Threats of Online Management Systems - Term Paper Example

Ready to Sew Case Study 1B-IT Advice to RTS COIS20024—Systems Management Overview Term 2, Prepared and Submitted by Liang, CHEN S0202086 Due Date: 15 September 2010 Date Submitted: Executive summary Running of businesses requires a lot of charisma and choice of the best methods in solving problems. Different stages of business growth are faced with different challenges and thus require different set of solutions. The method chosen should be economically viable and the benefits thereof should be immense to help propel the business to higher levels. Some of the methods chosen are meant for small and starter businesses while others are meant for big and developed businesses. Other solutions applied may be viable for the business but the acquisition costs may be extremely high for the business to afford. In regard to Amy’s business, the paper is going to address the various challenges facing the business, the solutions available and the best steps to undertake in applying the recommended solution. The paper will explore the problems the business is facing resulting from its growth, the business requirements, type of the system necessary to solve the problems, threats and solutions to the threats, and benefits of the use of information systems especially in enhancing efficient communication among the stakeholders. RTS requested for consultation services on 16th June 2010. Table of contents Ready to Sew Information Technology 4 Introduction 4 Discussion 5 Problems Experienced by Ready to Sew (RTS) 6 Business Requirements 9 Information systems to be Implemented 11 Threats 14 Networked system 15 Security and Ethical Threats to Online Management Systems 16 Conclusion 17 Recommendations 18 References 19 Ready to Sew Information Technology Introduction In the recent past, the business world is undergoing an overhaul in the way of carrying out business transactions. Through the introduction of information technology, various sectors of the economy like engineering, medicine and education system have undergone immense changes. The application of information technology in real life has enhanced efficiency and accuracy in work (Bocij, Chaffey, Greasley & Hickie, 52, 2006). Such benefits are best reaped by business people. It is the practice of most business people to process all their business transactions using information management systems. The continued use of manual systems especially in clerical work has seen to it that businesses make less profit in the long run and that the employees are overworked. In any business undertaking, the throughput of the employee is highly considered and if it is not in correspondent to the costs incurred on the employee, then the business is at risk of incurring a loss. In implementing an information system for the business it is wise to put into consideration a number of factors like corporate data management, technical environment, supporting tools, quality assurance, social behavioural development and business process engineering. The implementation of information system in any business entity requires a good understanding of the challenges being faced by the business, the resources available and desired outcomes of the business (Blecker & Friedrich, 28, 2007). Without understanding the requirements of the business, the implementation of the information system may not be a success. Instead of increasing the business profits and efficiency, it may lead to great losses to the business entity. Mrs Amy, as an entrepreneur and family person, requires an efficient information system to solve the challenges she currently faces, and be able to handle future challenges economically The system will work towards enhancing Ready To Sew’s position in the theatrical and event costumes for children design and manufacturing industry as well as maintaining her current customers. Discussion The type of information system to be implemented by an organization highly depends upon the requirements of the business and the management needs with regard to information processing. It is the understanding of the human resource and business requirements that will help in implementing the best information system well suited to the organization. For example, senior managers need an information system for planning of the business, middle management need information system for monitoring and controlling business activities and employees performing operation activities require information systems for the performance of their various duties. For best results in the use of information management systems, there has to be different categories and types of systems maintained by the business entity operating concurrently (Locheleau, 2006, p.105). This is because different business functions require different solutions although there are systems that can be able to handle almost all the requirements of the business entity, and in particular the human capital resources. This paper will break down the various challenges faced by RTS and their corresponding solutions. Problems Experienced by Ready to Sew (RTS) RTS faces many challenges in its operations taking into consideration that it is a fast growing business and the volume of sales have greatly surpassed the anticipated levels. The business faces human resource challenges, operational challenges and customer satisfaction challenges. In the past, Amy was maintaining personal contact with the clients but recently business products requests and advertisement through the word of mouth have increased the customer base making it impossible for the business management to maintain personal contacts with the clients. This has resulted to the design and manufacture of products that do no meet the clients’ needs and confusion in delivering various customer requests. This has in turn resulted in loss of customers to the advantage of other players in the market. The business entity faces challenges in the management of human capital resources. Human resources in any business are the most valuable resources and should be treated with respect and care for better results. If the employees are not happy with the way they are being handled, then