The Importance of Technology Trust - Case Study Example

Introduction Every aspect of management today requires information on which to build the organization but mere information is not power. The right dissemination and application of information is power. Accordingly, the conversion of data from internal and external sources into information is called Information Systems. This is also known as Information Management and is typically computer based. It helps in enhancing the decision making process, enhances the operations, helps in overall growth of the company. It includes hardware, software, people, communication system, and the data itself. Information technology is applied in different aspects of business which includes Inventory management system, sales force administration, human resource management system, customer relationship management, and finance and accounts. What becomes important then is the security of the data generated and implementation of standards for data protection. This report will evaluate the tools which can be used for different aspects of businesses. Inventory Management – ERP tools – SAP – RFID To reduce costs and improve products and services technology has advanced in every sector. Enterprise Resource Management (ERP) technology is widely used by organizations. This software integrates data from the entire company and all the third parties involved, which includes suppliers and distributors. SAP and Oracle are the leading ERP companies but they concentrate on multinationals and large medium-sized companies (Twentyman, 2006). Before buying ERP software companies should examine where exactly it can be applied. Proof of supplier’s track record is essential which can aid in deciding on the supplier. ERP deals should not be stuck based on price because heavy discounting means that the cost of making the sale outweighs the benefits of acquiring that customer. Focusing on price also would indicate that business benefits have not been focused on. ERP is a substantial investment but business can be conducted with minimum disruption. Hence identifying suppliers who extend maintenance and support is essential. RFID (Radio Frequency Identification technology) tags when attached to the product, tool, and material handling equipment give the manufacturers demand signals from the customers and the market. Small electronic tags transmit data via a radio signal to RFID readers and related hardware and software infrastructure. When the information on the tags passes by a reader, the movement is captured and managed by the infrastructure. Without any human interaction, the organizations can link the physical world to the digital world. Wal-Mart has adopted this technology and it is estimated that they could save $8.35 billion annually (AME, 2005). It can track shipments arriving at the store and the sales leaving the door. It has total control over the inventory with RFID. This technology helped them to reduce thefts of their products, apart from obtaining proof-of-delivery, inventory reduction, and promotional performance. Sales Force Automation (SFA) tools – Seibel – PDAs Sales force automation is a tool which helps to convert the customer leads generated by the marketing team into actual sales. In the global competitive environment this is essential to improve the efficiency and productivity of the sales team. The data collected helps the management to take informed decisions and plan the sales and marketing (Singh, 2003). SFA tools helps build, nurture, and manage client relationships. Companies like Pfizer are partnering with technology firms to enhance customer experience. Customer relationship management (CRM) is a strategic relationship management process that combines the best business practices, resources, knowledge and appropriate CRM software to serve personalized customer needs and to increase customer loyalty (Smith, 2006). Customer data analysis is a key part of CRM. Pfizer, one of the world’s leading pharmaceutical companies is utilizing the services of a leading IT solutions company to manage its sales force globally. Using a popular CRM tool, Seibel, Pfizer plans to integrate data from over 10,000 sales persons spread across Europe. The tool captures data regarding each salesman’s hospital visits, visits to the doctors, distribution of free samples, and their feedback. This data is then integrated, analyzed, and presented in a format to help the higher management take strategic decisions. Merely obtaining the data is not sufficient. This information has to be shared effectively with all the partners. Zara, a Spanish fashion clothing company, uses proprietary information system to connect its stores to its headquarters. Zara employs specially designed hand-held devices or PDAs at all its stores, which facilitates rapid and accurate exchange of market data. Through this they keep track of the total order fulfillment process – plan procurement and production requirements, monitor warehouse inventories, allocate production to various factories and other suppliers, keep track of shortages and oversupplies (Ferdows et al., n.d.). Singh however advises that some SFA tools are complex to use and hence these implementations do not yield the expected results. Users cannot be expected to start using it totally from the first day and they can practically start applying only about 20% and gradually with experience enhance their performance. Apart from this lack of management support also results in low usage and benefits from the tool. These precautions have to be borne in mind before venturing into such tools. HRMS – PeopleSoft Human Resource Management System involves decisions which directly impact business performance and involves all the departments. PeopleSoft are vendors for software for effective human resource management. It enables one to plan the workforce needs, acquire and develop relevant skills, measure and manage performance, and retain key employees. This enterprise application can be deployed online. Internet applications require no software code to run on the client machine. Even if the software is upgraded, no changes are necessary at the users’ end on desktops, laptops and other devices (Oracle, 2006). The initial costs may be high but the vendors help the organization to understand the true cost of leveraging the investment over a five-year period. This software helps real-time information exchange. Background check saves the company money as the firm comes to know that the prospective employee is unsuitable. It can thus eliminate the cost of the hiring process. This is a rapid and effective way to minimize HR costs. Owens Corning runs PeopleSoft Enterprise HCM and expects savings of tens of thousands of dollars by replacing outsourced open enrollment with PeopleSoft Enterprise functionality. Employees can view their paychecks online and the HR is free of the traditional focus on transactions. Data collection is improved and data flows across the organization and helps in informed decision making at both the operational and the strategic level. This software can be used for compensation, workforce and retention planning. It is easy to use and upgrade. SAP also provides this software but the recent merger of Oracle and PeopleSoft has made them the most sought after vendors in the industry. Financial Accounting Recent corporate scandals warrant improved corporate governance and enhanced effectiveness of internal control system (Sutton, 2006). New accounting models transform the way businesses are transacted. Transactions take place through the internet and technologies like electronic data interchange (EDI), image processing and electronic file transfer have increased (Bierstaker, Burnaby & Thibodeau, 2001). The techniques that would help in efficient accounting are just-in-time manufacturing (JIT), total quality management (TQM) and ABC which has gained popularity and created competition for accounting controls. With advanced technology, managers can now access information very easily at all levels of the organization. Enterprise Resource Planning (ERP) has a de-skilling effect, in which the knowledge and control, previously in the hands of the employees are now objective properties of machinery. The accounting module in ERP incorporates applications involving the general ledger, accounts receivable/payable, the fixed asset register, cash management, cost control and budgeting. ERP integrates all business functions and provides financial and non-financial data to facilitate decision making. With the help of ERP newer accounting process can be adopted like activity-based budgeting, product life-cycle costing and scorecard balancing. ERP helps in generating improved quality of reports, reduction of time in generating reports and improved decision based on accurate and timely accounting information. With ERP, accounting and manufacturing systems can mobilize a single database and a single point-of-entry for information (Sayed, 2006). Technology and security - implement BS-7799 standards for data protection Each milestone in technology poses a new threat to privacy and personal safety. Smart cards with integrated circuits and high functional value are highly secure. Smart cards can serve as medical insurance cards, identification cards, credit cards and in fact, one single card can combine massive amount of information about an individual. Unfortunately, this too is considered as infringement of privacy because one single card can provide entire personal database of an individual (HRIS, 2003). While smart cards increase efficiency, it poses a threat to the right of self-decision and self-control over one’s personal information. Epstein (2006) contends it would require a great deal of chasing of people urging them to take smart cards. These cards are just like a chip and pin card and not biometrically secure. It is not a major step towards reducing social security frauds and is not even considered cost-effective in the long-run. The wireless technology used in smart cards could make it easy for thieves to extract information through portable scanners and electronically picking pockets. Germans claim that smart cards contain a