Management Functions Of It Industry

Published Date: 02 Nov 2017

Q. Select any organization with which you are somewhat familiar and explain its Management Functions.

Management is referred to as the process by which organizational goals are achieved. It is the process of designing and developing an environment in which employees work together and accomplish certain goals. All kinds of organization regardless of its size and end-product need some kind of a management strategy to be followed.

Management Functions:

The management function is the set of activities to be followed in an organization for its effective performance in meeting the goals that keeps them profitable and competitive in the market. The basic management functions are discussed below.

Planning:

The process of planning involves defining the goals of the organization and the ways to reach them; decision on the tasks to be accomplished, the resources to be used to attain the goals.

The process of planning helps the organization to increase its profit, to expand its market share and to make decisions on the resources to be used and the ways in which it has to be used to attain the goals in the stipulated time. When there is no proper planning it will affect the organization’s overall performance.

Organizing:

Once the managers have proposed the plan, it has to be implemented. It is important to establish proper relationship within the organization for its effective implementation. The process of organizing involves grouping of activities, designing structures ie, departments based on the grouping; assigning roles and responsibilities within the department and identifying the person in-charge for the departments. When any of these is not properly done, it becomes difficult to attain the goals and complete the proposed plans.

Leading:

The process of leading involves motivating, directing, supervising the employees. This is a most important function of the manager as it brings in lot of changes in the employees and in the way they perform their work. The manager has to guide and influence the employees in the best possible way to make them work in an efficient and effective manner.

Controlling:

This means analyzing the activities performed by the subordinates (measuring the performance) and correcting them (deviations) if required, to ensure that they are progressing towards the goal or the task assigned. This process helps to confirm the performance against the goals and the plans and makes sure all the activities confines to the standards of the organization.

Staffing:

This process involves manning ie, the allocation of human resources to attain the goals proposed in the plan. The manpower requirements have to be determined and candidates satisfying those requirements have to be selected (through recruitment, performance appraisal, promotions & transfers) and given proper training so that they can perform their tasks in an efficient manner.

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Management Functions

Management Functions of IT Industry

Management functions are the activities and the responsibilities of the managers. The management functions of IT industry, the set of activities to be performed by the manager of a software project are discussed below.

Planning:

The process of planning involves defining the scope of the project, determining the timelines within which it has to be performed, estimating the cost for its implementation and setting the quality standards.

Define scope:

The scope of the project has to be determined in this phase which involves determining what has to be accomplished by the project. The project manager has to document the scope in the Project Charter which has to be agreed and signed by all the stakeholders of the project.

Create a schedule:

The first step in this phase is to define the tasks and the subtasks. This process is called WBS (Work Breakdown Structure). It has to be made sure that the lowest level of activities to be performed by the resources is determined.

The next step is to sequence the tasks and identify their dependencies. By the end of this step a Network diagram is created.

Upon sequencing, the task has to be estimated to identify the duration in which it can be performed and the resources that are required for its completion has to be identified. A common method of estimation used is PERT - Program Evaluation and Review Technique (Three point estimates). Here, three estimates – optimistic, pessimistic and most likely, has to be considered which when substituted in the below formula gives the final estimate.

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From the estimate of the individual task, the Critical Path (the schedule for the entire project) is determined.

Cost:

Using the PERT Estimate the costs for each task is determined in this phase. The project Budget is then determined as the sum of the individual costs.

Quality:

The quality metrics are defined in this phase and the Cost of Quality (CoQ) is determined. From the CoQ, Cost Benefit Analysis has to be performed. CBA is a process for calculating and comparing the costs and the benefits of the project.

Organizing:

In this management function the roles are defined and their responsibilities are identified. In IT Industries, the resources who will work for the project are identified; their tasks (as to who will develop which module, who will prepare test cases, who will perform testing) are delegated. A hierarchy (chain of command) is defined.

