Life Cycle of Information Systems

Sometimes, the information system in use by a business or an organization may no longer be efficient in meeting its purpose. Alternatively, advances in technology may have rendered then information system obsolete or the currently installed system may not be flexible enough to meet its objectives and expensive to maintain (Rainer & Cegielski 2009). To cater for any of the above shortcomings, it may be necessary to install an entirely new information system.

An effective overhaul needs to follow the Information Systems Lifecycle, which is the subject of this essay. The life cycle of an information system begins with the system analysis which consists of a feasibility study and an analysis of system requirements. If the project is feasible, the next stage in the design, where the information system specifics are established. After design, the system is implemented, which is the actual translation of design algorithms into a user interface or codes incase of computerized information systems.

The final stage in the life cycle of information systems is review and maintenance, which includes post-implementation evaluation, improvement and general maintenance (Rainer & Cegielski 2009). In the given scenario, the information system is failing since it cannot safeguard information. The birth of a new information system would start at an analysis to establish whether the photography printing store can foot the costs accruable in installing a computerized information system.

If the project is feasible, the attributes of the system and its requirements are determined before design begins. After the design algorithm is coded, it is tested for effectiveness and converted into an operational information system. The new information system is now up and running and in the last stage of the information system life cycle: review and maintenance. References Rainer, R. K. & Cegielski, C. G. (2009). Introduction to Information Systems: Enabling and Transforming Business. Hoboken, NJ: John Wiley & Sons.

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Organisations and Information Systems

After analyzing a branch of TK Maxx, the following conclusions have been drawn: The organization has a traditional hierarchical organization but after looking at the information flows, a flat structure is recommended. The current information flows and processes are effective and work well with the nature of the show. The information system is appropriate and meets the business needs as the information produced from the system is generating the required information has proved to be profitable. 1. 1 Introduction The organisation I will be looking at is TK Maxx which is a chain of an American company call TJX.

It offers brand name family clothing, giftware, home fashions, and footwear, at prices 60% below regular department and specialty store prices. I will analyse the way in which the store I work in operates, its organisational structure, the information flows and processes within the store. I will also reflect the suitability and value of the existing information systems. 2. 0 Organisation Structure Analysis “An organisation is a stable, formal social structure that takes resources from the environment and processed them to produce outputs”.

Organisational structure refers to the formal patterns of interactions and co-ordination that enable an organisation to achieve its goals. In order for me to study the structure of the store, I need to look at its organisation chart. By identifying the structure I will be able to distinguish formal relationships e. g. number of levels in the hierarchy and the number of managers/supervisors; The diagram above (Figure 1. 1) is the organisation chart for the store. The store’s current structure is a traditional hierarchical organization (tall structure) with many levels of management. The employees in the store are ranked at various levels.

At each stage in the chain, one person has a number of workers directly under them, within their p of control. According to the hierarchical structure, the store should be a centralised store; meaning that the head office (or senior managers) will retain the major responsibilities and power. If we look at TK Maxx in terms of one large organisation, than this theory is applicable. However, if I look at one particular store, than this theory does not apply. The store has implemented a vertical decentralisation; the senior management has handed the power to make certain decisions down the hierarchy of the organisation.

The middle managers have more control and responsibility to make decisions and this is simply because staff lower down the chain have a greater understanding of the environment they work in and the people (customers and colleagues) that they interact with. This knowledge and experience enables them to make more effective decisions than senior managers. 2. 1 Information Flows and Processes The formal information generally flows from higher to lower level. Commands, instructions, plans and delegated tasks are passed down the line management system through supervisors and managers to associates.

There are about 2-3 notice boards in the lounge area as a way of communication between management and staff. Any new promotions, or such information from the head office e. g. new tagging method, new staff etc is informed via these notice boards. There are monthly meetings for which associates are obliged to attend. General issues are discussed in the meeting. The management keeps details of the meeting stored on a computer and the main issues discussed are put up on the notice boards and it is updated after every meeting.

The store uses “Open Door Policy” to ensure that everyone is treated in a fair and equitable manner; the associates have the opportunity to speak openly bring up ideas and any concerns or issues they may have. An associate can talk to their immediate manager, their manager’s manager or a senior manager. Shows how the information needs at the three levels vary in terms of information type, its use and the role of the users within the store. Business processes are the ways in which an organisation coordinate and organise activities, information and knowledge in order to produce its products/services.des identifying the associates, their personal details, rates of pay and calculating employee earnings and tax payments.

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ROI of Business Information Systems

ROI of Business Information Systems

Abstract

The role played by information technology is critical as it greatly influences the extent to which the organization can make it as far as profitability is concerned. High returns on investments are realized when organization can carefully but firmly use various business information systems as part of their strategy. This paper explores the challenges being faced by Allegiant Air, a low-cost airline, in its operations, and proposes various information technology avenues it can exploit in order to overcome these challenges. The paper also makes recommendations to the company on how it can go about applying these business information systems; and finally predicts the implications the proposed solutions are expected to have on the company in a period of three years after they are pout to use.

Introduction

            Business success is largely dependent on how well the management team is able to put in place measures to deal with emerging concerns. Every organization has the capacity to assert itself as a force in the specific industry, and it is the use of different strategic plans that will determine the success rate of such an organization. Every organization is capable of making it in business if it commits to adopting strategies that sets it apart from other competitors. Communication in an organization is one major issue which, unless handled well enough, can spell trouble for an organization (Ludon & Laudon, 2007). The flow of information within the organization as well as between the organization and other external agencies or organizations ought to be enhanced in order to ensure that  organizational programs run as planned; and that unnecessary delays caused by communication breakdowns or misinformation are reduced or completely eliminated. Therefore, investment in information systems is a critical organizational issue and ought to be embraced (Ludon & Laudon, 2007). Although investment in a good information system might not in itself guarantee a good, high return on the investment that a business makes, it will surely go a long way in shaping the firm’s performance in the industry because information systems are among the tools that are critical in shaping organizations as far as strategy is concerned. International business organizations or those that are in one way or another involved in international trade deals ought to particularly use information technology as a tool to give them a competitive edge. Digital firms are at the risk of making the most losses if they are not able use their technology well enough (Ludon & Laudon, 2007).

Allegiant Air

            The air travel industry has been among the most revolutionary sectors that have changed the way the country’s economy performs. Since the Airlines Deregulation Act was enacted, airlines have been increasingly shaping themselves to compete using different avenues (Flightglobal, 2010). While the competition is fairly distributed throughout the industry and almost on a fair level, it is true that those airlines operating using the low-cost model are facing a lot more challenges. Allegiant Air is one such airline that has been facing challenges in the market that have a lot to do with its low-cost model of operation. Founded in the late 1990s, the company is hardly a decade old and is in the process of establishing itself to become a formidable force in the American market (Flightglobal, 2010).

 Allegiant Air was founded as a low-cost airline with its base in Las Vegas and has grown to become one of the leading airlines in the country in the low-cost category (Flightglobal, 2010). Allegiant Air has had to use alternative ways to source for its income because it cannot rely on income from the tickets only. The alternatives have ranged from sale of foodstuffs and water to passengers while on board, because unlike other ordinary airlines, there are no extra facilities or  services offered on board in order to minimize costs. With cost leadership as its main strategy, Allegiant Air has continued to grow in revenue and market share, increasing its flights to other cities which it never flew to before (Flightglobal, 2010).

The Current Business Issues of Allegiant Air

            Allegiant Air is just beginning to rise as a reputable airline after many challenges at the start of its operations (Flightglobal, 2010). Not that the company has managed to steer itself clear of challenges but it has fairly disengaged itself from the debilitating effects associated with new business start-ups. Presently, the organization faces a set of challenges which ought to be addresses if it is to continue to be profitable. Although there are many other challenges, the following are able to be addressed in one way or another through investment in some kind of information technology system (Flightglobal, 2010).

Poor Sale of Tickets

This is one of the greatest challenges that the airline is faced with and it stems from the fact that it has not been able to have a reliable and efficient ticketing system. Because tickets are the main source of revenue for the company, it really matters the amount that is sold. The challenge has been that although customers are not necessarily scarce, there has been a case where last minute orders for tickets caused by poor planning of ticket sales has made the airline to lose a lot of money in lost revenue. In addition, the failure to make tickets available to customers early enough has caused many to go for other alternative modes of travel, as they prefer airlines that offer flexibility (Lampl, 2003).

Flight Delays and Cancellations

            Although not a very frequent problem, Allegiant Air has at times been forced to delay its flights due to problems with issues like poor weather, aircraft breakdowns due to mechanical problems, among other issues (Gross, 2007). Such delays have been costing the company a lot because not only are the customers less prepared to take such matters lightly but they seek compensations for inconveniences caused. There has been a need for new ways through which customers can be informed about any changes so that they can be allowed a chance to make adjustments appropriately. Delays have also been caused by security and safety concerns.