there arise problems of unaccountability and inefficiency in their work. The management of human resources should be maintained at a very high level of professionalism. The attendance sheets should be accurately maintained, payroll produced at the right time and performance appraisals should be maintained. This will help the employees to work harder in meeting their targets and thereby maintain a high level of quality of products. This will be beneficial to RTS as the business entity will be able to maintain its customers and also attract new customers. RTS faces great challenges in the filing the operations of the business and its transactions. Information relating to raw materials acquired, raw materials used, finished products, sales volume, orders placed by the customers, the customers’ information, suppliers’ information, payroll, marketing and promotions, catalogues of products, accounts and transportation are kept only in hard copy. Searching for records may take unnecessarily long therefore causing delays in meeting the needs of specific transactions. This subsequently leads to the loss of suppliers, customers and employees to competitors and, as a consequence, great losses to the business. This also results to the maintenance of sub-standard or inaccurate business records like profit and loss accounts and balance sheets. For the efficient running of the business, the management is required to maintain updated records for every activity done within in the business premises. The management should also ensure that a person in need of the information gets the information fast and efficiently. This calls for the use of effective information retrieval systems. RTS faces great challenges in maintaining its stock records. The stock of the business include the raw materials purchased, raw materials returned, raw materials used, finished goods, goods sold, goods sold and returned, and the available stock of finished goods. In particular, the business faces challenges in estimating the quantity of finished goods produced by the business and the raw materials purchased. For efficient planning, the business needs to rely on updated information on the stock levels; raw materials and finished goods. Information on stock levels will greatly help the business in estimating the production costs of the theatrical and ornamental garments for kids. For any business to operate efficiently, there have to be updated information on all stakeholders including the suppliers, clients and employees. Lack of updated information on any of the categories of people may greatly hinder good communication between them and the organization. This is the case of RTS. Amy has previously faced great challenges in communicating with the customers as most of the information in the database is outdated or incorrect. This makes it difficult for the management to follow up on the customer’s design specification as well as the payment details. The business entity also faces challenges in the pricing of the products due to the increase in the variety of products required by the customers. The business entity faces great challenges in maintaining the payroll. Because of this, some payment made are inconsistent with the employees’ details like the days present, work done and the bonuses that should be given to the employees. This has resulted in the dissatisfaction of the employees which could easily lead high employee turn over or poor discharge of the duties by the employees. It may also lead to low morale among employees leading to reduced output. This consequently leads to poor service delivery to which impacts customer satisfaction. Customer dissatisfaction definitely would lead to loss of customers to the competitors, adversely affecting the business. Time management is one of the essential pillars of a good and thriving business. If the management is not able to manage time properly in terms of service delivery and employee punctuality, then the business is bound to fail. Out of the increase in the volume of sales, Amy has not been able to interact with the customers to know them in depth and their preferences. This has resulted from the fact that she has not delegated some of the administration work to reliable employees. She does all the paper work and has a big problem keeping them updated. Business Requirements From the aforementioned problems, it is clear that if the business requirements are not well fulfilled, RTS will lose most of its customers to upcoming competitors. RTS requires a comprehensive system to manage employees details like attendance, work performed, penalties, bonuses earned and their payment details. When the employees are satisfied, they will better take care of the business by imputing more efforts at work. The major problem identified in the RTS premises is filing of information. An adequate system for efficient filing of the documents is highly necessary. The system should ensure quick retrieval of the required information and timely updating of the information. The filing system should be one that is well coordinated to keep track of the raw materials from the time they are purchased to the time that finished goods are sold to the customers. Also the system should track the customers details like the contact details, orders placed, design specifications of the orders, the price attached to the order, date of collection and the payment details. The system should also track the efficiency of payment of the customers and the complaints launched by them as suggested by O’Brien and Marakas (2009). This will highly improve the service delivery of RTS leading to more customer satisfaction. Satisfied customers, through the word of mouth advertising, will attract more customers to the business. In order to have a stable customer base and increase the market share, RTS has no option but to carry out online advertisements and market itself through a well designed website. An online system is important to any business that requires to increase its sales and customers base. RTS, being a major player in the industry, faces the challenge of losing its customers to competitors. It thus has to post more averts and redesign it marketing