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Chain of Command

The tasks or the modules are assigned to the developers. There are senior and junior developers which are based on their experience level and expertise. Developers and test engineers report to Team Lead (TL), who in turn reports to Project Lead (PL). A PL reports to the Project Manager (PM) who is held responsible for the project by the top management and by the clients.

Control:

The process of control deals with the supervision of the development process and tracking the deviations between the execution and the plan

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The Cost variance and the schedule variance are calculated in this management function. Cost variance is the difference between the planned cost and the actual cost. When there is variance is under the planned cost, it is termed as Positive cost variance and when it is over the budget it is called Negative cost variance.

Schedule variance is the difference between the planned time and the actual time, which helps to understand whether the project is ahead or behind the schedule.

The quality of the project has to be controlled and there are various methods to track and control the quality. They are discussed as follows:

Ishikawa Diagram – also known as the Fish-bone diagram or the cause and effect diagram, are used to identify the cause of the events or the problems. Here there are six categories of causes: People, Methods, Machines, Materials, Measurements and Environment.

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Ishikawa Diagram

Histogram – It is another quality tool used to give the graphical representation of the data in different classes. By doing so managers can identify the areas of improvement.

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Histogram

Pareto chart – is used to analyze the problems, their frequency of occurrence and/or the cause of the problem.

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Pareto Chart

Run chart – it helps in identifying the performance of a process over a period of time. It helps in identifying the problems, tracking the trends and variation.

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Run Chart

Scatter diagram – Another quality tool which helps in understanding the cause and effect relationship between two different kinds of data. There are three kinds of correlation that may exist between the paired data – strong correlation (both the factors have strong relationship and changes in one affects the other), moderate correlation(some changes in one data affects others while other factors do not being in any difference) and no correlation ( changes in one factor does not influence other data).

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Scatter Diagram

Control chart – These charts are used to determine the extent to which the product meets its specifications and deviations.

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Control Chart

Staffing:

The process of staffing involves planning on the number of resources required for the execution of the project, their experience levels and deciding on the required skill set. A Resource Breakdown Structure (RBS) is then formed, which shows the hierarchy of the list of resources related by their responsibility.

Based on the requirements of the projects

Employees are recruited and are directly allocated to the project

Employees released from other projects are allocated to the new project

Freshers or even experienced people from the bench are allocated

Employees who have expertise in similar technology can be chosen and can be given training in the required technology.

Apart from developing the team and delegating their tasks, Staffing also includes conducting

Team building activities – members of the team involve in icebreaking activities, fun activities, going on team outings, team dinner/lunch, etc. These activities help to improve the communication between the team members, motivate them and ice breakers helps them to get to know each other and overall, these activities helps in creating a better rapport between them which in turn improves the efficiency of the project.

Awards and Recognitions – This is one of the motivation techniques that can be used by the manager. Some of the ways in which the employees are awarded: Star performers of a project, star performer of the month, give them remuneration.

Managing:

Employee appraisals: The process by which the employee’s performance is rated by the manager after considering various aspects.

360-degree feedback: Also known as multi-source feedback in which feedback is obtained from the employee’s team ie, from his immediate work circle.

Conflict management: This aims at enhancing the positive aspects of the conflict. Conflicts can be considered as a chance for improvement. The lessons learnt from a conflict would improve the team’s output.

These are the various strategies and methodologies used in today’s IT Industry. Though the exact process may vary from company to company and project to project, the overall management functions and the project management procedures and tools used by them remain the same.

Conclusion:

Thus Management Functions helps in the efficient and organized functioning of a company, improves employee’s morale, reduces uncertainties, helps in controlling and understanding the direction in which they are heading, problems can be predicted, and improves co-ordination among employees. Thus it helps in the overall success of the organization.

Q. Explain uses of information technology in management functional area (marketing, Finance, HRM, etc). Discuss differences made by information technology in Management Functions?

Information technology is the branch of engineering that deals with computers, multimedia, automation and telecommunications used to store, retrieve, process and transmit data.

