The Role Of Is And It Management

Published Date: 02 Nov 2017

Introduction

It is essential to describe what an information system is? Take an example of any firm in which there are certain environmental factors that include resources and constraints, governments, competitors, financial institutions, culture, knowledge and technology which forms the information system since there has to be a flow of information between all these intermediaries.

Similarly, a computer based information system is a collection of hardware, software, data, people and procedures that are designed to generate information that supports the day-to-day, short range, and long-range activities of users in an organization. The information systems that are used in the organization are as follows;

There is however a difference between information systems and information technology. Information systems (IS) include all systems and procedures involved in the collection, storage, production and distribution of information whereas Information technology (IT) described the equipment used to capture, store, transmit or present information. IT provides a large part of the information systems infrastructure.

IS Strategy and environment of the Organization? How they contribute to the achievement of organizational objectives

The overall strategic direction is set by the Chief Operating Officer and Board, taking into accounts such factors as the external economic and political environment, the capabilities and known strategies of the competition, regulatory frameworks, skills and resource availability, and appetite for risk. Knowledge of these areas enables properly informed decisions to be made on the overall strategic direction for the entity. Therefore, it is widely accepted that an organization’s information system should support corporate and business strategy. Three examples of how this may occur following;

IS/IT may provide a possible source of competitive advantage. This involves new technology not yet available to others or simply using existing technology in a different way.

The information system can help in formulating business strategy by providing information from internal and external sources.

Developments in IT can provide new channels for distributing and collecting information, and /or for conducting transactions e.g. the internet.

Benefits of technological change might therefore be as follows;

To cut production costs and so (probably) to reduce the sales price to the customer

To develop better quality products and services

To develop products and services that did not exist before

To provide products or services to customers more quickly or effectively

To free staff from repetitive work and to tap their creativity

The way in which firms are managed, employees are mobilized, markets are identified, services are provided, products are made and sold have had a major impact on the organization’s overall objectives.

Discussions with key staff

For the purpose of analysis of information systems of the Best Way Group UK (hereinafter referred to as "the organization"), the following discussions with the key staff have been conducted as follows;

Discussion with the Chief Information Officer regarding all the information systems currently in operation

Discussions with steering committee for ensuring activities in compliance with IS/IT strategy and ultimately the overall organization strategy, whether resources committed are used effectively, how monitoring is done on IS/IT projects and provision of leadership and guidance on IS/IT.

Inquiries with database administrator for all data and information held within the organization.

Discussions with data processing staff for the purpose of obtaining an understanding information inputs to the systems.

The Role of IS and IT management

The Chief Information Officer is the head of IT and IT management and has the following responsibilities

CIO Responsibilities

Comments

IS/IT Strategy development

The IS/IT strategy compliment the overall strategy of the organization. The strategy must also be achievable given budgetary constraints. Returns on investments in IS/IT should be monitored

IS/IT Risk Management

This is a wide ranging area including legal risks, such as ensuring compliance with relevant data protection, legislation, ensuring adequate IS/IT security measures and disaster recovery arrangements

Steering Committee

The CIO should play a key role in a steering committee set up to oversee the role of IS/IT within the organization.

IS/IT infrastructure

Standards should be set for the purchase and use of hardware and software within the organization

Ensuring employees have the IS/IT support and tools they require

Efficient links are required between IS/IT staff and the rest of the organization. Technical assistance should be easily obtainable

The use of information Technology within the organization and the information systems that are used

The uses of IT based resources in the organization are summarized as follows;

It has helped to apply consistently predefined business rules and assists every department particularly finance and accounts in performing complex calculations in processing large volumes of transactions and data

Helps to enhance the timeliness, availability, and accuracy of information processing.

Helps to enhance the ability to monitor the performance of the organization’s activities and its policies and procedures.

Enhances the ability to achieve effective segregation of duties by implementing security controls in applications, databases and operating systems.

Use in computer based information systems including, management information system, and transaction processing system, financial reporting systems including sales, purchase, stock, and payroll systems.

Helps to promote effective communication and coordination between all the departments through a centralized Management Information System.

Consistency and reliability of the information through system generated reports which are counter checked through the organization’s information risk management controls.

Helps to improve presentation of work using presentation software, for example MS PowerPoint and other related software being used for marketing and sales promotion materials through use of computer graphics.

Portability using VPN to access the organization’s network in case of employees working off-site.

Use of image processing systems through electronic signatures for authentication and use of biometric thumb attendance machines to ensure employee leave records and working hours are monitored accurately.

The information systems that are used in the organization are as follows;

Management Information System (MIS) and

A Management information system in an information system that generates accurate, timely, and organized information to managers and other users who can make decisions, solve problems, supervise activities, and track progress. Because it generates reports on a regular basis, a management information system sometimes also called a management reporting system (MRS). This system serves the organization at management level. The tasks performed by MIS are as follows;

Initiating transaction (for example, automatically making a purchase order if stock levels are below a specified amount).