Handling Long Distance Flights

            Allegiant Air operates across states, flying several times to neighboring states; and is planning to expand farther to other areas. That aside, the company has been operating chartered flights to faraway destinations which include going outside the country. As such, such flights have been difficult to coordinate because of lack of a centralized communication system between the company’s main offices in Las Vegas, Nevada, and the other destinations. It has resulted in a lot of losses being incurred because the company is often forced to use expensive means to communicate (Gross, 2007).

Stiff Competition

            Although the low cost model is controversial and challenging, it has been able to attract many players in the American market who concentrate on routes that are similar to those used by Allegiant Air. As such, the competition is very stiff and Allegiant Air is in need of new strategies to deal with it. So fierce is the competition that it is difficult for profitability to be sustainable unless measures are deliberately put in place to ensure that it stays ahead of the competition (Gross, 2007).

Low Niche Markets

            Allegiant Air has many times had to pull out of certain routes because they did not prove to be profitable enough. This has attracted a lot of criticism from other stakeholders who have accused it of making uninformed decisions and failing to carry out adequate market surveys before deciding which routes and/or markets are ideal for operations (Gross, 2007). The company has not really grasped what it takes to have customers flocking back, so that it keeps facing a shortage of customers. Awareness campaigns have often remained a challenging task for the company to undertake as effectively as it ought to be done.

Remedies to the Challenges

            All the above challenges can be resolved or at least minimized if the company considered a number of possible information technological systems to be applied as part of the long term and short term strategic plans. There is bound to be good returns on investments if the following approaches are explored:

E-Ticketing

            The use of electronic ticketing can go a long way in solving some of the company’s current problems because is the era of information technology is shaping the way virtually every business deal is done. Today’s generation of travelers is so IT-savvy that it is important to invest in technologies that will appeal to them if they are to remain loyal customers (Ludon & Laudon, 2007). Electronic booking and ticketing can minimize delays and the extra costs of hiring staff to process tickets. In addition, it will ensure that the expenditure that goes to agents or middlemen who specialize in distribution and sale of tickets is done away with. Otherwise, the company can use a mobile booking service where customers can use their mobile phones to call customer care to make bookings and payments for the tickets (Ludon & Laudon, 2007).

Extensive Data Mining

            Allegiant Air ought to consider investing in the deliberate collection of data from clients not only in areas where it plans to start operations but even in those where it is operating already. Data on customers can come in different ways and can be collected by different means because an understanding of the behavioral characteristics of customers will help the company plan and respond to their specific needs (Ludon & Laudon, 2007). A good point to start is setting up an interactive website where the company and its customers can freely exchange information on the value or services offered. This site ought to be used to gauge the response of customers to the services they are receiving, and as the basis for the company to act on any suggestions that they make. Interactions between organizations and clients can go a long way in establishing a rapport between them which in turn makes customers very loyal to the company (Ludon & Laudon, 2007). If Allegiant Air can successfully develop such an interactive site, not only will its customer base grow but also a lesser proportion of its expenditure will go into marketing or promotions.

Every customer is in need of being made to have a sense of belonging if he/she is to be expected to remain a loyal customer. The better the company is able to establish good relations with its customers, the higher the chances that it will be able to retain these customers (Ludon & Laudon, 2007). In order to retain customers, the airline needs to understand their specific needs and expectations, and so meet them. It is difficult, almost impossible, for information on clients to be sourced by direct interview or written questionnaires. Neither can it be ascertained by use of observation. The company can invest in an electronic system which can have clients providing such information every time they are booking for their tickets online or every time they disembark from the company’s airliners. Every customer needs to be treated with great honor and a lot of importance accorded to one. Only then will the company develop long term relationships with them, retain them, and have an assurance that its market is secured (Ludon & Laudon, 2007).

            Another very important area where data on customers is very critical is new or potential markets. Given that investments of the company in such areas has often failed in the past ending up in sudden withdrawals, Allegiant Air ought to use information technologies such as  mobile phones or the internet to find information on market trends in  areas where it seeks to venture (Hoover’s, 2007). Having this understanding will better inform it on how to go about investing there. For instance, the company can consider investing in electronic data registers to collect data on the proportion of people in a given city who are likely to use a low-cost airline, how many are already using air travel, how many are willing to switch from a high-cost to a low-cost model, the frequency of the use of air services compared to other modes of travel, among a host of other related information. Such knowledge might be hard to gather but it is possible to do it over a length of time. After all data mining is part of strategic planning and it ought to be embraced as much as possible.

Self-Service Kiosks and In-house Advertising

            In order to stay ahead of the competition, and given that Allegiant Air is a low-cost airline which relies so much on non-ticket sources of revenue for its growth, the company ought to consider investing in kiosks that sell services and products to customer on board (Gross, 2007). Customers  are becoming more technologically savvy and appreciate doing most of the processes on their own – from booking, ticketing, checking in, luggage handling, and even on-board services without the interference of any airline personnel. This will give them more satisfaction and so keep them coming back on successive travels. Digital kiosk can really revolutionize the airline and set it on a course for great future success (Gross, 2007). Advertising takes a significant share of Allegiant Air’s expenditure. Instead on using expensive TV commercials and newsprint media ads, the company can advertise using digital signage placed in its airliners, on seats, and overhead in passenger cabins. This will cost it less than outdoor advertising.

Recommendations

            The company’s executive committee has to act on a number of recommendations to be carried out over the next there years if the company has to overcome its challenges. In the next three months, the company ought to be in apposition to have developed a mobile ticketing system where instead of the customers having to come to the company offices, they can just call or text and ask to be booked in (Ludon & Laudon, 2007). By six months, an electronic ticketing system ought to have been developed and ready for use in addition to the mobile phone service. If this is done, six months on will see the company with an effective, fully operational electronic ticketing system, making the problem of ticketing to end or be minimized. Increased ticket sales will give the company a competitive advantage over rivals who do not have a similar system in place (Kilian, 2008).

The company also ought to begin data collection regarding customer satisfaction using the web by developing an interactive site. In three years’ time, Allegiant Air will be able to exactly know what the values and interests of the customers are, and so will be better placed to serve them. It is projected that its client base will in turn increase by about 40% depending on how well the data is collected. The company also ought to explore new markets for expansion, including the possibility of covering all the states of the country and even Europe and Latin America. To achieve this, it has to first of all find out the market needs by conducting a survey on market trends. By the end of three years, the impact will be that the company will be able to have expanded to include weekly flights to at least Mexico and Panama, and to have flights on about fifty other new routes. This will increase its customer base and enhanced its competitive edge and revenue collection (Gross, 2007).

Finally, Allegiant Air ought to start placing its ads within the passenger cabin of its airliners. This is expected to impact the sales of the company significantly and positively so that in three years the company will need to revert to strategies to deal with increased customers as opposed to seeking new ones. It will be a matter of trying to retain those customers already won over by seeking to make them loyal to the company (Gross, 2007). These recommendations are based on what has been observed and done by other low-cost airlines elsewhere, notably Ryanair of Ireland whose owners are part of the investment team at Allegiant Air. That Ryanair has been so successful in the European market after only 25 years in operation has been attributed to its decision to invest in digital technology. Its high return on investments (ROI) can serve as a model to spur Allegiant Air to adopt a similar strategic plan – the one being recommended here (Ludon & Laudon, 2007).

Conclusion

            The role played by information technology in shaping organizational performance is very big, especially when it is taken as part of the main strategic plan of the organization. It has been noted that quite often than not, high returns on investments are realized when organizations invest in information technology. Allegiant Air is a low cost airline with challenges whose solution largely lie in investing business information systems like electronic ticketing, booking, and seven checking in. Data mining approaches – the seeking to gather as much information as possible – aimed at understanding customer behavior and so serving them a lot better can also be better carried out by use of ideal IT solutions, including interactive websites. It is possible, if the recommendations made in this paper are followed by Allegiant Air’s executive committee, for the company to turn out as a very successful and competitive one in three years. Although it is neither a guarantee that every organization that applies itself to the systems will achieve success instantly nor will its success be exactly what it desired, so much benefits have been derived by organizations which have made investment in business information systems a key strategy in their organizations.

            Word count: 2,791

References

Flightglobal (2010). Airlines. Retrieved 03/27/2010 at:

http://www.flightglobal.com/articles/2008/06/17/224703/airline-it-trends-mobilised-change.html

Gross, S. (2007). Handbook of low cost airlines: strategies, business processes and market

 environment. Erich Schmidt Verlag GmbH

Hoover’s (2007). Hoover’s Handbook of Emerging Companies. Hoover’s

Kilian, J. (2008). Handbook of administrative reform: an international perspective. CRC Press

Lampl, R. (2003). Aviation and aerospace almanac 2003. Aviation Week Business Intelligence

 Services

Ludon, K. & Laudon, J. (2007). Management Information Systems: Managing the Digital Firm.

