Managing Information for Competitive Advantage - Coursework Example

School: Topic: Presentation: Introduction Information Systems refer to the field that is focused on strategic, decision-making, and operational activities whereby an organization gathers, processes, stores, disseminates and uses information together with the relevant technologies to enhance efficiency and competitiveness. Development of information systems is significant for the management and the employees in carrying out the day to day activities concerned with information processing. The information systems facilitate the development of reports and decision making. The importance of information systems in management is growing. A greater volume and complexity of data requires managing as companies strive to gain competitive advantage. This paper presents a critique of information systems with some recommendations for each. It describes the purpose and characteristics of ERP and the index cards, which are some computerized and manual information systems respectively. The paper evaluates the success of these systems as well as benchmarking them against those used for similar purposes in other organizations. Implementation guidance has been provided for the systems. Enterprise Resource Planning Enterprise resource planning (ERP) is one of the significant information systems that are applied by organizations to enhance their capacity to handle data concerning the organization’s in-house and external resources, which include material assets, economic resources and the workforce (Jones and Price, 2004). It is a software design that is intended to enhance information flow between the business processes within the organization’s jurisdiction as well as to facilitate the management of inter-organizational collaboration. It helps the organization to manage its connections with other stake-holders. The system uses a shared computing platform developed on a centralized database. ERP systems combine the organization’s entire operations into a homogeneous system that integrates the whole business environment (Silver et al. 1995). The system can be located on a central server or be dispersed traversing modular software and hardware components, which act as the “service providers” as well as communication channels on the LAN. The dispersed design is significant in allowing the organization to pull together modules from different providers devoid of placement of numerous copies of multifaceted and costly computerized systems in situations where their full capacity may not be accomplished (Parr and Shanks, 2000). ERP software is applied by organizations as a comprehensive company software solution that is focused on incorporating all the organizational processes and associate processes in to a distinct integrated system (Nebraska and Fox, 2003). The system is important for an organization to effectively accomplish its strategic goals. The system packages are put into operation to manage the prevailing and forthcoming business plans and strategies in an effective way while meeting the organization’s deadlines (Alfred, 2008). Effective utilization of the ERP packages give competitive advantage to a business especially due to the fact that the system is aimed at maximizing effectiveness in the utilization of the available resources and also to ensure that they are used in line with the organization’s strategic objectives (Silver et al. 1995). Contemporary organizations have been successful in the application of ERP systems especially due to the fact that they need a distinct unified system that can enhance harmonization of business operations (Zairi, 2003). Companies are using the ERP systems, which act as a significant determinant of the decision making process as regards the extent, jurisdiction as well as the overall results of the entire organization. They are saved from running numerous and diverse systems that may not work well simultaneously. In essence, the uniqueness of the ERP systems is the unification of the database system in one package thereby making it preferable to other information systems in management (Sarker and Sarker, 2000). Modern companies have found it difficult to conduct their operations competitively without appropriately planned and prepared ERP software. The efficient the organization is in the ERP execution and follow-up, the better the outcome (Alfred, 2008). The systems are needed by contemporary organizations regardless of their size, jurisdiction in terms of operations or strategic objectives. SAP and Oracle are among the ERP systems that contemporary organizations are using to improve their competitiveness. According to Fedorowicz et al. (2004), the ERP module helps organizations to keep track of the activities involving contracts, thereby maintaining effectiveness in buying and selling. Moreover, they are used by organizations to effectively calculate the expenditures incurred in the procurement processes. The control panels for products are provided, which enables the organization to maintain control in regard to the quantities being developed in the organization and those that it is issuing. In general, ERP systems enhance logistics in organizations (Davenport, 1998). There are similar systems that are applied by other organizations that are not in the manufacturing field where ERP systems are mainly applied. Such organizations such as banks, insurance companies, hospitals and most of the organizations in the service industry apply customized systems that match their needs. Others apply commercial software that is useful for particular functions in the organization aligned at best with the cross-industry modules such as book keeping and human resources (Borman, 2006). The accounting module is significant in maintaining reliable records regarding the organizational accounts. This module is informative in the sense that it provides the management with essential information concerning the manner in which the company finances are being obtained as well as how they are utilized. In general it provides quick references regarding the organizational cash flows, which is significant for the management in decision making, such as the development of budgets (Geri and Ahituv, 2008). Development of all financial statements is possible through the application of this module. The human resources module is significant in the management of information regarding the employees. It helps in placing information regarding the career plans and the organizational structure in terms of organizational management. Information regarding the organizational employees as well as their duties and responsibilities is easily accessible through the module (Galliers et al. 2006). Manual Information Systems Manual systems were mainly used by organizations before the development of computerized information systems. Data are usually captured and stored in other ways that do not require computers such as paper. Handwritten information was mainly stored in files and diaries where it could be retrieved whenever need arose. The typewriter was the most significant equipment that facilitated data capture (Gordon, 2002). Even today, Wang et al. (2004) observe that many organizations are applying manual