The business environment has undergone rapid changes over the past few decades in terms of technology and work culture. The changes in the operating environment have resulted in increasing dynamism among entrepreneurs and organizations to devise and implement strategies for growth and development.
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Access to information systems and data is far easier today than it was a few decades back. This report provides an analysis of the current trends and work practices within My Briefcase Ltd (MBL) highlighting its limitations and need for an information system within the organization. The report also provides the benefits of implementing an information system and the scope of improvement that the proposed system would extend to the business. MBL System Overview
MBL is a manufacturing organization that manufactures a wide variety of business briefcases. The company had started 10 years ago with only 5 employees, and has expanded into a global organization that employs more than 150 employees as a result of its high quality products, innovative approach and excellent customer service. The company management has decided to introduce Information Systems in various departments to increase operational efficiency and assist in managerial decision making process.
An evaluation of the existing operational trends and processes revealed that not only were these processes time consuming but also proved to be relatively inefficient when compared to the increased accessibility of data and data flow that an Information System can facilitate. A complete system analysis was done to study the operational requirements, identify existing work flow pattern, and intra-departmental exchange of information. Currently the company has various departments with specialized roles to monitor and supervise distinctive work processes.
The figure below provides a graphical representation of the various departments within the organization. An in-depth analysis of the company highlighted the present work flow pattern and existing operational requirements. The work flow pattern of the company is provided as below: Businesses are often viewed as composition of various functions. Each function requires information to plan, operate, and monitor results. Hence the key aspect of business function is information and its accurate and timely availability to the different departments within the organization.
The organization can ensure this through the development of an effective information system. It is to be noted that while “the business strategy has been perceived as the driver, the Information Technology strategy has guided the identification of resources and been the enabler. As information systems have become embedded into the operation of companies it has become clear that an IT strategy is a fundamental and integrated component of overall business strategy. ” (Curtis and Cobham, 2002, Business Information Systems, Pg 66)
The information system design has been based on general systems thinking that makes use of concepts of input, throughput, output and feedback loop that operate within the external environment factors that impact the business. Systems thinking has been defined as “being a more holistic and yet…elegantly simplistic way of thinking that precedes our actions. It is based on a complete view of the complex relationships within the entity we are discussing, along with its purposes and roles within its larger external environment” (Haines, 2007).
The management of the company felt that a well worked out information systems strategy would provide them with greater control over the organizational functions and business development process. The information system will be designed to provide the management with a comprehensive view of current status and operational issues faced by various departments. The system will provide the management with summary reports and vital data and statistics that will enhance decision making abilities. Systems Requirements
Based on the existing work flow pattern and operational requirements the company needs to invest in new computer systems for each department. The hardware requirements for the new information system are identified as follows: • One central server • Local area network setup that includes routers and switches to connect various departments • One terminal for each department • High speed broadband Internet connection at head office and warehouses • One Internet connected terminal at each locations • One printer for each department • Power backup system
• CAD/CAM system for the engineering and design department The Stock Control System The new information system will provide the various departments with automated functions and extended information flow that will enable access to updated database and stock inventory status. The diagram below provides a data flow diagram between various departments and functions supported by the new information system: The stock control system will be the focal point of the new system aligning the various activities of the purchase department with the production and sales departments.
The manufacturing department passes the inventory requisition by filling the material requisition form to the purchase department in accordance with the production planning requirements. The production planning is done by the manufacturing department in consultation with the marketing department that collects product requirement information from wholesalers and retailers at different locations. The purchase department then places the order to the listed suppliers based on the material requisition form.
A copy of the goods requisition note (GRN) is passed to the Accounts department that settles the payment to suppliers within 15 days of delivery. The purchase and warehousing department issues a goods issue note (GIN) to the manufacturing department that contains details of the raw materials issued for production process. Based on the GRN and GIN the stock is updated in the system. Thus the system provides the current status of stocks held by the purchase and warehousing department.
The fabricated finished goods are delivered to the logistics and dispatch department responsible for final dispatch to the wholesalers and retailers. The logistics and dispatch department maintains the stock of finished goods received, dispatch locations, quantity of goods dispatched, value of goods dispatched, and date of dispatch. These details provided by the system are accessible to the sales and accounts department that enables them to update their records and raise invoices and collect payment.
The engineering and design department along with the human resource department will provide support functions to the primary operational processes. The CAD/CAM system implemented in the engineering and design department provides the manufacturing department with the design specifications and details on the manufacturing process. The human resource department will gather information on the manpower requirements across various levels and departments, carrying out training and development workshops for existing employees to increase performance efficiency and productivity. IS development process
The proposed information system will integrate the functions of all departments that include manufacturing, engineering and design, purchasing and warehousing, finance, marketing, sales and logistics. The data flow from these departments will be directed to the Management Information System that will be used by the top management for decision making process. The system will incorporate new developments keeping in mind the future needs of expanding markets and customer needs. The new system will be accessible online to facilitate improved interaction between wholesalers, retailers, suppliers and company executives across various locations.