practices with an aim of retaining the already present customers and attracting new ones. An effective information system is known to make difficult things simple. As such, a task that would take a week to perform may be accomplished in a few minutes with good use of the information system. Information technology has led to increased efficiency and accuracy in maintaining files and documents preparation ((Nurharyoko, 2005, p.3). Through use of information systems, RTS will be able to gather, evaluate and assimilate internal and external information to gain a competitive advantage over its competitors. A good system with good communication network will lead to quicker servicing of the clients’ needs and attendance to their complaints. A good communication system ensures that there are no communication barriers between the company’s employees, customers, suppliers and management as noted by Diamond and Khemani (2005 p. 65). A good information system will enable the firm to cater for, respond to, react to, retrieve, store, disseminate and control information. Information systems to be Implemented One of the information systems to be implemented is customer relationship management systems. The use of the system will lead to more customer satisfaction therefore developing customer loyalty towards the business products. The system can expose problems with customers that RTS is currently having right now and also gives a good method for RTS by using CRM to solve communication problems with customers (HSU & Lin, 2008 p. 133-137). Communication and flow of information is one of the major incentives that RTS can build on to win the confidence of the clients. If the best customer relationship practices are maintained and administered, then RTS is assured of retaining their customers and attracting more. A customer relationship management system will also help in marketing of the products. Use of CRM will enable RTS to keep a good relationship with supplier and customers and has a better understanding of market (Torggler, 2009 p.163-171). From the fact that it is usually expensive to attract a new customer than to maintain the existing customers, then the management of RTS should use every opportunity created by the customer relationship management system to meet the customers’ needs. Through the system, problems of familiarization with the customers, exploring the customers’ needs in detail and complaints received from the customers will be efficiently solved. CRM will help the customers in placing their orders therefore making it easier for them. Through a customer relationship management system, Amy will be able to analyze and extract the customers’ data and give reports on the same. The reports production will be so fast and thus Amy will be able to save more time for her other activities like housework and caring for her kids. The fatigue she had being suffering from in the previous system of operation will be maintained at low levels as all she needs is to feed the system with the customers data and the system analyses the rest. (Jayachandran, Sharma, Kaufman & Raman, 2005, p.177-192). Basically a CRM will help RTS in strategy development process, information management process, value creation process, multichannel integration process and performance assignment process. The system will help RTS to create a conceptual framework and exploring the role and function of each element (Payne & Frow, 2005 p. 167-177). Another system to be implemented is transaction processing system. As the name suggests, the system is designed for processing routine transactions accurately and efficiently. These transactions comprise of sending of invoices to customers, calculation of monthly and weekly tax payments and payroll and control of stock levels either of raw materials or finished goods. If the roputine process es are automated then the employees will increase their output and thus the profits of the company will increase. Through efficient transaction processing information system, the productivity of RTS and employees will rise. The system will help good interaction between the entrepreneur and technical staff involved in the design and manufacture of theatrical clothes for children. The system will assist the employees of RTS to organise transactions in E-business set up, such as monitoring and controlling each transaction and so on (Ray .& Lewis, 2008, pp.181-188). Office automation systems will also help improve the services offered by RTS. Office automation system will improve the productivity of RTS employees who need to process data into information. Use of the system will help the employees even to work from home while at the same time improve their productivity. Use of the systems will help RTS to reap from the several benefits brought by ecommerce. RTS is able to improve and strengthen its information quality, system quality, service quality and customer-relationship quality through E-commerce systems to maximise its profit and efficiency. In addition, it can enhance competitive strength to overcome other competitors (Sun, 2010, pp.92-109). An online system will help in marketing of the products to the already existing clients and potential clients. Though the system is prone to abuse by hackers and competitors, the benefits brought thereof outweighs the limitations. The system will aid the word of mouth advertising to attract more customers into the business. The system may also be used by clients to place their orders or make any queries regarding their orders. They may also launch complaints to the management through the system. In using an online system RTS should be extra careful and should use various techniques to prevent abuse when the system is launched (Roman & Cuestas, 2008, pp.641-656). Threats RTS faces big threats in their operation highly attributed to new entrants into the business. At the initial stages of the business, RTS enjoyed a near monopoly kind of business but as the business grew there have been new entrants to the industry. This implies that the existing and potential clients of RTS will have to be shared out among the industry players. The company faces a threat of losing their customers which will