information systems to capture data especially for activities such as tracking sales. Even though it is more complicated than the computer based information systems, index cards, which are the mostly used manual systems are used together with charts and file folders. The information is contained in the index cards that act as the guide in the information processing. The calendar on the other hand is used for storing dates and contacts that need to be called in future. The file folders are used for storage of the documents, applying the alphabetical order to enhance retrieval (Timothy and Linda, 2008). A common filing system is used to store the index cards. For effective application of the manual information systems, organizations use different colors that represent the age of index cards. For example, new index cards acting as leads are usually placed in green boxes while the current leading cards are placed in the yellow boxes. The red box usually contains the leading cards that are used at the end of the year. These are the ones that are regarded as red leads. The management moves the leading cards from one category to another depending on the dynamics of the associated business processes. The leading cards that show promising prospects are put in separate boxes. Ledger entries are usually made for the prospects, which also indicate the period which the ledgers are expected to last. They indicate the period that the organization is likely to close vending as well as the possibility of the vending really taking place. The organization uses this information in decision making using the ideas developed from the analysis of the prospects as well as the accomplishment of the organizational goals in future. The sales people are expected to keep close contacts with the clients and therefore are the ones that make use of the manual information systems. Arussy (2005) observes that the systems facilitate tracking a variety of information, which is accomplished through the manual system. Other organizations use the Customer Relationship Management (CRM) system, which is a modern alternative to the manual information systems that are applied in the management of sales. CRM strategy is significant for organizations that need to maintain close contacts with clients. Organizations are able to maintain regular and useful interactions with its customers through the application of information technology. Business processes are automated and harmonized to establish a strong customer base, to attract new customers, and to maintain the existing customers through integrating their demands in the production process. Organizations increase profitability through understanding their clients and adopting new technologies that enhance efficiency (Galliers et al. 2006). Recommendations for Improvements The productivity of employees is a significant determinant of the effectiveness in the use of ERP systems. Rather than increasing the workforce by employing workers with knowledge on ERP usage, the organizations should empower its employees to apply the new systems. They need to be provided with the right information on a timely manner. This helps in minimizing errors as well as improving the productivity of employees. Managers need to understand the best practices that minimize inefficient use of human resources especially in some avoidable activities such as tedious cataloging of data and manual work that lowers the speed of the process, which in turn may lead to dissatisfaction among the clients. Employee satisfaction translates to contentment of clients. The employees in charge of the ERP systems need to be given the necessary support and data to ensure that they are able to deal with them effectively thereby improving consumer satisfaction (Davenport, 1998). Managers should try as much as possible to reduce complexity of ERP systems to ensure that accomplishment of the organization’s strategic goals is not prolonged. The systems should also not bring in unnecessary expenditures to the organization. The ERP projects need to be customized to fit in the organizational operations and not the vise versa. For example, the Hershey Foods ERP project failed after 21/2 years of implementation, costing the company 112 million dollars due to the complexity of the system. It required the organizational operations to be changed for the project to work. Organizations should be capable to cope with the risks that occur in the implementation of process (Bernroider and Koch, 2001). Beaver (2002) recommends that the management understands that the index cards are manual systems that depend on handwriting. This makes legibility of handwritten information an aspect that is of paramount importance. Without proper organization of the filing system and hand writing, the information can not be retrieved as desired. It is therefore necessary for the organizations applying the manual systems to have in place measures to ensure that data is captured in the index cards as soon as possible to prevent loss and inappropriate entries (Few, 2006). The costs can be reduced through minimizing the range of data that is input in one index card, as well as the information that is required for the analysis of the business prospects. Documents should also be protected from damage to protect useful information especially for the manual systems that may not have backup information (Davenport, 1998). Conclusion ERP is among the computerized organizational information systems that enhance organizational competitiveness. The systems are applied to enhance maximum utilization of organizational resources. It allows integration of organizational processes in to a distinct system. Manufacturing organizations are the ones that mainly apply the ERP system. The dispersed design of ERP makes it unique and also gives it features that give a competitive advantage to the organization. The design also helps in minimizing the costs that could otherwise be incurred if several complex computer systems could be applied. The system facilitates the accomplishment of an organization’s strategic objectives especially due to the fact that it allows the harmonization of business processes, which eliminates the tedious and time wasting processes. Organizations are able to save on costs through the system due to its capacity to provide essential information on finances. Manual systems are also used by organizations that have not adopted the computerized systems in their business operations. Index cards, calendars and filing systems are among the manual systems applied for information capture and storage. Care needs to be taken to avoid errors that can be made in the manual data entry. The manual systems are more complicated than the computerized systems, meaning that they can be costly and time consuming. However, they can also improve an organization’s competitive advantage. Appendix Figure 1.0: ERP system diagram Source: Real Software Company, 2010* References Alfred P. (2008). 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The levels of information technology adoption, business network, and a strategic position model for evaluating supply chain integration. Journal of Electronic Commerce Research, Vol. 5 (2), pp 85-98 Read More