 Prentice Hall

Exhibits

1.      For more information on customer views about Allegiant Air, See the posts at: The Cranky Flier (2006). Who’s Allegiant. Retrieved 03/27/2010 at: http://crankyflier.blogspot.com/2006/09/who-f-is-allegiant-air.html

2.      Figure 1: Allegiant Air’s main routes (below).

Source: The Cranky Flier

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Managing Information Systems Case Study Ch. 9-Thl

Dawn Ruedy Case Study Ch. 9 THL 1. A. The benefits of having policy determined by rules rather than computer codes is the application programs in the Aurora system access and process the business rules when deciding vehicle availability. With rules being arranged and easy to use, an analyst is able to alter reservation policies without technical support from personnel. B. Some consequences of an incorrect rule being entered are blocking the correct vehicle from being rented, incorrect recommendations by renting the wrong vehicle in the wrong location.

As a result, business analysts may be unable to help customers. These mistakes could end up being very expensive for THL, costing them revenue by not being able to provide their customers with the correct services. Unfortunately, this could also throw future reports off that THL depends on. Some of these reports include vehicles that are to be checked out and returned to each rental location, which vehicles need to be transferred to a different location and which ones need maintenance. C. If I managed the reservation system at THL, I would use the Expert systems process for the modification of rules.

By applying the If/Then rules and processing those rules to make a diagnosis or recommendation, decision making would be improved by the nonexperts by encoding, saving and processing expert knowledge. 2. A. The value $3,697 is the total of the car rental brands Maui ($1,577) and Britz ($2,121) in Australia in April of 2005. $1,577 is the dollar amount spent on the Maui car rental package in Australia in 2005 and $2,121 is the dollar amount spent on the Britz car rental package. B. The Britz package is more popular package than the Maui package in Australia.

THL is making no money on the Backpacker and Explore More packages. New Zealand rentals are more profitable. C. If the first column (geographic area) was switched with the third column (brand), I think on the left AU and NZ would be seen. Then, to the right would be the amounts for each of the 4 packages and the totals. 3. Customer Reservation Data: A. Report Applications-which package was the most profitable and how much it was requested by customers. B. Market-basket analysis-which products could be purchased together C.

Unsupervised data mining-review the data and observe the results, Cluster analysis D. Supervised data mining-predict when repeat customers will return- E. I like D the best, because it helps bring repeat customers back, C is good too because it describes who their customers are. I would then choose A to understand customers and how they should advertise. Last, I would choose B. 4. A. I choose California to have the best chance at success in the United States. California offers a variety of activities including beaches, Disneyland, national parks, mountains and wineries.

California is a larger state with a variety of climates and sunshine. Market size would be larger than the other options, which I would assume means a better economy and more money to spend. B. THL’s competitive advantage is their experience in this tourism area, having operations internationally. C. THL’s competitive vulnerabilities include figuring out their clients and how to approach the market and competition. D. The online reservation system adds value to the new operations by its easy to use functions and convenience for customers.

E. Since THL headquarters will be so far away from the new US business, building a trusting relationship with customers may become a problem. Not having any face to face relationship building. Of course, this can be remedied with video chatting and new technology. 5. With the use of social media and their website using webcams, THL can see what their clients are saying about their customer service and if they are satisfied. Which will then help THL make improvements to their services and products.

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Characteristics of the Accounting Information Systems

An accountant plays a vital role in any business; one can even say they are one of the most influential practitioners. For instance, accountants participant in generating rules and guidelines, advising day to day business activities, and even decision making. While the IT and IS communities are used frequently in many businesses, they are not the founders of the characteristics of useful information. The key reason behind this is due to the fact that accountants are the users of IS and IT communities.

As being the primary users, one can expect the characteristics, rules, and guidelines for an information system to be designed by the accountants themselves. In a broader view, “accountants can assume three roles: designer, user, and auditor” (Gelinas, Dull 27). As a designer, the accountant can offer its knowledge of various principles (accounting principles and auditing principles), and various methods and techniques (information system and system development).

In designing an accounting information system (AIS), the accountant can answer various questions that relate back to the seven characteristics of useful information systems. Some questions may include: “What will be recorded and how will transactions be recorded? When will the transaction be recorded and when will they be reported? What controls will be necessary to provide valid, accurate, and complete records? How much detail will reports need? ” (Gelinas, Dull 27). If accountants did not design the AIS then these questions may be left unanswered without their expertise.

Accountants perform many functions in an organization such as a “clerk, controller, treasurer, tax specialist, and financial analyst” (Gelinas, Dull 27). Therefore, it is necessary for them to use the AIS to perform their duties. As a user, it is imperative for the accountant to participant in the AIS process to make sure it contains the required features. In addition, knowing how to use the AIS technology would be very beneficial in working effectively and efficiently. For example, a financial analyst would need to know how to store the data and access it, and how to present the information.

Finally, as an auditor, one of their main interests in the AIS is the reliability of the data. Without reliability, auditors cannot “provide an opinion on the effectiveness and efficiency on internal controls” (Brazel 38). Accountants will remain the main users and as a user, an auditor as well. With the seven characteristics in mind, could they have evolved from the past? With technology not being as easily accessible as in today’s accounting world, one can assume that information was not as relevant, reliable, timely, or accessible.

In relation, modern technology is so efficient in today’s world; therefore the flow of information can be quickly exchanged at any time. For example, Internet has allowed companies to send reports across the globe at any given time. This ability gives accountants easy access to information and timely information. Without timely information, relevant and reliable information would be impossible. However, one possible disadvantage in today’s accounting world may be the relevance of the data. With such easy access to information, it can be more difficult to narrow down that information to its essence.

Having too much information can make AIS more difficult to understand and increase uncertainty. Without being able to understand the AIS, an accountant cannot verify the same information. All these characteristics come hand in hand; if one characteristic fails then other characteristics will be affected. Although today’s accounting world has greatly shifted from the past, one cannot deny that the accounting community has always had a major impact in generating the characteristics of useful information.

Older accounting communities created the building blocks of the characteristics. Technology merely enhanced the flow of information and efficiency. Accounts will remain the designer, user, and auditors of the AIS. Work Cited Brazel, Joseph. “How Do Financial Statement Auditors and IT Auditors Work Together? ” The CPA Journal (2008): 38-41. Print. Gelinas, Ulric J. , Richard B. Dull, and Patrick R. Wheeler. “Chapter 1: Introduction to Accounting Information System. ” Accounting Information Systems. Mason, OH: South-Western Cengage Learning, 2012. 27-28. Print.

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Information Systems Case Study

Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies J. G. Thoburn Coventry University, UK S. Arunachalam Coventry University, UK A. Gunasekaran University of Massachusetts, North Dartmouth, Massachusetts, USA Keywords Information systems, Agile production, Small-to-medium-sized enterprises Introduction Today, manufacturing organisations are increasingly required to be highly optimised.

Abstract The ability to respond swiftly and effectively The necessity of maintaining optito produce new products and services has mal operations and becoming an agile and responsive enterprise is become not so much a method of gaining competitive advantage, but more a means of becoming increasingly important to survive in the global market. survival. Many companies have seen the need Consequently, all resources in the to adopt a whole range of practices that reduce companies need to be effectively inputs and waste, and allow greater responmarshalled.

Traditionally SMEs siveness to customer needs and the markethave concentrated on the 4Ms ± money, materials, machine and place. In reaction to changing requirements manpower but have often neand conditions, manufacturing paradigms glected the effective management continue to be defined. It is possible to identify of information, which many authors suggest is at the heart of two trends: those addressing predominantly any agile organisation.

The effect the relationships required in local and global is inadequate or fragmented infor- trading environments such as that described mation systems (IS) that do not by Porter (1996) and those systems focusing on address the demands of operational or the wider strategic needs organisational structures within an enterof the company. The study reprise such as business process re-engineering ported here examines the diversi(Hammer and Champy, 1993).

Arguably, the ties of problems that occur in agile manufacturing paradigm combines both. three different companies and, Changes in information technology and compares their systems to the communications in the last two decades have ideals of agile manufacturing. further shifted the balance towards the customer. There has been a huge growth in the number of computers in use, putting huge power on the desktop, at ever-decreasing hardware cost.

The arrival of the Internet and the expansion of the free market in telecommunications present the option of simple and low cost communication. Now it has become easy for all players in the supply chain, or even individual consumers, to measure specification, price and supply performance against their needs. They can purchase goods that precisely meet their requirements from anywhere in the world, bypassing any perceived shortcomings of their local marketplace.

In response to the need for agility or the requirements to link different parts of the International Journal of Agile organisation or elements of a supply chain Management Systems 1/2 [1999] 116±126 effectively, systems are emerging that may # MCB University Press fundamentally change the organisation of [ISSN 1465-4652] manufacturing. In order that they might [ 116 ] achieve this, companies must clearly understand and organise their information resources at the earliest possible stage in their development.