Recording transactions as they occur (for example, a sale is input to the sales ledger system)

Processing data

Producing reports

Responding to inquiries.

A MIS is good at providing regular formal information gleaned from normal commercial data. For example, an MIS relating to sales provides managers with information on the following;

Gross profit margins of particular products.

Success in particular markets

Credit Control information (aged debtors and payment against old balances)

Below is a table showing typical inputs, processes and outputs at each level of a management information system.

Level of MIS

Inputs

Processes

Outputs

Strategic

Plans

Competitor Information

Market Information

Summarize

Investigate

Compare

Forecast

Key ratios

Ad hoc market analysis

Strategic plans

Tactical

Historical data

Budget data

Compare

Classify

Summarize

Variance analyses

Exception reports

Operational

Customer orders

Programmed stock

Control levels

Update files

Output Reports

Updated files

Listings

Invoices

Transaction Processing Systems (TPS)

The organization has a transaction processing system that captures and processes data generated during the day-to day transactions. A transaction is a business activity such as a deposit, payment, order or reservation. This system serves the organization at operational level.

Clerical staff typically performs the activities with transaction processing, which include the following;

Recording a business activity such as a customer’s order, an employee’s timecard or a client’s payment.

Confirming an action or triggering a response, such as sending a thank-you to a customer, generating an employee’s paycheck or issuing a receipt to a client.

Maintaining data, which involves adding new data, changing data, or removing unwanted data

Transaction processing systems contain two categories of files a master file and a file of transactions that is used for updating the master records since computerized transaction processing systems have clear cost and performance advantages over manual systems.

Transaction processing systems are used to produce management information such as reports on cumulative sales figures to date, total amounts owed to suppliers or owed by debtors, total stock turnover to date, the value of current stock in hand, but the main part of transaction processing system is operational, as an integral part of day-to-day operations.

Financial Reporting Systems (FRS)

There is a financial reporting system in place for managing all financial information. The financial reporting system is a system of ledgers coordinated by double-entry and comprising:

Sales Ledger

Purchase ledger

Nominal Ledger

Sales ledger and purchase ledger. The sales and purchase ledger are fed by order processing systems and both feed into the nominal ledger via debtors and creditors control accounts. Both will include details of individuals’ customers or suppliers and store up cumulative data about transactions, partly to fulfill legal obligations and partly for management reporting purposes. The common report is an aged analysis.

Nominal ledger contains records of sales and expense by type. In an integrated system an invoice posted to a purchase ledger account would also update the advertising expense account in the nominal ledger. Also subsidiary to the nominal ledger are the cash book, the fixed asset system and the stock control system.

Order Processing & Inventory (Stock) Control Systems

There are two types of order processing system, one for items to be bought, the other for items to be sold. The purchase order system operates on the basis of specification of supplies, what it will be used for, where to buy from it and how much funds are needed for this. All orders are pre-numbered and dated to help identify them at a later date in case of any query about what was ordered.

In contrast, a sales order is processed when a customer rings up, or places an order through any other medium of correspondence, the information that is to be fed by the system includes customer ID, title of business and address, order number, order date, accounts reference, if any, product code, product detailed description, quantity needed, any value added tax and carriage.

There is however another system, stock control system, that is, central to both purchase order processing and sales order processing as a system of controlling what stock is held. For this purpose, the production system may have its own records for individual machines (time in use, energy inputs, maintenance required and so on, and either as part of the production system or as a separate time-recording/personnel system finished goods cost would also need to reflect the cost of the people who worked on the product.

Personnel and Payroll Systems

The personnel system has been concerned with issues such as the following;

The adequacy and competitiveness of the company’s wages and salary structure (and therefore also for staff grading).

Training of staff.

Pension plans, and other employment benefits

Maintenance of personnel statistics such as labor turnover

Attendance and time record through the use of biometric thumb attendance machines

However, a fuller employee database has also been maintained with applications beyond the payroll system.

Manpower planning and allocation, based on staff qualifications, disclosed in the database.

For each employee, a record of career progress, training and experience and so on.

Selection of appropriate staff for further training and /or promotion.

Preparation of statistics on sickness, injuries and absenteeism.

Marketing Systems

The principal functions of marketing management might be listed as market research, advertising and sales promotion, public relations, selling, servicing and methods of payment and credit. A marketing manager reports directly to the chief operating officer. Many of the data processing needs of the marketing function are suitable for computerized methods. Typical data requirements within the department include the following;

Data for market research, including the results of surveys, questionnaires, needed to determine market strategy

Data relating to the success or failure of advertising.

Data relating to sales and distribution. This may include:

Customer orders and inquiries

Sales made by each salesman and commission earned

Sales per outlet, per geographical area, per product, per product group

Comparisons with budget

Data relating to after-sales service and warranty work.

There is however, a customer database used to segment the market so that it would be possible to analyze customers by age, attitudes (per lifestyle market research surveys), geographical area (by post code) and occupation.