems into a single integrated suite. It would be appropriate for the organization to adopt this as well. How e-business can help Smith Collectibles The use of internet has increased considerably over the years with several individuals having regular excess to the cyberspace. This has improved the ability to share information with millions of people across the globe at an instant. Business operations often rely on communication mechanisms that are reliable and can reach a large audience faster. Thus, business firms have found internet as one of the strategic methods of improving their operations. It has been observed that business organizations that will survive in the modern market are those capable of integrating internet technology into their operations (Phan, 581). E-business refers to conducting business over the internet and includes online buying and selling, online sales promotion, serving customers, and contacting other business organizations (Nelson, para.1). In the contemporary world, organizations uses internet not only to market their products but also to carry out market and marketing research in order to identify the lines of operations that can be profitable to the organization and how these objectives can be achieved. When internet was first applied in business, there was fear of insecurity and many clients and business organizations did not trust the online transaction processes. However, these issues of insecurity have been resolved with the development of modern browsers that have security and the issue of digital certificates to the clients of an organization (Nelson, para3). As such, e-business is likely to increase rapidly over the next couple of years. Smith Collectible Airplanes is rapidly expanding its operations and wishes to reach more customers. The organization has purposed to reach its customers over the internet. Through the internet, the organization can advertise its products to the customers. It can provide information on the types of products offered, the prices of these products and the locations of the retails stores from where the products can be obtained. The company can also provide the customers with a mechanism through which they (the customers) can order for the products without necessarily visiting the retail stores. The organization has to establish an electronic payment system for the online purchase of its products. This will be achieved through the transaction processing systems to be adopted by the organization. The organization can also establish a customer-service center that addresses queries from customers launched over the internet. In this way, the organization will able to identify and respond quickly to the changing needs of the customers. Porter identified five forces that collectively affect the operations of an organization in a given market environment. These forces include the threats by new entrants into the market, threats of competing products or services, the bargaining power of the customers in the market, the bargaining power of the suppliers, and the rivalry among the existing firms (QuickMBA, para.3). The brick and mortar industry is not very expensive and online business in this industry is yet to develop. The organization can apply information technology to manage the market forces that affect its operations. Developing a competitive advantage by a business organization consists in identifying the significant market forces and marking timely adjustments to accommodate the opposing forces while utilizing the supportive forces. By adopting e-business, Smith Collectible Airplanes will be able to understand and adjust to the changing needs of the customers. It will have advantage of the existing firms and the possible new entrants to the business. What the company should put in place to meet the technological need To keep up with the current technology, the organization needs to install a mechanism for the storage and easy retrieval of data for quick and effective decision-making. The use of a simple management information system will help the organization to keep accurate data that can help in managerial decision. The organization is still not very large and the only complex information that needs to be considered is that from transactions- purchase of materials and sales of the products. A data mart rather than a data warehouse will fit the organization for the initial stages. As the organization progresses, there will be a need to exchange information across departments and data warehouse will be necessary. While sharing information among the different stakeholders in the organization, there will be a need to consider the extent to which such information can be shared. The use of extranet will be most appropriate for this organization. There is need to share information among different sections of the organization. The organization also intends to reach internet customers. Thus, there will be a need to avail some information to authorized users outside the intranet, hence the necessity for extranet. A security mechanism shall be adopted to permit access to the intranet only to the authorized external users. A detailed service protocol is necessary to specify which services can be obtained at a given port. A user will be prompted to supply the service name as well as the location of the port for this service. Similarly, a connection to the internet is essential to the organization. The organization needs to be access the World Wide Web to seek vital information that is necessary for its operations. Information on the business, the customers’ needs, and the business regulations in specific regions can be retrieved from internet sources. The new IT department Smith Collectible Airplanes has not applied information technology in