It is clear that only those enterprises that are able to respond to market demands with minimum delay will survive. Kidd (1996) argues: The agility that arises can be used for competitive advantage, by being able to respond rapidly to changes occurring in the market environment and through the ability to use and exploit a fundamental resource, knowledge. People need to be brought together, in dynamic teams formed around clearly defined market opportunities, so that it becomes possible to level one another’s knowledge. Through this process is sought the transformation of knowledge into new products and services.

High reaction flexibility will be no more than a qualifier in the future, just as high quality is today. This flexibility cannot be realised by high-tech equipment alone. Human creativity and organisational ability, if necessary supported by advanced computer based tools, will be the basis for survival and success strategies. This paper describes studies over a period of 15 months, of three companies, and analyses how far they are away from possessing the ability to become agile, by examining the areas that were dysfunctional.

It explores the importance of information management and appraises information systems in place in these companies. It discusses the need for a more structured and holistic approach to transferring information in its various forms to the different areas of an organisation, aiming to give optimal access to information while eliminating wasteful duplication as well as generating and testing new knowledge about the firm’s changing requirements. Information defined The term information is widely and often inaccurately used. Many authors agree that J. G. Thoburn, S. Arunachalam and A.

Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 there are three elemental types: data, information and knowledge. However, this paper argues that there is a fourth, intelligence, which is distinct from the others. All but data require an understanding of the socially defined context ± where the information, knowledge and intelligence came from, the assumptions surrounding them, and their importance and limitations. Each of them may be defined as follows: .

Data: a series of observations, measurements or facts. . Information: information is data organised into meaningful patterns by means of the application of knowledge. The act of organising data into information can itself generate knowledge, when a person reads, understands, interprets and applies the information in a specific work situation. . Knowledge: the intellectual capital resident within an organisation. The facts, experiences or competencies known by a person or group of people, or held within an organisation, gained by individual or shared experiences, training or education. Intelligence: what a company needs to know about its competitive, economic, technical and industry environment to enable it to anticipate change and formulate strategies to best provide for the needs of the marketplace and its specific customers. Yet many aspects of a company’s IS are based, not around formal or technology based solutions, but rather on informal or human oriented systems. Mintzberg (1997) examined a wide range of managerial work, predominantly in large organisations. He reported that managers, while 40 percent of their time was devoted to gaining and sharing information, usually used informal systems centred on people.

Nevertheless, he concluded that: the job of managing is fundamentally one of processing information. that managing a company was essentially a matter of control. However, this implies a rigidity of framework and formality that does not fit well with today’s organisation, and certainly does not promote agility. Flatter, less hierarchical business systems localise control and make it difficult for management to achieve enterprise-wide regulation. Smith (1984) however, believed that the vitality of living systems was not a matter of control, but rather of dynamic connectedness.

Veryard (1994) argues that: systems are a dynamic interplay between adaptation and non-adaptation. This is precisely what is required in agile organisations, where there remains the need for stability and accountability, in an environment of necessary and perhaps rapid change. Dynamic connectedness in an agile organisation is provided by the flows of formal and informal information. Veryard further suggests that: the future belongs to symbiosis ± external integration in pursuit of common business aims. The authors’ research and experience shows that informal systems are equally important in every part of the organisation.

This appears to be especially true in smaller organisations, where they have less developed formal systems, or formal systems are not performing optimally. In order to better understand and integrate the IS, the vital role of informal systems must be taken into account. The need for information systems in SMEs to successfully communicate and control For the better part of this century, classical management writers such as Henri Fayol (1949) and Gulick and Urwick (1937) taught This is evidenced in those extended enterprises now reported to be emerging.

If this biological view is pursued, it can be seen that biological organisms, especially human ones, achieve precisely the continuous adaptation that is described in the agile paradigm. The most successful individuals are able to blend information from their external environment, with knowledge of their own capabilities, using formal and informal systems, whilst retaining information and knowledge in memory. There is constant building and retention of knowledge, with competencies taught by example as well as by the formal methods to be found in education and training.

Concurrently, many of the control and co-ordination systems, even those learned, become largely autonomic, permitting more effective processing of environmental and circumstantial changes. Such systems may be clearly observed at work in individuals when they are, for example, driving a vehicle. Failure to function effectively in those circumstances leads to severe consequences. Also, by combining with other individuals, capabilities may be extended to be far more than the sum of the parts.

Accordingly, biological systems may provide useful models for what may be expected to occur in manufacturing organisations of the future. With biological organisms, the need for adaptive ISs is most profound in growth and early learning stages, or in times of a significantly changing environment. Failure to adapt and learn from conditions [ 117 ] J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 ay lead to survival difficulties. Similarly, small or growing companies, or those adapting to rapidly changing market conditions will require a dynamically linked IS that binds together all parts of the enterprise, and allows it to adapt to its external environment. This may be very different to the rather rigid systems of the past, operating on pre-defined rules and algorithms. Yet it must be within the reach of the smallest company functioning at low resource levels, which may well preclude expensive and complex IT based systems.

Information management differences between large companies and SMEs The EC and the UK Government’s Department of Trade and Industry have identified SMEs as critical to future economic growth and job creation within the European Union. They form large and important sectors in most industrialised countries, especially in Europe and the USA. Yet significant differences exist between the management of SMEs and larger companies, where much of the research in this field is concentrated.

Just as a small fishing boat and a passenger liner may share the same ocean, so SMEs share the global trading environment with large organisations, and are no less susceptible to environmental effects. Indeed it may be argued that just like the smaller vessel, they are much less able to ride out the storms of uncertainty and rapid change, because of their lower resource base. As a result, they must be more, not less vigilant and adaptive than their larger counterparts, with intelligence systems able to influence their strategy and knowledge base much quicker.

The Society of Practitioners of Insolvency in the UK concluded (SPI, 1998) from their 1998 survey that many companies, mostly SMEs, fail from lack of information ± with loss of market being the single most important factor. Case studies Research took place in three companies over a period of three months with Company A, and more than six months each for Companies B and C, when one of the authors was in daily attendance. The companies were self-selected for study. Full access was allowed to every part of the business, its operations, management and financial systems, and to all employees.

Research took the form of observation, participatory ethnographic and action research. Questioning of employees used unstructured or semi-structured interviews. [ 118 ] Company A was part of a large international group, operating in a number of countries and in every major geographical area in the world, with a group turnover at the time of the study around ? 1 billion. The group consisted in total of eleven divisions each producing a different product. The division studied was located in France, and had approximately 200 employees. The company has been established a number of years and operates under an ISO 002 based system, as well as a number of other quality assurance regimes. The organisation manufactured a variety of special, large-scale products for the oil field, nuclear and defences industries worldwide. These complex products were produced individually to specific customer requirements. Lead times on nuclear products ranged from one to two years, and for the others, from six to 12 months. The products were manufactured as individual one-off specials, in a job-shop operation. The company was divided into seven departments, three by product sector, and the remainder by function.

One of the latter was the information technology department. Unlike other departments, although it had a functioning office in the French division it was not a part of the local company; IT was attached directly to the parent company in Germany. Its responsibilities encompassed the development and operation of the main computer and software systems used on the site for production management, purchasing, sales, production costing, and time and attendance systems. The department had additional responsibilities for networks and PCs which variously ran under MsDOS, Windows and Macintosh formats.

Where information transfer took place between departments, it was almost entirely carried out manually, transferring information to paper, and then manually transferring it to the next system. No section used the same nomenclature or data dictionary for parts and components. The organisational design was partly hierarchical and partly a matrix structure, and used a predominantly formal communications network. There were a substantial number of formal and informal meetings, through which much of the departmental and inter-departmental co-ordination was attempted.

All formal systems describing the company’s operation and administration were well documented. Each department, though relatively autonomous, seemed to be run with apparent efficiency. The operations and production management elements were especially highly developed, Company A J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 and had been subjected to repeated internal scrutiny as well as by local universities.

Despite this, the company experienced considerable difficulties in meeting quoted leadtimes. Those lead-times were already longer than their major competitors, and the company was also losing price-competitiveness. As much as 50 percent over-run on lead times was common, and substantial underachievement of possible turnover, and erosion of market share resulted. Otherwise the company and its products enjoyed a long-standing high reputation, though the managers believed that without this, considerably greater erosion of market would have occurred.

Their major competitors, predominantly Japanese and American, through price, technical improvements, and a significantly better responsiveness and delivery performance, were nevertheless making increasing gains at the company’s expense. The company was a self-contained profit centre, a division of a larger group that trades throughout the UK. There were approximately 25 employees on the site, though there were wide fluctuations in the total due to a self-imposed seasonality in turnover. Certain support services such as accounting and human resources management were provided from the central holding company.

Otherwise the company was responsible for all aspects of its operations. The company was engaged in metal finishing to the engineering industry and as a first tier supplier to several Original Equipment Manufacturers (OEMs). It had two production lines and operated under an ISO 9002 system. The formal IS of the company revolved around the sales order processing (SOP) system operated from group headquarters and accessed remotely over a fixed link. SOP formed part of a non-standard accounting system, originally written for another group company operating in a non-manufacturing sector.