Information Technology helps organizations in many ways. It helps them to

Central data storage

Accessible to everyone at anytime

Prevents data redundancy

Data security can be enabled easily through information systems softwares

Exchange of data is made easy with internet

Reduction in time consumption for any work

The most common information technologies, which help in the managerial functions and are widely used are: Internet, Intranet, Extranet, and Decision Support System.

IT in Marketing

Company Websites:

Every company has a website these days where they furnish their vision, mission, their ranking in the industry, their awards, recognitions, their values, ethics, the standards that they adhere to, the quality certification they have obtained, their success stories, information about their projects and products, social activities that they carry out, etc.

This is one of the marketing strategy companies follow. In a way it helps in increasing the trust on the company. Anyone can find information about any company from any location with the help of the company’s websites.

Product Advertisements:

These days, advertisements for a company’s product through Internet have become a popular way. Apart from being popular it is the most effective way. Earlier, there were only two means of advertising – newspaper and television. Now most of the people have shifted to E-paper (online newspaper) and again internet comes into picture here. Also, now-a-days even manufacturing companies provides PC to their employees at their desk and people spend their majority of time in the office, the luxury of time for watching television has become very less. So to reach a customer, internet is the most effective and easier way.

Helps Marketing & Sales Executives:

All details of a product may not be furnished on the internet. Companies have Intranet portals, which is a company’s internal network, accessible only by the employees of the company. It helps marketing and sales executives to get information about the products, its specifications and pricing. For example, if the price of a company’s product is going to be varied from the month of September, sales and marketing executives are informed earlier about the change through their intranet portals which would be otherwise involve difficult process. Also in case of companies which are geographically spread, it is not possible to share information at the same time. But here, with the advent of IT information reaches everyone in fractions of second.

Project Presentations:

Sales and marketing executives will have to prepare lots of presentations for their product. Earlier, it was in paper form there were a lot of difficulties like every document have to be hand-written then typed, multiple copies have to be made so that it can be distributed among the client so that they will an idea of the product. All these presentations have to be documented for future reference. Again there would be difficulty in searching a document.

And when there is a small variant of the product coming up, the entire process has to be repeated which would be extremely time consuming and tiresome.

Now, presentations are made extremely simpler with Powerpoint, MS office, Excel, etc. And changes can be performed easily. Variant product documents can be prepared in minutes with a copy & paste, sharing of information with the client or with the department has become easier through E-mail, Shared Folders, and Centralized Databases, etc.

Direct Response Campaigns & Feedback:

It is very simple for marketing and sales executives to understand the minds of the customers these days. If they have an idea and are not sure of how the buyers would react on launch of the product, a simple online poll could help. Also there are New Tech Tools which helps marketing executives in analyzing customer preferences, market scenario, consumer’s buying habits, etc.

Feedback helps sales executives to a greater extent. Earlier obtaining feedback was difficult and tedious now it is extremely simple and so even customers are interested in taking time and providing feedback.

IT in Finance

Payroll Management:

Earlier employee payroll processing was performed manually by the finance department. Now with the Payroll Management Systems in place, it is easy to handle the entire process.

Simplified Payroll processing

Easy employee information storage and retrieval

Quicker Payroll report generation

Generation of employee payslip on adhoc basis

Leave Management:

Companies offer Earned leave to employees which when crosses the threshold has to be reimbursed. When all the leaves are exhausted further leaves has to be considered as LOP (Loss of Pay). All these tracking can be efficiently done by Information Technology.

Taxation:

Employee taxation calculations are made easier with Information Technology. Tax supporting submitted by the employees is managed and TDS can be accurately calculated. At the end of the fiscal year Form-16 is generated based on the taxation performed throughout the year.

Reimbursement:

Companies provide employees with various types of reimbursement and remunerations like certification reimbursements, travel reimbursements, salary advance, LTA and medical reimbursements. All these require submission of document by the employee which has to be recorded. Also the process of reimbursement involves various levels of approvals. The entire process is made easier and can be tracked for audit trail. Information technology makes the entire process easier and faster.

