Key Aspects of Management Information Systems and IT Strategies
Key Characteristics of a Management Information System
A Management Information System (MIS) must possess several fundamental characteristics to be effective:
- Interactivity: The system should allow for easy interaction and querying by users.
- Variety of Users: It should cater to the needs of various users across different departments and levels.
- Flexibility: The system must be adaptable to changing business requirements and information needs.
- Development: Continuous development and updates are crucial to maintain relevance and efficiency.
- Database Access: The ability to access and integrate with various databases is essential for comprehensive data analysis.
Developing Strategic Information Systems for Competitive Advantage
Companies can develop Strategic Information Systems to gain a competitive edge. These systems can lead to cost reductions, differentiated services for customers and suppliers, and other advantages that competitors may not have.
Examples:
- Implementing a Customer Relationship Management (CRM) system to personalize customer interactions and improve service.
- Developing a supply chain management system to optimize logistics and reduce operational costs.
- Creating an online platform for direct sales, bypassing traditional retail channels and offering competitive pricing.
Classification of Computer Information Systems
Computer information systems can be classified based on their functionality and objectives:
Management Information Systems (MIS) / Transaction Systems / Operational Systems
Examples:
- Point-of-sale (POS) systems that record daily transactions.
- Payroll systems that automate employee salary calculations.
Strategic Information Systems
Examples:
- Business intelligence systems that analyze market trends and customer behavior.
- Executive dashboards that provide a high-level view of key performance indicators.
Key Considerations for Acquiring Externally Developed Software
When acquiring externally developed software, a company should consider the following:
- The software package meets all user requirements and objectives.
- It operates with high reliability and minimal errors.
- It is delivered on time for operational commencement.
- It complies with budgetary constraints, ensuring the cost is justified.
- The magnitude of necessary adjustments for the company has been assessed.
Competitive Advantages of Data Warehouse and Data Mining
Data Warehouse and Data Mining technologies offer significant competitive advantages:
- Strategic Decision-Making: Data warehouses provide a source of selected raw material to support decision-making systems.
- Entity-Oriented Data: Data is organized around entities like products or customers, rather than processes.
- Historical Data: Stored data remains unchanged and can be retained for 5-10 years, providing a historical perspective.
- Pattern Detection: Data mining helps detect unusual patterns and extract implicit, previously unknown, and potentially useful information.
- Geographic Visualization: Systems can visualize data across different physical locations.
Considerations for IT Outsourcing
As an IT Manager considering outsourcing, here are three key factors:
- Cost Reduction: Outsourcing can significantly reduce operating expenses.
- Capital Funds: It frees up capital funds by outsourcing non-core functions.
- Access to Cash: Outsourcing agreements can involve the transfer of assets from the client to the provider.
Risks of Outsourcing:
- Inadequate contract negotiation.
- Poor choice of contractor.
- Potential contractor failure.
- Increased dependence on external entities.
- Higher costs in contract negotiation and monitoring.
- Lack of control over contractor personnel.
Impact of Telematics Technologies on Enterprise Operations
Telematics technologies, including virtual offices and telecommuting, significantly affect enterprise operations and development.
- Virtual Office: A virtual space where activities similar to those of a traditional office can be carried out.
- Telecommuting: Using telecommunications to work outside the traditional workplace, typically from home or a mobile location.
Factors Affecting Information System Development Quality
Three factors that significantly affect the quality of information system development are:
Requirements Determination
Alternative for Control: Implement thorough and iterative requirements gathering processes involving all stakeholders.
Time
Alternative for Control: Utilize project management methodologies to ensure timely delivery.
Resource Allocation
Alternative for Control: Optimize resource allocation through careful planning and monitoring.
Advantages of Using a Database Management System (DBMS)
Using a DBMS offers several advantages:
- Globalization of Information: Facilitates access to information across the organization.
- Elimination of Redundant Information: Reduces data duplication.
- Elimination of Inconsistent Information: Ensures data consistency.
- Information Sharing: Enables multiple users to share data.
- Data Integrity: Maintains the accuracy and reliability of data.
- Data Independence: Separates data from application programs.
Relationship Between Computer Information Systems and Organizational Culture
Computer Information Systems are deeply intertwined with organizational culture. In a globalized world, this relationship is even more critical. A strong organizational culture that values knowledge and continuous improvement can leverage information systems to:
- Achieve lasting organizational change.
- Improve methods and styles through self-knowledge.
- Facilitate behavioral changes and acquisition of new skills.
- Enhance control of resources and overall organization.