The system itself was user unfriendly and slow, and no intuitive use was possible. At the start of the study only one person, the production supervisor, had any training in SOP. However, that training gave even him only limited knowledge of the system. Cryptic codes and generic descriptions entered by him into SOP made it impossible for others to distinguish between one product and another, and the division could not operate in his absence. Product and process knowledge was almost wholly vested in the production supervisor’s head.

There was no formal planning or production scheduling system, and no collection system for information concerning production times and material usage. Inter- Company B nal and external rejects were not generally noted or analysed. The company had three stand-alone personal computers, two of them extremely outdated. The central management-accountant exercised the most stringent control, and the company was expected to make bottom-line operating profits each month. The whole operational objectives became focused only upon this, and ignored other fundamentals.

To reduce costs, “non-essential” spending such as machine maintenance, health and safety, training, housekeeping and sales were ruthlessly cut. Those “savings” often represented all of the profits made by the division. The lack of an IS significantly increased the time spent preparing reports, reduced their accuracy and eroded local management time. At the start of the study, new management was installed in the company. Several initiatives aimed at improving operating performance were considered. The absence of any suitable or appropriate IS soon emerged.

In some cases, lack of coherent historical information prevented the justification of proposed initiatives, while the effectiveness of others could not be judged within the imposed monthly timescale. Machine and process measurement systems were designed and put into place. They quickly showed that processes were incapable. Similarly, measures of rejects and returns showed that external rejects were in excess of 30 percent while internal rejects were almost 60 percent. An analysis indicated the causes of the problems, and allowed them to be addressed.

Reject rates fell to less than 1 percent within a few weeks. However the centre continued to rigorously apply the accountant’s previous control measures. A monthly operating profit remained a continuous and absolute requirement even though large backlogs of rejects, and uncoated, badly corroded customer parts required processing, and machines needed to be brought to reliable operating condition. Consequently, employee training was vetoed, and workforce stabilisation measures overturned. In a climate previously dominated by dismissals and redundancy, the workforce actively delayed the implementation of an IS.

After some time, substantial employee involvement began to overcome this barrier, and they became enthusiastic participants in data collection and process improvement. Customer confidence began to return and the customer base marginally improved. However, the new IS also begun to uncover previous managerial shortcomings, especially at group level. In response, draconian short-term financial measures were applied [ 119 ] J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 rom the centre, and initiatives overruled. The workforce was further reduced, and training programmes cancelled. Workforce morale and customer confidence fell sharply. The division has now closed. Company C was a private limited company, whose directors were its owner-managers. There were approximately 60 employees, with recruitment rising because of rapid growth and expansion. The company was in its third year of trading. The company operated under a newly introduced ISO 9002 based system. The company had two product lines. The first produced simple, low volume components for the automotive sector.

The second built components for the machine tool industry. The operations involved in both of these activities were largely manual. The second group of products were much more complex ± many containing more than one thousand sub-components. A number of variants of each were produced, and all work was carried out by hand. Much of the information within the company was held on personal computers. The internal system was networked into three sections; operations management (OM), purchasing and administration. OM includes quality assurance and control (QA), and a computer aided design (CAD) station.

Each section was independent of the others. Employees were inadequately trained in the use of software and frequent problems arose through their lack of understanding of the packages in use. There was considerable duplication of data entry, with employees in each of the sections entering and extracting information in an unstructured manner. Where information transfer took place between sections, it was almost entirely carried out manually, transferring information to paper, and then manually transferring it to the next system. No section used the same nomenclature or data dictionary for parts and components.

Manufacturers’ references and descriptions were entered in a casual and unstructured way, making cross-referencing impossible. The data structure of each system was entirely different, and there were further large differences even within systems. CAD and QA were not integrated into the OM system. Consequently, internal systems were largely unsynchronised. As they grew in size, so the problems that they created were progressively magnified. Build and wiring order was an important factor, particularly in the case of control cabinets. It could significantly affect productivity, quality and finished appearance.

Company C Consequently, the order and format of cutting and build lists were central to production aims. Despite this, methods of list production failed to recognise this. It was difficult to derive build-order from examination of design information alone. Product variants caused additional difficulties and required translation by unskilled production operatives. As a result, operatives frequently transferred build instructions onto handwritten sheets and maintained unofficial work instruction systems. There was no formal method of transferring or retaining their build-order knowledge.

Comparative attributes, and a summary of the most significant problems arising from the collection and use of information, knowledge and data for each of the three companies are shown in Table I. Identified success factors/ dysfunctional areas In order to more accurately compare and analyse the areas of dysfunction in each of the companies it is necessary to use an objective measure. Bailey and Pearson (1983) have produced one of the most definitive and widely used lists of factors that identify the success factors in ISs. Li (1997) added a further seven factors.

These 46 elements have been used to form a matrix, shown in Table II, against which the ISs of the case study companies can be compared. However we have made minor modifications to some of the original criteria to widen references from a computer based information system (CBIS) to simply information system (IS). A hash (#) is shown in the description in these cases. A seven-point scale has been used to describe the degree of success or dysfunction of the IS when first observed. The scale used is as follows: 0 Not applicable 1 Significantly unsuccessful or dysfunctional 2

Moderately unsuccessful or dysfunctional 3 Broadly neutral ± neither successful nor unsuccessful 4 Moderately successful 5 Significantly successful X No information available. Discussion and analysis The companies studied were self-selected, with the only common factor being that they were experiencing operational difficulties which extended to their trading environment in one form or another. There was nothing to suggest that they were other than typical of [ 120 ] J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies

International Journal of Agile Management Systems 1/2 [1999] 116±126 Table I Company attributes Company B UK Manufacturing General engineering Throughout UK Yes Yes 25 Very high Low ? 170k ? 40 million Low Hierarchical High Very low Central Mixed, central file server, local PCs High Low Very low Yes No Very low Manual Management accountant Very high Yes Medium High Very Low Yes Yes Low Directors High Yes Company C UK Manufacturing Automotive/machine tools English Midlands No N/A 60 Fairly high Low ? 1. 8 million ? 1. million Both high and low Team based Low Medium Local owner/directors Local PCs Characteristic Company A Country of operation Type of company Sales sector Sales area Part of a group High degree of central control Approximate number of employees on site Employee turnover rate General level of employee skills Approximate site sales turnover Approximate group sales turnover Product complexity Organisational structure Organisational formality Degree of manufacturing sophistication Origin of principal control Type of information system

Degree of manual systems Degree of computerisation Degree of IS training Islands of information Local networking Degree of IS integration Transfer between systems Provider of IT support Informal information systems External audit systems (e. g. ISO 9002) France Manufacturing Nuclear engineering/oil and gas production Worldwide Yes No 180 Low Very high ? 12 million ? 900 million High Hierarchical/matrix High Very high Local Mixed, central mainframe (financial), local mainframe and PCs Low High Medium Yes Some Low Manual IT department Medium Yes 121 ] (continued) J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 [ 122 ] Table I Company B . . . . . . . Characteristic Company A Company C Principal symptoms . . . . . . . Poor lead time performance Higher prices than competitors Loss of market share Serious loss of available turnover through lower throughput times . .

Poor quality performance Poor lead time performance Extremely small customer base offering low value work Low profitability High degree of seasonality Poor quality performance Poor lead time performance Poor cash flow Frequent stoppages due to material shortages High degree of duplication and wasted effort Principal causes . . . . . . . . . . . . . . . . . Failures in communication in verbal systems ± formal and informal Need to manually transfer data between separate IT systems leading to delays and inaccuracy Poor communication with suppliers and failure to keep adequate ata on vendor performance Lack of unified IT and IS strategy . . . . . . . . Lack of any formal operations management and scheduling system Failure to keep manufacturing performance records Control using inappropriate measurements Failure to monitor customers’ records and address reasons for erosion of customer base Failure to understand market conditions Failure to understand employment market Self-imposed seasonality High staff turnover and absenteeim Constant loss of skills and competencies Lack of skills sharing Poor training Inappropriate SOP system

Information systems unable to cope with rates of growth Unstructured data gathering Inappropriate transfer of information to factory floor leading to proliferation of informal systems Failure to feed back information and knowledge from production Failure to understand employment market Limited knowledge base and deliberate limiting of skills base Lack of understanding of quality failures Lack of appropriate IT training Inappropriate IT systems Ad-hoc IT systems leading to Lack of unified IT and IS strategy