Financial Reporting:

Information Technology helps to generate multiple financial reports easily. Finance team prepares Quarterly results includes the net profit, Quarter-on-Quarter (QoQ) revenue, etc. and Annual reporting are made easier through Information Technology.

IT in Human Resource Management

Recruitment:

The entire process of recruitment is simplified by Information Technology. Candidate database can be maintained with resume and other details. Then the entire process from resume scanning, short listing, interviewing and release of offer letter is easily recorded and tracked in the recruitment system.

Employee database:

Employee database is also maintained which stores details about employee such as skill details, competencies, personal details, contact information, emergency contacts, etc. This acts as a quick reference for looking up any details about any employee by HR personnel.

Appraisals:

Appraisals are also simplified by Information Technology. Initially the employee is prompted to do a self appraisal. Later it would go to employee’s reporting manager for review and it will be finalized. There could be multiple parameters on which employees are rated on, and then a consolidated rating is given based on appraisal discussions with senior management. At the end of the process, the employee is communicated the final rating,

Probation, Confirmation:

Probation is in the initial 6 months/1 year from when an employee joins the organization. Based on the performance of employee in this period, he/she will be given confirmation at end of the period. This system involves tracking months worked, performance feedback and finally issuing confirmation letters. This process is entirely managed by this system.

Roster management:

Roster management is fully automated process where employee in time and out time is tracked through RFID access cards. In case of any defaulters, it can be tracked which employee has worked for less working hours and appropriate action can be taken.

HR Policies database:

All HR policies are documented and stored in the HR policies database. Employees can access this database to refer any particular HR policy. For example, leave policy will be documented separately and Travel policy will be documented separately.

Transfer/Relieving process:

When an employee is transferred from one office location to another, there will be some exit formalities to be done in current location. The same process applies when employee resigns and is going out of organization. This system would automate entire process and employee can obtain clearance from all departments in the office.

IT in Supply chain management (SCM)

Internet has increased the interactivity between the consumer and the companies. IT is used by many procurement processes like communicating with the vendor; get quotes from them; vendor negotiation and purchasing. Customer information storage, retrieval and processing are extremely easier with IT.

Order Management:

IT helps organizations in faster order placement by the customers. With internet connectivity, customers can get the look and feel of products and can order in minutes, which increase the revenue for the company. The rate of occurrence of error in order processing has been drastically reduced because of IT. For instance, it is possible to check the status of the courier from our place using Internet.

Operations Maintenance:

This is considered as the costliest part of SCM as it involves managing the inventory. There is dramatic improvement in the performance of inventory management with the advent of IT. For instance, companies can get notifications of stock outs from vendor and customers can easily get the same information from companies. This has reduced the time period drastically.

Consumer/Supplier information:

It is important for a company to keep track of their vendors or suppliers and consumers. Consumer information like their personal details, prior order details and supplier information like their product specification, price quote, management details, previous order information, etc can be centrally stored and maintained with IT.

Differences created by IT in Management Functions

There are various changes brought about by IT. Some of them are listed below:

Standardized way of work

Number of errors has come down by a large number

Easier Storage, protection, retrieval and accessing of data

Cost – effective solutions are obtained

Quicker and effective communication

Sharing information has becoming extremely easier

Inventory management has become easier

Increased the reliability of the companies

Increased availability of information ( through internet)

24*7 businesses is possible because of IT

Productivity increases as the processes are simplified

Drastic reduction in the time

Bridged cultural gap

Profits of companies increases

Customer satisfaction increases

Less use of paper

Conclusion:

The companies are setting up better benchmarks and are able to attain new standards because of IT. It helps companies in obtaining better customer satisfaction, increased quality of the service, and increased reliability. Thus IT has brought changes in a company’s management functions and also has brought the world closer.