The management proposes to build a solution that provides the executives with maximized control over the data flow. This is possible only when the data or information flow is centralized, readily available and accessible for decision making process at each stage. Professionally managed operations should integrate and regulate information flow across departments. The above requirements can be effectively met through customized application development that is designed and developed using server-client technology. This will make sure that the same application runs on the Internet as well as the Intranet through the browser.
IS Methodology The proposed IS system will provide the company with greater reliability and connectivity, increased scalability and ease of use. The centralized ownership of data will ensure data security and avoid redundancy. The system will provide a secured interface where only authorized users can access various levels of information and data. This will ensure that only valid users can access the system. Each user group will have three levels of access to the system and will have access to information based on the privileges assigned to each user by the system administrator.
Networking Options The integration of computers and communication has made a significant impact on the way computer systems are organized today. The concept of a large number of computers at various locations interconnected through different networking devices has enhanced work performance and access to information from a centralized database. There are numerous alternatives available in the market that enable exchange of information and access to data located in separate machines. Businesses have adopted innovative technologies to derive increased commercial benefit and drive business growth.
The networking options available today range from copper wires, fiber optics, and microwaves, infrared to communication satellites. The networking of computers allows businesses not only to share printers, scanners and CD burners but also share information. “Even a small travel agency or three person law firm is now highly dependent on computer networks for allowing employees to access relevant information and documents instantly” (Tanebaum, 2007). A computer network enables users to share resources, communicate, access online information, enable online transactions and facilitate e-commerce applications.
The type of computer networking chosen for an organization is dependent on the nature and extent of information flow within departments and levels. A company’s information system generally consists of one or more databases and employees at different levels who need access to the data from different locations. The database is stored in powerful computers called servers that are accessed by employees from individual machines called clients (Tanebaum, 2007). These client server machines are connected using a network. There are different kinds of network topologies used to determine how data flows from one point to another.
Depending on the nature of data flows network topologies are categorized as bus topology, ring topology, star topology, and wireless networking that is an upcoming trend used by most businesses today. The IS designed for MBL is customized client server application that enables users to access information and data through the Internet. For the purpose of effective communication and enable future business growth and development through global expansion and e-commerce, the wireless networking is considered most suitable.
“Anyone with a notebook computer and a wireless modem can just turn the computer on and be connected to the Internet, as though the computer were plugged into a wired network” (Tanebaum, 2007). This kind of networking is not only cost effective and convenient but also easy to maintain. Use of barcode readers Innovative use of technology in business applications has created a huge demand for hand-held or wireless devices that increases efficiency in operations and provides a competitive edge to businesses.
One such device is the barcode reader that is used by manufacturers and retailers to track inventory cycle counts, point of sale checkout, purchasing, sales analysis, and warehousing. “Combined with data collection technology, bar codes provide a rapid, accurate, and efficient means to collect, process, transmit, record and manage data in a variety of industries” (KCS, 2008). Using barcodes in each item in the inventory helps to keep track of material stock and movement across the floor. A portable reader is used to read the inventory stock and transfer this data to the central computer system at regular intervals.
This enables the managers to obtain accurate, real-time inventory updates that allow the organization to stock less inventory thus reducing working capital requirements. The information system designed for MBL can make use of the barcode readers to increase operational efficiency and derive the benefits of managing inventory levels. This will ensure fast and reliable data collection, increased accuracy, reduced labor costs to maintain inventory stocks, and improved managerial decision making process. E-commerce application
Electronic commerce has become increasingly popular and widely used across the world. Conventional stores have given way to online stores and malls catering to all kinds of products and services available at the fingertip of the potential consumers. The e-commerce has provided a novel way of shopping heightening the shopping experience with the use of new technologies and upgraded business models. Large numbers of businesses are going online with the use of e-commerce web applications that enable them to connect directly to their consumers and establish a medium of exchange at the click of a mouse.
Consumers can now bank online, purchase travel tickets, make hotel bookings and reservations, process financial transactions, besides purchasing consumables ranging from clothes, books, CDs, electronic products among a list of others. E-commerce has opened new vistas of marketing management and strategic planning that enable extensive consumer reach and unlimited potential for entrepreneurs. Being an evolving avenue the e-commerce remains vastly unexplored in terms of business potential and revenue generating strategies. E-commerce has impacted all aspects of business processing with the use of appropriate technology and trends.
Commercial aspects of business such as total quality management, business process re-engineering, and global outsourcing have re-defined the way business is conducted today. It has led to increased automation of work processes, integrated systems, and technologies for the purpose of efficient customer service with the aid of improved connectivity and accessibility. E-stores can be very effective in sales of certain type of consumer products or services like travel bookings and reservations, books and CDs ordered online, daily consumable items and gift articles.