J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 Table II Success factors and dysfunctional areas Factor no. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Description factor Top management involvement Competition between computer based information system (CBIS) and non-CBIS units Allocation priorities for IS resources (#) Chargeback method of payment for services Relationship between users and the CBIS staff Communications between users and the CBIS staff Technical competence of the CBIS staff Attitude of the CBIS staff Scheduling of CBIS products and services Time required for systems development Processing of requests for system changes Vendor’s maintenance support Response/turnaround time Means of input/output with CBIS centre Convenience of access Accuracy of output Timeliness of output Precision of output Reliability of output Currency of output Completeness of output Format of output Features of computer language used Volume of output Realisation of user requirements Correction of errors Security of data and models Documentation of systems and procedures User’s expectation of computer-based support User’s understanding of the systems Perceived utility (worth vs. ost) User’s confidence in the systems User’s participation Personal control over the IS (#) Training provided to users Job effects of computer-based support Organisational position of the IS unit (#) Flexibility of the systems Integration of the systems User’s attitude toward the IS (#) Clarity of output Instructiveness of output Support of productivity tools Productivity improved by the IS (#) Efficiency of the systems Effectiveness of the systems A 3 2 3 X 4 4 4 3 3 3 2 X 4 4 4 3 2 3 3 2 4 4 4 2 4 4 4 5 4 4 4 4 4 4 4 4 4 2 2 4 4 4 4 4 3 3 Company B 1 1 1 2 1 1 2 1 1 1 1 1 1 3 2 1 1 1 2 1 1 1 1 2 1 1 3 1 1 1 1 2 1 1 1 1 4 1 1 1 2 2 1 1 1 1 C 2 3 2 0 4 2 2 2 2 2 3 1 2 3 4 2 2 2 2 2 2 2 3 2 2 2 1 2 4 2 3 3 4 4 1 2 5 4 2 4 3 3 2 2 2 2 companies of their size or sector. The studies aimed to determine the extent of use of ISs, report effectiveness and what contribution, if any, their systems had to the areas of dysfunction. They were intended to be preliminary studies from which initial conclusions could be drawn, with reference to published work. By spending a considerable amount of time in each company, and becoming involved with various aspects of their operations, and interacting with employees at all levels in each company, there is a high level of confidence that the systems observed were unaffected by short term experimental bias.

Company A, with the highest turnover and backed by a large multi-national parent company was the most resource rich [ 123 ] J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 company. It possessed a highly sophisticated and well-designed production and operations management system, backed by logistics, quality and design departments each equally efficient in their own right. The IS appears from Table II to perform reasonably well. Yet consistently it was unable to meet promised lead times, often by a substantial margin.

It was found that the purchasing department was at the centre of many of the problems, with poor communication with suppliers, and adversarial purchasing based principally on price. The consequence was many late deliveries and variable quality. Yet the true cause of the problems was not discovered to be there. The principal means of information transfer between different sections of the company’s IT system was manual. Because of incompatible systems, even at PC level, where both Apple and MsDOS based systems were employed, communication was impossible. Each department’s system had grown on an ad hoc basis to fulfil its own needs, without reference to others. Each data transfer took place using printed information, usually in the form of schedules, which was translated, then re-entered manually.

There were often delays, some considerable, while this process took place. Subtle yet cumulative changes of data and information took place because of translation errors. This had the effect of de-synchronising the whole system. But the most significant effects on leadtime were not to be found in the IT system, but rather in verbal communication systems. A large number of formal and informal meetings were held to exchange information often in response to increasing delays against the planned schedule. In response to pressure, the spokespersons from individual departments often gave incorrect answers, sometimes inadvertently because of the cumulative errors or delays in information transfer.

Other times, errors were deliberate, where attempts were apparently made to save face, or under pressure from a senior manager or colleagues, to agree to plans that they knew to be unrealistic. Different participants often repeated this process in turn during a meeting. Accordingly, this information was recorded and became crystallised into the formal system with the result that delays were progressively magnified. Thus it was lack of true dynamic connectedness of the system that created the problems that led to continual poor lead-time performance. In contrast, the IS in Company B was not only seriously deficient and absent in many places, but was dysfunctional in every area where it did exist. IT systems were limited, unfriendly and uncoordinated, with training and documentation absent.

In the wider system information, and particularly feedback, was deliberately withheld, and knowledge generation stifled in response to the corporate culture. The annual haemorrhage of accumulated skills combined with the lack of training and poor human resources policies substantially added to the problem. Inappropriate measurement and control of the feedback systems that did exist reinforced this culture, and the problems that were occurring. Because of poor management techniques, both internal and external intelligence was ignored for considerable periods of time. At the times attention was placed upon this aspect, the system was incapable of multiple focus, and one set of problems was replaced with another.

The response of senior group managers was particularly interesting. As IS was put in place or repaired, long-accumulated problems began to emerge which pointed to previous management failures. Their immediate response was to try to dismantle newly implanted systems, and halt knowledge generation and dissemination, and return to the previous culture. Once they took these steps, failure was inevitable. In Company C, the problems were quite different. There was a clear belief in the ability of computers to solve problems by their mere presence. Yet the growth and structure in their IS was wholly unplanned and uncoordinated, and was incapable of supporting the rapid growth of the organisation.

There was substantial redundancy and duplication of software systems, and poor understanding of their capabilities that led to the disablement of important reporting and control facilities. Poor system management and training allowed proliferation of duplicated files, and it was often difficult to determine the correct version of any instruction. As a consequence, a considerably higher level of employee time was expended than necessary, substantially increasing costs. Poor data gathering, knowledge management and information generation techniques exacerbated these problems, and informal systems proliferated. Yet simple trial measures to return acquired manufacturing process and merge formal and informal systems, improved quality, productivity and worker-satisfaction.

Information systems in an agile company should contribute to responsiveness as well as to overall corporate and organisational aims (Burgess, 1994; Goldman and Nagel, 1993; Kidd, 1994). There are a number of broadly accepted principles of the agilemanufacturing paradigm that provide the [ 124 ] J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 basis for a rapid and flexible response to changing trading conditions. That is to say there is emphasis on strategies (Goldman et al. , 1995), technologies, systems (Cho et al. , 1996; Gillenwater et al. , 1995) and people (Goldman et al. , 1995; Kidd, 1994).

In many cases, many authors have placed great emphasis on the technological capabilities of the organisation (Adamides, 1996; Medhat and Rook, 1997; Merat et al. , 1997). Such resources may not be available to smaller companies. Does this necessarily mean that small companies may not be agile. This would be directly contradictory to the long held view that the strength of smaller companies is their inherent flexibility and responsiveness. Nevertheless, from the comparisons shown in Table III it is possible to conclude from this study that the more dysfunctional, and less dynamically connected the IS, the less able the company is to achieve agile outcomes, flexibility and responsiveness, in the broadest sense of its definition (Gehani, 1995; Kidd, 1996). Conclusion and implications

In this section consideration is given to three broad issues arising from the case studies: potential implications of the results; preliminary conclusions; and plans for further work. The studies found broadly in line with previous work, though we have suggested that the normal three-part definition of information of data, information and knowledge be extended to include a fourth, intelligence. We have further observed the fundamental importance of informal systems particularly in the case of the two smaller companies B and C. Here personnel at every operational level relied heavily on informal information, and constructed their own systems, either to protect their position, or to operate more effectively.

We have also propounded the biological view that human behavioural systems in particular provide a useful view of how responsive organisations should behave if flexibility and responsiveness is the desired outcome. This paper then considered the companies against the background of agile manufacturing and compared their actual performance to the ideals of the paradigm. It can be concluded that in every case in this study, the more dysfunctional and less dynamically connected the IS, the less able the company is to be agile in the broadest sense of its definition. However current tools and techniques of evaluation and design of ISs are far less well

Table III Comparative performance against agility principles Company A Strategy Agile principles Technology Systems Lack of direct integration of IT systems and connectedness of IT and people-centred systems Absent, deficient or dysfunctional. Without effective coordination or integration People Flexibility Outcomes Responsiveness Low Good strategic Good to awareness excellent Low People highly trained, valued and rewarded but failure in communications in people-centred systems People poorly valued and rewarded. No training and deliberate withholding of knowledge in response to company culture Poor B Poor strategic Badly provided, maintained and awareness ± understood with lack of internal and external intelligence Poor C Strategy held in individuals at board level

Limited, uncoordinated and unplanned. Computers seen as an answer by simply being present Uncoordinated and incapable of adapting to rapidly increasing demand Poor HR policies Rapidly decreasing leading to staff shortages and low reputation. Poor knowledge management Rapidly decreasing [ 125 ] J. G. Thoburn, S. Arunachalam and A. Gunasekaran Difficulties arising from dysfunctional information systems in manufacturing SMEs ± case studies International Journal of Agile Management Systems 1/2 [1999] 116±126 suited to the needs of many companies (Sauer and Lau, 1997), SMEs in particular, and the achievement of their strategic, commercial and operational goals.

