Analyzing a Corporate Information System - Essay Example

Analyzing a Corporate Information System Information System refers to the organised collection and processing of data either manually or computerised. It is the system that stores, maintains and analyses the information and these data are used for making critical management decisions. Information system development is the process in which organised and collective work is facilitated by analysis, design, implementation, maintenance and support. Information is provided to the organisation by three means, which are Input, Processing and Output. Input is the collection of raw data, which is processed and transformed into more meaningful information. The processed information is called as Output. The output is then reviewed and processed by the appropriate members of the organisation to evaluate and refine the input. This is called feedback. In todays environment, information and technology have become a critical component of successful businesses and organisations (Avison, 2003). Most of the organisations are now relying upon the information systems in their day-to-day operations, management decisions and other business activities. Information technology can improve the quality of health care by providing the new ways for the patient to access the heath related information at any time and at any place. By this chapter, we are taking the first step in increasing our understanding about IT, and how IT affects the health care industry (Glickman, 2007). IT or Information technology is basically the use of computers and software to manage information in an organization (Schneider). In some companies it is referred to as Management Information system (MIS). The basic job of any IT department in an organization is to set up systems to process information, ensure data security, create information storage and retrieval mechanism and ensure error free flow of information to the relevant stakeholders. IT as an integral function of an organization Early use of IT was as simple as computing the totals of the sales done by a merchant in a day. However, with growth of technology companies have been using IT more rigorously for better accuracy and speed of an activity. The growth of IT in organizations started first with the use of computers and later went on to the use of communication systems. With the growth of networking, organizations strived to implement these so as to achieve maximum efficiencies. IT today is a vehicle for making substantial changes in organizations, markets and the economy (Lucas, 2001). The basic purpose of any organization is to either manufacture a product or to provide a service to its customers. An organization is divided into various functions as per the task they perform to achieve the organizational goals. The organizations use various technologies for achieving this goal. However, IT is different from these technologies. Figure 1 below describes the role of IT as per Harold Leavitt. As per this model, IT is the central link between all parts of an organization (Lucas, 2001). It has a separate existence from the other technologies used by the firm. Thus, we can see that IT has taken a central role in today’s organization. Figure 1 Examples of role of IT in organizations Some very big organizations have been pioneers in using IT to revolutionize the way processes are run. Chrysler is one such example. The company is an excellent example of ‘lean’ production, a methodology of production that has revolutionized the manufacturing industry. This production system required the company to work with approximately 1600 external suppliers that shipped materials to 14 car and truck assembly plants in North America (Lucas, 2001). The key to lean production is Just-In-Time (JIT) inventory system. The company used IT to set up Electronic Data Interchange (EDI) for efficient running of JIT mechanism. This meant electronically linking all the suppliers to the company through the EDI and eliminating any manual or paper transactions (Lucas, 2001). The major transactions involved were – ordering parts, scheduling and rescheduling deliveries and payments (Lucas, 2001). The EDI enabled high speed communications between the various parties and also helped in handling huge transactions which would have been impossible to handle manually. Thus, IT helped the company in implementing lean manufacturing which eventually saved $1 billion worth of inventories by reducing the inventory turnaround from 5 days to 2 (Lucas, 2001). Using IT, Chrysler has devised a unique way of avoiding excessive billing transactions. Through the Pay-as-Built program, Chrysler keeps track of the number of cars built each day and then works out the number of parts of a particular supplier that would be required. Based on this analysis, the computers automatically pay the vendor for the material used through wireless payment transaction (Lucas 2001). One more facet of communication that IT helps in is internal communication. In the example of Chrysler discussed earlier, EDI helped the company in communicating to its suppliers much faster than manual communication and also facilitated huge data handling. The overall impact of this was felt in the inventory holding days and eventually the cost. Similarly software applications like PeopleSoft use web capabilities to help connect people within the organization. They provide platform for discussion forums on HR related or other departmental topics where employees can freely express their views. These forums can be used as channels for collecting information to improve internal processes. This software also provides emailing facilities where automatic emails are triggered based on hierarchy in processes like leave management or payroll (sig.nfc.usda.gov). Web facilities of PeopleSoft help in conducting surveys which facilitate process improvements. Web can also be used to dissipate information throughout the organization at the same time. Thus, IT helps in connecting to thousands of employees at the same time and hence inculcate the team culture which a very import characteristic of TQM. Through the various forums and surveys the web capabilities of IT help in increasing the employee involvement in the TQM process. This is a very important feature for the success of the TQM effort in an organization. To achieve high quality products, it is vital that the inputs that make the product are of high quality. This can be achieved by building healthy relationship with the suppliers and providing them with adequate information at the right time. In the Chrysler example, the company was able to achieve quick and transparent communication with the supplier through IT. Product development and innovation as a part of TQM cannot be easily achieved without the help of an advanced IT system. Computer Aided Designing (CAD) and Computer Aided Manufacturing (CAM) are the answers to today’s product design and innovation requirements of the organizations. Thus, we can see that all the activities of TQM are influenced by IT is some form or the other. There is no escaping the fact that IT is vital to the implementation to TQM in an organization. Read More