digital signature algorithm, which makes it difficult to counterfeit other cards by extracting data from the original card (Koprowski, 2005). Banking would not be possible without IT and yet IT enables theft of account data as was the case with Bank of America and Time Warner in 2005 (Gleason, 2006). The electronic security systems have embedded flaws. The same technology that promotes online shopping also allows criminals to buy list of credit card and social security numbers from the black market. The effects of technology and ethics are hard to predict and are irreversible. Errors made by the computerized system makes it difficult to identify the person responsible for it and accountability is affected. The error could be caused by poor user interface, lack of proper training, errors in software but nobody is willing to accept responsibility. Computers have caused long distance learning, sending large amounts of data, messages, and video, using information databases, all these are really a part of the modern society. Availability of services and information round the clock has given flexibility to people to plan their schedules. Surveillance has become easier. Apart from cameras and microphones, transactional data is increasingly being collected for virtually all types of transactions, even cash purchases and the acquisition of services (Liffick, 1995). Ratnasingam (2002) points out the advantages of web services over the traditional business-to-business applications. Web services come with sophisticated software, management tools, navigation, search facilities; it can handle automatic price enquiries, process orders, or synchronize customer records. It is cheaper than traditional applications which require customized connection between each trading party. Rowan (2005) states that the traditional walls can provide user authentication and can control services but they cannot scan the information inside the data pockets. This has given rise to XML firewalls, XML VPNs, XML Security Gateways, Web Services Security Gateways. BBB (2006) strongly feels that firewalls and encryption cannot detect whether the caller is a genuine customer. Nevertheless, to offer secure web services it is essential that the business is complaint with BS7799 part 2 in line with the Data Protection Act 1998 (IAAITC, 2006). Conclusion and recommendation The explosive growth of internet and open growth of the telecom markets allow benefits for the sophisticated users but at the same time the security problems hamper progress. Messages can still be intercepted and manipulated, validity of documents can still be denied and personal data illicitly collected. Taking the various tools available for smooth business operations, assessment would have to be made keeping in mind the exact nature of business. Trying to cut initial costs would not have long-term benefits for the firm. These tools would help cut costs in every department including the HR. Investments in tools are substantial and the vendor selection has to be done judiciously. Web services require proper data protection and client authentication. Technology can cut costs but also create complications and thefts. Data security plan has to be in order. Besides, software alone cannot prevent employee error. The employees have to be trained properly in working with the software. With these in mind, one can incorporate and benefit from information technology which has something new on offer every day. References: AME (2005), How RFID can help optimize supply chain management, 31 Dec 2006 BBB (2006), Security & Privacy —Made Simpler, 31 Dec 2006 Epstein, R (2006), Smart card proposal attracts criticism from UK, 31 Dec 2006 Ferdows K, Lewis M & Machuca A.D.J, Zara, 31 Dec 2006 Gleason, D. H. (2006), Embedded ethics: how to build better IT mousetraps, Handbook of Business Strategy, pp. 325-329 HRIS (2003), Guide for Human Rights in the Information Society, 31 Dec 2006 IAAITC (2006), BS 7799 and the Data Protection Act, 31 Dec 2006 Oracle (2006), Weighing Your Options for Human Capital Management, 31 Dec 2006 Koprowski, G. J. (2005), German Law Paves Way for RFID Passports, 31 Dec 2006 Liffick, B. W. (1995), Social Impact Characteristics of Computer Technology, 31 Dec 2006 Ratnasingam, P. (2002), The importance of technology trust in web services security, Information Management & Computer Security, Vol. 10 Np. 5 2002 pp. 255-260 Rowan, L. (2005), Security in a Web services world, Network Security, Volume 2005, Issue 6, June 2005, Pages 7-10 Sayed, H E (2006), ERPs and accountants’ expertise: the construction of relevance, Journal of Enterprise Information Management Vol. 19 No. 1, 2006 pp. 83-96 Singh, A., (2003), SFA: virtual salesman, 31 Dec 2006 Smith, A. (2006), CRM and Customer Service: strategic asset or corporate overhead? Handbook of Business Strategy, pp. 87-93 Sutton, S G (2006), Extended-enterprise systems’ impact on enterprise risk management, Journal of Enterprise Information Management Vol. 19 No. 1, 2006 pp. 97-114 Twentyman, J., (2006), Buying ERP tools to fit the smaller business, 31 Dec 2006 Read More