This suggests that a new and simpler technique is required that aims to lay down the foundation for an IS at an early stage in the development of a company. This system must be capable of being applied by non-specialist managers in circumstances where there may be a mix of information technology and manual systems. Nevertheless it must be one that incorporates the four elements of information that have been defined in this paper. Work to devise such an audit and planning tool, together with a methodology for its application, is currently being undertaken. References Adamides, E. D. (1996), “Responsibility-based manufacturing”, International Journal of Advanced Manufacturing Technology, Vol. 11 No. 6, pp. 439-48. Bailey, J. E. and Pearson, S. W. 1983), “Development of a tool for measuring and analysing computer user satisfaction”, Management Science, Vol. 29 No. 5, May, pp. 519-29. Burgess, T. F. (1994), “Making the leap to agility: defining and achieving agile manufacturing through business process redesign and business network redesign”, International Journal of Operations and Production Management, Vol. 14 No. 11, pp. 23-34. Cho, H. , Jung, MY. and Kim, M. (1996), “Enabling technologies of agile manufacturing and its related activities in Korea”, Computers and Industrial Engineering, Vol. 30 No. 3, pp. 323-34. Fayol, H. (1949) General and Industrial Management, Pitman, London. Gehani, R. R. 1995), “Time-based management of technology: a taxonomic integration of tactical strategic roles”, International Journal of Operations and Production Management, Vol. 15 No. 2, pp. 19-35. Gillenwater, E. L. , Conlon, S. and Hwang, C. (1995), “Distributed manufacturing support systems ± the integration of distributed group support systems with manufacturing support systems”, Omega ± International Journal of Management Science, Vol. 23 No. 6, pp. 653-65. Goldman, S. L. and Nagel, R. N. (1993), “Management, technology and agility: the emergence of a new era in manufacturing”, International Journal of Technology Management, Vol. 8 Nos 1/2, pp. 18-38. Goldman, S. , Nagel, R. and Preiss, K. 1995), Agile Competitors and Virtual Organisations, Van Nostrand Reinhold, New York, NY. Gulick, L. H. and Urwick, L. F. (1937), Papers on the Science of Administration, Institute of Public Administration, New York, NY. Hammer, M. and Champy (1993), Re-engineering the Corporation, HarperCollins, New York, NY. Kidd, P. T (1994), Agile Manufacturing: Forging New Frontiers, Addison-Wesley, London. Kidd, P. T. (1996), Agile Manufacturing: A Strategy for the 21st Century, IEE Colloquium Digest Nos. 96/071, March, p. 3. Li, E. Y. (1997), “Perceived importance of information system success factors: a meta-analysis of group differences”, Information and Management, Vol. 32 No. 1, pp. 15-28. Medhat, S. S. and Rook, J. L. 1997), “Concurrent engineering ± processes and techniques for the Agile Manufacturing Enterprise”, IIE Conference Publication, No. 435, pp. 9-14. Merat, F. L. , Barendt, N. A. , Quinn, R. D. , Causey, G. C. , Newman, W. S. , Velasco, V. B. Jr, Podgurski, A. , Kim, Y. , Ozsoyoglu, G. and Jo, J. Y. (1997), “Advances in agile manufacturing”, Proceedings ± IEEE International Conference on Robotics and Automation, Vol. 2, pp. 121622, IEEE, Piscataway, NJ. Mintzberg, H. (1997), “Rounding out the managers job”, IEEE Engineering Management Review, pp. 119-33. Porter, M. E. (1996), “What is strategy? ”, Harvard Business Review, November-December, pp. 61-78. Sauer, C. and Lau, C. 1997), “Trying to adopt systems development methodologies ± a casebased exploration of business users’ interests”, Information Systems, pp. 255-75. Smith, K. K. (1984), “Rabbits, lynxes and organisational transitions”, in Kimberly, J. R. and Quinn, R. E. (Eds), New Futures: The Challenge of Managing Corporate Transitions, Dow-Jones Irwin, Homewood, IL, pp. 269-94. SPI (Society of Practitioners of Insolvency) (1998), Insolvency, The Director, London, June, pp. 82-84. Veryard, R. (1994), Information Co-ordination: The Management of Information Models, Systems and Organisations, Prentice-Hall International (UK) Ltd, Hemel Hempstead, p. 22. [ 126 ]

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Reflection Essay on Information Systems

MANAGEMENT INFORMATION SYSTEMS SUMMARY ( LECTURE NOTES 1 – Information Systems in Global Business Today)1. Explain why Information Systems are so essential in business today. OInformation Systems are fundamental for conducting Business today. OIn many industries, survival and even existence is difficult without extensive use of Information Systems. OInformation Systems have become essential for helping organizations operate in a global economy.

OOrganization are trying to become more competitive and efficient by transforming themselves into ‘Digital Firms’ where nearly all core business processes and relationship with customers, suppliers, and employees are digitally enabled. OBusiness today use Information Systems to achieve six major objectives: 1. Operational excellence 4. Improved Decision making 2. New product, Services & Business models 5. Competitive advantage 3. Customer / Supplier intimacy 6. Day-to-day survival Loading… MANAGEMENT INFORMATION SYSTEMS 2.

Define an Information System from both Technical and Business perspective From a Technical perspective: OAn Information System collects, stores, and disseminates Information from an organization’s environment and internal operations to support organizational functions and decision making, communication, coordination, control, Analysis and visualization. OInformation Systems transform raw data into useful Information through three basic activities: Input, Processing and Output From a Business perspective OAn Information System provides a solution to a problem or challenge facing a firm and provides real economic value to the business.

MANAGEMENT INFORMATION SYSTEMS 3. Identify and describe the three dimensions of Information Systems An Information System represents a combination of Management, Organization, and Technology elements. OThe Management Dimension involves: §Leadership, §Strategy, §Management behaviour. OThe Organization Dimension involves: §Organization’s hierarchy, §Functional specialities, §Business Processes, §Culture, §Political interest groups OThe Technology Dimension consists of: §Computer Hardware, §Software, §Data Management technology, § Network / Telecommunications technology (including the Internet. Loading… MANAGEMENT INFORMATION SYSTEMS 4. Asses the Complementary Assets required for I. T to provide value to a Business OAn Information System is part of a series of ‘Value-adding activities’ for acquiring, transforming and distributing Information to improve Management decision making, enhance Organizational performance, and ultimately Increase firm profitability OIT cannot provide this Value unless it is accompanied by supportive changes in Organization and Management called Complementary Assets These Complementary Assets include: §New Business Models New Business Processes §Supportive Organizational Culture §Incentives for Management Support and innovations §Training §Social Assets (Such as Standards, Laws and Regulations), §Telecommunications infrastructure. §Firms that make appropriate investments in these complementary Assets, also called Organizational and Management Capital, receive superior returns on their IT Investment. MANAGEMENT INFORMATION SYSTEMS 5. Identify and describe contemporary approaches to the Study of Information Systems and distinguish between Computer Literacy and Information Systems Literacy.

OThe study of Information Systems deals with issues and insights contributed from Technical and Behavioural disciplines. OThe Discipline that contributes to Technical approach are: §Computer Science §Management Science §Operational Research OThe Discipline that contributes to Behavioural Approach are: §Psychology §Sociology §Economics §Information Systems Literacy requires an understanding of the Organizational and Management dimensions of Information Systems, as well as Technical dimensions addressed by Computer Literacy. §Information System Literacy draws on both Technical and Behavioural approaches to studying Information Systems. The field of MIS promotes Information Systems Literacy by combining all of these disciplines with practical orientation towards developing System solutions to real world problems and managing IT resources. MANAGEMENT INFORMATION SYSTEMS SUMMARY ( LECTURE NOTES 2 – How Business Use Information Systems? ) 1. Define and describe Business Processes and their relationship to Information Systems. OA Business Process is a logically related set of activities that define how specific Business tasks are performed, and a Business can be viewed as a collection of Business Processes.

OBusiness Processes are concrete flows of Material, Information and KnowledgeOBusiness Processes represent unique ways in which organizations coordinate Work, Information, and Knowledge, and the ways to which Management chooses to coordinate work. §Managers need to pay attention to Business Processes because they determine how well the organization can execute its business, and thus be a potential source of strategic success or failure. OEach major Business functions has its own set of Business processes (such Processes for Production function) however there are many business processes which are cross-functional such as order fulfilment.