subsequently lead to reduction in the profit levels. The increasing complaint launched by the clients is a clear indication that there is increasing levels of dissatisfaction among the clients. When the customers are not satisfied with the services offered, they will tend to look for better services from the competing companies. The customer relationship management system will help improve the service delivery in terms of answering the clients’ queries and processing of statements and reports. This will help retain the existing customers and most probably attract more. Every customer requires a business that processes his/her queries and complaints in time and consequently corrects them. The company faces a threat of new entrants into the market who will give stiff competition to RTS. The new entrants will destabilize the customer base of the company and will attract RTS’s customers into buying their goods and services. The implementation of the new information management systems suggested above will create and enhance barriers of entry into the industry. Efficient service delivery sufficed by the online system, transaction processing systems and office automation systems will make it more difficult for new entrants into the business. The systems will ensure economic production of goods thus low prices for the same. Networked system Sharing of information in the current business world is important and is made possible by either an online system or a networked system. The various departments should be networked to enable the efficient flow and tracking of information. A networked system will make it easy for employees in different departments to communicate without having to physically move from one department to the other. Employees may be assigned duties, seek clarification and be warned using the networked system. Such a system is also beneficial in that in case there are queries from the customers and an employee is not able to answer to the queries, then he/she can seek clarification from a well informed employee without wasting lot of time. A networked system is an economically viable option for RTS in terms of software cost and management, flexible access, file sharing, resource sharing, software acquisition costs, accessibility of information and workgroup computing (Meyer, Wichman, Büsch, and Boll, 2009). In workgroup computing, users can update a document concurrently thus allowing for interactive teamwork (FAAN, FNAP, Roy & Simpson, 2008). Security and Ethical Threats to Online Management Systems The introduction of online systems into the business world has greatly improved the processing of business transactions and service delivery. Through the online systems, the world has been become a small unit in that the physical distances create no hindrance to the carrying out of business transactions. However, online systems have brought immense challenges especially with regard to the security of the information being transmitted. Online information systems face threats from hackers, sniffers and crackers. This interferes with the confidentiality and privacy of the information being shared across the internet. Also if the system is not well secured, the information contained therein may be maliciously altered which may be harmful to the reputation of the company. RTS should implement a well secured system and use the most recent web technology so that people with ill intentions do not access or interfere with the information being transmitted or that is stored online. The use of an online system will expose RTS to its competitors. The competitors may use the information collected from the online system to their advantage like design and manufacture a higher quality product but still sell it at a low price. This will lead to loss of customers and market share. To prevent this, the users of the management system may have always to request authorization to gain access to various types of information. Conclusion There can be challenges in implementing the information management systems suggested above especially due to cost and technical expertise of the people involved in their installations. The situation may be complicated by the fact that the employees of RTS are not well conversant with computer systems. Instead of improving the situation, the information systems may complicate the company’s situation further. When the information management systems are installed and implemented in the right way the benefits that will be realized will be immense. The management of RTS should take into consideration the problems and benefits associated with the information management system in choosing a viable option. The installation and implementation of the information management systems suggested will immensely improve the service delivery of RTS therefore maintaining and improving the market share of the company. Recommendations RTS should take a chance at implementing a good information management system that will help improve its service delivery. As an appraisal practice, the management should consider training its hardworking employees so that they may be able to operate and manage the new information management system instead of hiring new employees to do the same job. This will motivate the employees to work even harder to the benefit of the business enterprise. Amy should remember that implementing the system is not enough. Frequent maintenance of the system will help improve its performance and thus improve the level of customer satisfaction. References Blecker T. & Friedrich G. 2007, Mass customization information systems in business, Idea Group Inc (IGI), Hershey. Bocij P, Chaffey D., Greasley A. & Hickie S., 2006, Business information systems: technology, development and management for the e-business, 3rd edn, Prentice Hall, London. Diamond J. & Khemani, 2005, Introducing financial management information systems in developing countries, International Monetary Fund, Washington D. C. FAAN, FNAP, Roy L. RN & Simpson, 2008, Caring Communications: How Technology Enhances Interpersonal Relations, Part II, Nursing administration Quarterly, vol 32, issue 2 p. 159-162. 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