the past that would call for system upgrade. Besides, the organization currently does not have complex structure with hundreds of employees that would warrant a sophisticated IT department. However, the organization hopes to expand its business to reach out for more customers. This will call for more employees, complex decision-making processes, and large sets of data to be processed and managed. At the initial stages, the department will have basic units that will combine two or more functions. There will be a technical services unit responsible for the development of the infrastructure that will support the information systems. This includes installation of Internet and extranet Networks, the Wide and Local Area Networks and the security measures involved. Wireless technology is increasingly being adopted by organizations. However, this may not be appropriate for an organization that is yet to integrate technology into its operations. The unit will also perform the roles of an office systems section like purchase and maintenance of computers, printers, networks. There is also a need for systems administrative unit. This section applies batch processing to give daily reports and updates on data files. The maintenance of the mainframe computer in the organization and other network components are performed here. Other functions like data control, back up, processing or communication can still be performed by the unit. The business solutions unit is an important section as well. This is responsible for the development and implementation of computer-based business applications. The roles include procurement and installation of application software for business solutions. The considerations by SCA before moving into e-business The organization has to make several considerations before integrating modern information technology into its operations. Firstly, there is need to consider the legal provisions that govern the operations of business organizations. The use of technology in business has to comply with the legislative regulations imposed by the policy-makers. This is also accompanied by ethical considerations. The organization has to consider the needs of its employees when adopting the system. It has to be understood that some of the employees of the organization may not be conversant with the application of modern technology in business. Proper arrangements need to be made to ensure that such employees are trained on these procedures. Similarly, organizational policies should clear spell out the right to use these facilities by the top management as well as other employees. The other important consideration is the security of information processed through the information systems. Irrespective of whichever application considered, such information is important to the organization and its damage or loss may lead to huge losses to the organization. Risks like computer viruses are common especially when the organization connects its system to the internet. The organization will have to keep updates from the software manufacturers on the most recent insecurity problems as well as how to fix such problems. The use of computer viruses is essential here. There is also need to develop and adhere to security policies to protect information and the users. The policy should ‘set the rules for expected behaviors by users, system administrators, and management and security personnel’ (SANS Institute, 2). The policies will define how to deal with irresponsible users and help enforce the legislative provisions. An effective integration of information technology into the operations of business will be affected by the technical environment that already exists in the organization. The organization has been performing its operations manually. This implies that the whole process will require purchase of new facilities - software and hardware. The organization has to take into account the resources that are currently available to obtain the facilities. The system will also require new skills and expertise. The organization will have to outsource some skills and expertise and train its present employees on the procedures. The costs of these processes need to be considered. Lastly, the technological world is not static and neither is the market environment. An application system that seems efficient now may be less efficient in the future. There is thus need to allow for improvement on the current system. Thus, the facilities to be used, especially the hardware, should be able to support system upgrade. Organizations are striving to integrate several applications under one suite. The hardware should be able to support the multi-user, multi-tasking environment. Works Cited Discovering Computers. 2000. Types of Information Systems, 2011. 18 October 2011. http://bisom.uncc.edu/courses/info2130/Topics/istypes.htm Nelson, Tim. e-business (electronic business), 2000. 18 October 2011. http://searchcio.techtarget.com/definition/e-business. Phan, Dien. E-business development for competitive advantages: a case study. Information & Management, 40;581–590, 2003. 18 October 2011. http://www-e.uni-magdeburg.de/evans/Journal%20Library/E-business/E-business%20for%20competitive%20advantage.pdf. SANS Institute. Information Security Policy - A Development Guide for Large and Small Companies. 2011. 18 October 2011. http://www.sans.org/reading_room/whitepapers/policyissues/information-security-policy-development-guide-large-small-companies_1331 Tutor Guidance. Introduction to Information Systems in Business, 2011. 18 October 2011. Available at http://www.comp.glam.ac.uk/pages/staff/tdhutchings/chapter1.html QuickMBA. Strategic Management: Porter’s Five Forces. 2011. 18 October 2011. http://www.quickmba.com/strategy/porter.shtml. Read More