OInformation Systems can help organizations achieve great efficiencies by automating parts of these processes or by helping Organizations redesign and streamlining them. OFirms can become more flexible and efficient by coordinating their Business Processes closely, and in some cases, integrating thesePprocesses so they are focused on efficient management of resources and customer service. MANAGEMENT INFORMATION SYSTEMS SUMMARY 2. Describe the Information Systems supporting the major business functions At each level of Organization, Information Systems support the major Functional areas of the Business

OSales and Marketing Systems §Help the firm identify Customers for firm’s Products or Services, §Develop Products and Services to meet Customer’s needs §Promote the Products and Services §Sell the Product and Services §Provide ongoing Customer support OManufacturing and Production Systems §Deals with Production Planning §Development §Production of Products and Services §Control the flow of Production MANAGEMENT INFORMATION SYSTEMS SUMMARY OFinance and Accounting Systems §Keeps firm’s Financial assets and fund flows OHuman Resources Systems §Maintain Employee records §Track Employee skills, Job performance, and Training Support planning for Employee compensation and career development MANAGEMENT INFORMATION SYSTEMS SUMMARY 3. Evaluate the Role Played by System Serving the Various Levels of Management in Business and their relationship to each other. OThere are four major types of Information Systems in contemporary organizations serving: OOperational Management OMiddle Management OSenior Management 1. Transaction Processing Systems (TPS) Serve Operational Management . Such as Payroll or Order Processing Systems that track the flow of daily routine transactions necessary to conduct business. 2. Management Information Systems (MIS)

Provide Middle management with reports and access to the organization’s current performance and historical records. Most MIS reports condense information from TPS and are not highly analytical. Loading… MANAGEMENT INFORMATION SYSTEMS SUMMARY 3. Decision Support Systems (DSS) DSS supports Management decisions when these decisions are unique, rapidly changing, and not specified easily in advanced. DSS have more advanced Analytical models and Data analysis capabilities than MIS and often draw on information from external as well as internal sources. . Executive Support Systems (ESS) Support Executive Management by providing data of greatest importance to senior Management Decision makers, often in the form of graphs and charts delivered via portals. ESS have limited Analytical capabilities but can draw on sophisticated graphics Software and many sources of internal and external information. MANAGEMENT INFORMATION SYSTEMS SUMMARY 4. Explain how Enterprise Applications and Intranets promotes Business Process Integration and improve organizational performance Enterprise Applications

These Systems are designed to support organizational wide process coordination and integration so that the organization can operate efficiently; Such Enterprise Systems are: OEnterprise Systems OSupply Chain Management Systems OCustomer Relationship Systems OKnowledge Management Systems Enterprise Systems Span multiple functions and business processes and may be tied to the Business Processes of other organizations Enterprise Systems integrate the key internal Business Processes of a firm into a single Software System so that information can flow throughout the organization, improving Coordination, efficiency, and Decision making.

MANAGEMENT INFORMATION SYSTEMS SUMMARY Supply Chain Management Systems Help the firm manage its relationship with supplier to optimize the Planning, Sourcing, Manufacturing, and Delivering of Products and Services. Customer Relationship Management Uses Information Systems to coordinate all the Business Processes surrounding the firm’s interactions with its Customers to optimize firm’s Revenue and Customer satisfaction Knowledge Management Systems Enable firms to optimize the creation, sharing, and distribution of knowledge to improve Business Processes and Management decisions

Intranets and Extranets both use Internet technology and standards to assemble information from various Systems and present it to the User in a Web page format. Extranets make portions of private corporate Intranets available to outside. MANAGEMENT INFORMATION SYSTEMS SUMMARY 5. Asses the role of Information Systems Function in a Business The Information Systems Department is the formal Organizational unit responsible for IT Services. The IS Department is responsible for maintaining the Computer Hardware, Software, Data Storage, and Network that comprise the firm’s IT Infrastructure.

The Department is consisted of Specialists, such as Software Engineers, Systems Analysts, Programmers, Project Web Designers, Project Managers, Systems Managers and is often headed by a Chief Executive Officer (CIO). Alternative ways of Organizing the IT Function –A very small company will not have a formal IS group. –Larger Companies will have a separate IS Department. •Each Functional Area of the Business may have its own IS Department, overseen by a CIO. •The IT function may be run as a separate Department similar to other Functional department Very Large companies with multiple Divisions and Product Lines have an Information System department for each Division reporting to a high-level Central Information Systems group and CIO. MANAGEMENT INFORMATION SYSTEMS SUMMARY (LECTURE NOTES 3 – Information Systems, Organizations and Strategies) 1. Identify and describe features of organizations that managers need to know about in order to build and use Information Systems successfully. Managers need to understand certain essential features to build and use Information Systems successfully.

All modern Organizations are hierarchical, specialized, and, impartial, using explicit routines to maximize efficiency. All Organizations have their culture and Politics arising from differences in interest groups, and they are affected by their surrounding environment. Organizations differs in goals, groups served, social roles, leadership styles, incentives, types of tasks performed, and type structure. These features help explain differences in organization’s use of Information Systems. MANAGEMENT INFORMATION SYSTEMS SUMMARY 2. Evaluate the impact of Information Systems on Organizations

Information Systems and the Organizations in which they are used interact with and influence each other. The introduction of a new Information System will affect Organizational Structure, goals, Work design, values, Competition between interest groups, Decision making, and day-to-day behaviour. At the same time, Information Systems must be designed to serve the needs of important organizational groups and will be shaped by the organization’s structure, tasks, goals, culture, Politics, and Management. IT can reduce transaction and agency costs, and such changes have been accentuated in Organizations sing the Internet.

Information Systems are closely intertwined with an organization’s structure, Culture, and Business Processes. New Systems disrupts established patterns of work and power relationships. So there is often considerable resistance to them when they are introduced. The complex relationship between Information Systems, Organizational performance, and Decision making must be carefully managed. MANAGEMENT INFORMATION SYSTEMS SUMMARY 3. Demonstrate how Porter’s Competitive Forces Model and the Value Chain Model help Businesses use Information Systems for Competitive Advantage.

The Strategic position of the firm, and its strategies, are determined by competition with its traditional direct competitors but also they are greatly affected by: –New market entrants, –Substitute products and services, –Suppliers, –Customers. Information Systems help companies compete by maintaining low cost, differentiating products or services, focusing on market niche, strengthening ties with Customer and Suppliers, and increasing barriers to market entry with high levels of Operational excellence.

The Value Chain Model highlights specific activities in the business where Competitive strategies and Information Systems will have the greatest impact. MANAGEMENT INFORMATION SYSTEMS SUMMARY The Porter’s Competitive Forces Model views the firm as a series of primary and support activities that add value to a firm’s products or services. Primary activities are directly related to production and distribution, whereas support activities make the delivery of primary activities possible.

A Firm’s Value Chain can be linked to that value chains of its Suppliers, Distributors, and Customers. A Value Web consist of Information Systems that enhance competitiveness at the Industry level by promoting the use of standards and industry-wide consortia, and by enabling businesses to work more efficiently with their value partners. MANAGEMENT INFORMATION SYSTEMS SUMMARY 4. Demonstrate how Information Systems help Business use Synergies, Core Competences, and Network-based Strategies to achieve Competitive Advantages.

Because firms consists multiple business units, Information Systems achieve additional efficiencies or enhanced services by trying together the operations of disparate business units. Information Systems help businesses leverage their core competences by promoting the sharing of knowledge across business units. Information Systems facilitate Business Models based on large Networks of Networks to link to other firms so that a company can use the capabilities of other companies to together to deliver value to the customer.

Information Systems support a dense Network of interactioms among the participating firms. MANAGEMENT INFORMATION SYSTEMS SUMMARY 5. Asses the challenges posed by Strategic Information Systems and Management solutions. Implementing Strategic Systems often requires extensive organizational change and a transition from one Sociotechnical level to another. •Such changes are called Strategic Transitions and are often difficult and painful to achieve. Moreover, not all Strategic Systems are profitable, and they can be expensive to build.

Many Strategic Information Systems are easily copied by other firms so that strategic advantage is not always sustainable. A strategic Systems Analysis is helpful. MANAGEMENT INFORMATION SYSTEMS SUMMARY (LECTURE NOTES 4 – Foundations of Business Intelligence) 1. Evaluate Tools and Technologies for providing Information from Databases to improve Business Performance and Decision making. Powerful tools are available to analyze and access the Information in Databases. A Data warehouse consolidates current and historical data from many different Operational Systems in a central Database designed for reporting and Analysis.

Data Warehouse support multidimensional data analysis, also known as Online Analytical Processing (OLAP). OLAP represents relationships among data as a multidimensional structure, which can be visualized as cubes of data and cubes within cubes of data, enabling more sophisticated Data Analysis. Data Mining analyzes large pools of data, including the contents of Data Warehouses, to find patterns and rules that can be used to predict future behaviour and Decision making.

Conventional Databases can be linked via Middleware to the Web or a Web interface to facilitate user access to an organization’s internal data, . MANAGEMENT INFORMATION SYSTEMS SUMMARY 2. Asses the role of Information Policy, Data Administration, and Data quality assurance in the Management of Organizational Data resources. Developing a Database environment requires Policies and Procedures for managing Organizational data as well as a good Data Model and Database Technology. A formal Information Policy govern the Maintenance, Distribution, and use of Information in the organization.

In a large corporations, a formal Data Administration function is responsible for Information Policy, as well as for data Planning, Data Dictionary development, and monitoring data usage in the firm. Data that are inaccurate, incomplete, or inconsistent create serious Operational and Financial problems for business because they may create inaccuracies in Product pricing, Customer accounts, and Inventory data, and leads to inaccurate decisions about the actions that should be taken by the firm.

Firms must take special steps to make sure they have a high level of Data quality. These include using Enterprise-wide Data Standards, Databases designed to minimize inconsistent and redundant data, Data Quality Audits, and Data Cleansing Software. MANAGEMENT INFORMATION SYSTEMS SUMMARY (LECTURE NOTES 5 – IT Infrastructure and Emerging Technologies)

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