- Mobilize human resources for problem-solving.
- Build capacity for self-diagnosis and strategic planning.
Methodologies for Information Systems Development
Two prominent methodologies for information systems development are:
Prototype Development
Involves users directly in the design and analysis. It starts with defining overall objectives, identifying known requirements, and creating a prototype for user feedback. This iterative process refines software requirements and allows for a better understanding of what needs to be done.
Advantages: Useful when the client knows the general objectives but not the detailed requirements. It offers a better approach when developers are unsure of algorithm effectiveness or the form of human-machine interaction.
Extreme Programming
A method suited for short-term projects, involving rapid programming and including the end-user as part of the team. It emphasizes continuous feedback and adaptability.
IT Outsourcing: Aspects and Controls
Aspects to Consider:
- Greater liquidity from disposing of unnecessary equipment.
- Decrease in depreciation expenses.
- Access to technological advances without capital investment.
- Decentralization of activities.
Controls to Reduce Risk:
Hosting
Provides solutions aligned with organizational goals, focusing on cost reduction in investment, operation, modernization, and training.
Contingency
Offers a backup virtual server for quick activation in case of primary system failure, including monitoring, backup, administration, and support.
Help Desk
Provides a centralized point of contact for technical assistance, improving incident control, information handling, efficiency, intellectual property protection, productivity, operational flexibility, service quality, and user satisfaction while reducing turnover.
Ethical and Moral Principles in Information Systems
Professionals in information systems must adhere to ethical and moral principles, including:
- Using computer knowledge for the welfare of society.
- Being responsible for their actions and the proper use of computer resources.
- Educating individuals with limited computer knowledge about potential flaws and irregularities.
- Honoring property rights, including copyrights and patents.
- Respecting the privacy of others.
- Providing appropriate professional reviews.
- Honoring contracts and assigned responsibilities.
- Accessing computer resources only with proper authorization.
- Avoiding pirated software.
- Balancing the interests of stakeholders with public welfare.
- Disclosing potential hazards associated with software or documents.
- Ensuring appropriate methodology and documentation for projects.
Controls for Successful IT Outsourcing Implementation
When implementing IT outsourcing, consider these controls:
- Having appropriate information technology infrastructure.
- Fostering a supportive organizational culture.
- Maintaining responsibility and supervision of outsourced services within the company.
- Implementing third-party quality assurance to control the quality of deliverables throughout the development cycle.
Executive Information Systems (EIS)
An Executive Information System (EIS) automates the task of obtaining and presenting the most relevant information in an organization. It provides executives with easy access to internal and external information to track critical success factors.
Key Features:
- Designed to meet the needs of senior management.
- Extracts, filters, compresses, and tracks critical business information.
- Handles transactional data and adapts to new technologies, customers, markets, and competition.
- Allows direct interaction without intermediaries.
- Displays information with high-quality graphics, tables, and text.
- Draws information from online sources and organizational databases.
Success Factors:
- Executive’s formal commitment to the project.
- An operating partner to assist in defining expectations.
- Qualified IT staff for system development.
- Appropriate technology and infrastructure.
- A clear link to business objectives.
- Proper management of resistance to change.
- Effective administration of system development and expansion.
The Balanced Scorecard
The Balanced Scorecard is a method for analyzing organizational performance, supplementing financial indicators with measures that guide future performance. It proposes:
- Measuring financial and non-financial factors.
- Diagnosing and managing processes for continuous improvement.
- Assessing trends and generating predictive information.
- Designing a system of management control indicators.
- Integrating historical financial measures with future transactions.
Four Perspectives:
- Financial Perspective: Considers financial indicators as the ultimate goal, supplemented by other indicators reflecting business reality.
- Customer Perspective: Focuses on customer satisfaction and requirements.
- Internal Process Perspective: Identifies processes that must excel to meet customer requirements.
- Learning and Growth Perspective: Includes job training, satisfaction, and development of an organizational culture oriented toward improvement.
Information System (IS)
Definition: A set of elements that interact to support the activities of a company or business, including computational resources, human resources, data or information sources, and programs.
Core Activities:
- Entry
- Storage
- Processing
- Output
Basic Objectives of the IS:
- Automation of business processes.
- Support for the decision-making process.
- Achieving competitive advantage through its implementation.
Considerations for Acquiring Externally Developed Information Systems
- Purchase of packages characterized by external development concerning the organization.
- Recommended for areas that work very similarly in the market or fit the package details well.
- Modifications or adjustments may be required.
- This option is suitable when there is no qualified staff or insufficient time for internal development.