In such types of products or services the consumer can order from the convenience of his home or office and get the product delivered at the desired location. This can ease their workload from the hectic schedule and offer a wide variety of choices at various prices right at their fingertips. The consumers can obtain a broader spectrum of information and data on their computer screens making it easier for them to compare alternatives with greater ease. Tools like blogs and chat communities assist in acquiring product feedback that helps greatly in making purchase decision.
An e-business model is an approach taken by a company to earn revenues and maximize profits. Essentially an e-business model refers to a revenue-earning medium focused around the key elements of any business venture – market, customers, suppliers and resources. Various attempts have been made to make specific distinctions of the e-business models that exist across the globe but this has resulted in new theories and propositions. But simply understood an e-business model implies to an approach taken by a company to become a profitable venture on the electronic media commonly referred to as the electronic commerce.
It spells out how a firm generates revenue by specifying the position of the firm in the value chain. The Internet commerce has given rise to new kinds of business models (Michael Rappa, 2008). These models centre on the basic business concept where a firm produces goods or services and sells it to the consumers. The strategic alternatives chosen by the firms to earn revenue differ and this is largely dependent on the nature of goods or services being sold by the firm. MBL proposes to adopt e-commerce business model to explore new markets and business growth opportunities presented by this media.
The overall e-business development requires proper planning and efficient management of resources integrated with real time actual data. The managers need to assess the market opportunity and dynamics along with industrial competitive forces, product-positioning requirements, brand differentiation strategies and risk mitigation strategies. Once the opportunity assessment is complete the next step involves assessing the resource required to execute the strategy and the overall capacity to invest and execute the business objectives. This is followed by a cost benefit analysis and the returns assessment.
Once the feasibility study is over the business needs to develop real time performance monitoring system. (Applegate, 2002) Most of the e-commerce applications fail due to the insufficient privacy and the inability of the businesses to provide a sense of security to the consumers while making payments or transacting online. Customers are most wary of security issues online and the rising number of frauds and misuse of personal information divulged online have made the individuals skeptic about e-commerce platform. There are many new technologies that can now be used to provide greater security to the online transactions.
The use of Secure Socket Layer (SSL) is one such mechanism that encrypts or translates the order information into a highly indecipherable code that cannot be hacked by anyone. Further use of effective codes can lead the consumer to a secured zone that cannot be accessed from any remote server. Conclusion The information system adopted will make sure the following features are incorporated: • A centralized system that will integrate the operations of all the departments fulfilling their information and data processing requirements. • An information base for the customers where they can access company service details and the product details.
• An online system that will facilitate online ordering of goods. • An online billing system that will send invoices to the customers online and a copy of the same delivered via courier. • An effective system that will assimilate all information from various points like online orders, billing, queries and transactions and update the respective department records. The scope of the system will take into account the needs of future market expansion and increased transactions. References: 1. Tanebaum, Andrew S. 2002. Computer Networks. 4th edition. Prentice Hall. 2. KCS. 2008.
Barcoding and Inventory Control. Accessed on April 28th 2009 from http://www. kcsi. ca/barcoding_adv. html 3. Graham Curtis and David Cobham (2002) “Business Information Systems – Analysis, Design and Practice” fourth edition, Prentice Hall UK 4. Stuart MacDonald (2002) “ Information for Innovation – Managing change from an information perspective” OUP 5. Lynda M. Applegate (2002, July) How to fashion your new e-business model - Accessed on April 28th 2009 from - http://hbswk. hbs. edu/item/3007. html 6. Morse, Kenneth P. 2000. E-business models. Computerworld article by Richard Trombly.
Accessed on April 28th 2009 from http://www. computerworld. com/industrytopics/retail/story/0,10801,54589,00. html 7. Michael Rappa (2008, March) Business models on the Web - Accessed on April 28th 2009 from - http://digitalenterprise. org/models/models. html 8. Czech Business Weekly – “E-tailers are click happy” - Accessed on April 28th 2009 from - http://www. cbw. cz/en/e-tail-investors-are-click-happy/7992. html 9. United Nations Conference on Trade and Development – E-commerce and Development Report 2002 - Accessed on April 28th 2009 from – http://www. unctad,org/ecommerce
10. Haines. 2007. The Systems Thinking Approach. Accessed on April 28th 2009 from http://www. hainescentre. com/systems-thinking/abcs. htmlc 11. Sarkar, Sujan. 2007. Information Systems, Organization, Management and Strategy. Accessed on April 28th 2009 from http://www. santarosa. edu/~ssarkar/cs66sp07/ch3sumframe. htm 12. Glasgow. 2008. Information, Computer Systems and Manufacturing. Accessed on April 28th 2009 from http://www. gordon-glasgow. org/comp_mfg. html 13. Haines, Stephen G. 2007. Strategic and Systems Thinking: The winning formula
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