Discuss about the Management Information and Decision Support System.
Businesses today are heavily dependent on information technology and unlike before when it was used to gain a competitive advantage, it’s now used as the sole foundational component. This dependency creates a lot of risks as stated by Nicholas Carr (2003), who view is justified and to some extent true. According to Carr, businesses are investing more than 50 percent of their expenditures on information technology as a strategy to beat the competition. Furthermore, these statistics are supported by Microsoft findings in 2012 that predicted that companies would increase their technology spending’s by 50 percent by 2015. On one hand, there are some technologies that enterprises cannot survive without, for instance, electricity and access to the internet. These technologies create the relevant conditions or environments to conduct business.
However, enterprises are today focusing on other extensive technologies to enhance business such as big data, management information system and even annual replacement of technological devices e.g. PC. To some extent, these investments are way overboard beyond the returns observed. Furthermore, many enterprises today use similar IT components to conduct business which makes these technologies ubiquitous and not as innovative ventures. Nevertheless, where do the companies draw the line? What is the sound or optimum IT investment needed to succeed? This paper handles these questions by analysing the relevance of information technology in businesses today. Furthermore, the analysis will focus on the article written by Nicholas Carr (2003) supported by the relevant scholarly materials.
MIS are integrated systems that provide information to businesses in order to support the operations done by the management personnel. In essence, these systems are used to analyse organisations information in order to make better decisions. Similar to Simon and March work in the 1950s that employed the concepts of organisational behavioural tactics, these systems at the heart of operation use a combination of human behaviour and that of an organisation. Therefore, through the said system decisions are either programmed to fit a common repetitive routine or are designed to fit a unique structure after a thorough analysis of the data at hand. These processes help organisations make better decisions because they are centred on facts and not assumptions. Furthermore, forecasting, an integral concept for business success is also facilitated by MIS because the management can predict the future through the records they have of the past. For instance, a manufacturing company can predict the number of customers in the coming season e.g. winter based on the records of the previous year (Asemin, Safari & 2011).
A variety of MIS systems exist today including; decision support systems, knowledge management systems, and functional business systems among others. Yes, it is true most of these technologies are redundant and will possibly be applied by many other organisations, however, their benefits out way their expenditures. Moreover, with the modern state of events vendors of these systems have developed strategies to increase their earning such as annual licences that force users to make annual payments (Carr, 2015). However, consider the business opportunities presented, for instance, the functional business systems which comprise of finance, accounting, sales and marketing systems help monitor business operations (Al-Mamry, Shamsuddin & Aziati, 2014). An organisation’s management can keep a watchful eye on business activities and develop adequate records for auditing purposes. Moreover, human resource system can organise and distribute manpower to the locations they are needed further increasing an enterprise’s efficiency. Now, another company may have the same system but that does not make it ubiquitous instead it makes it a survival tactic a contrast to Nicholas Carr views.
Based on the article presented by Nicholas Carr, technologies can be classified into two groups; functional and proprietary. Functional technologies like information technology are only of value if they are shared, which makes sense when technologies like the internet and the World Wide Web are considered. However, according to him, these technologies are beneficial if they are restricted to a few thus guarantying a competitive advantage. Nevertheless, the basic concepts of IT, be it software, hardware or the internet focus on globalisation where different economies are connected to create an extended marketplace. Therefore, through the advancement in IT, (a functional technology), organisations have a bigger market to conduct their businesses (Varley, 2006).
In addition to this, computer systems facilitated by the hardware and the supporting software systems enhance the services or products offered by organisations. Moreover, recent studies reveal that there are over 1.25 billion Windows PCs in the world. This number only caters for one brand of computers and thus signifies their importance not only to business but also to the way of life. As an IT concept, computers are designed to improve the way of life however the modern application reveals a much deeper role for business, that of survival (Rosoff, 2011). Furthermore, the same systems act as a foundation for the internet and the worldwide web whereas a central hub of information is found. The internet is an interconnection of networks that serves as a communication medium between different computer users. On the other hand, the worldwide web is the service or system used to access the internet. These two concepts integrate so many devices and people in the world which later is used to support their applications in organisations while conducting business in a market environment.
One of the most outstanding remarks of the Nicholas Carr article is that of IT spending and financial performance, where he addresses a lack of connection between the two thus emphasising his point that IT does not matter. However, consider the importance of business intelligence and its associated components of database systems. In general, BI is a tool used to analyse gathered data from multiple locations in order to make better decisions. Therefore, as a concept, it will encapsulate the facilities of information system and database system including items like data warehouses (Chugh, 2013). Due to the increased market competition, organisations cannot depend on the overall market information available instead they are forced to develop their own systems that shed light on the current state of affairs and future of the marketplace. This means business intelligence produce justifiable results through strategic procedures. Moreover, their importance is also necessitated by the complexity of the new environment and technologies.
Our current society is filled with information, analysing such data for business relevance requires adequate structures and elaborate techniques. BI will integrate large data facilities such as database systems and warehouses to accurately interpret data to produce quality market intelligence. Furthermore, these facilities enhance data collection methods, process execution and reporting which in the end leads to better problem-solving techniques. In addition to this, risk assessments are done conveniently based on the right decisions that are accompanied by the correct actions. A quick review of BI systems reveals an elaborate structure that encompasses database systems (warehouses as well) with information systems (IS) to make better decisions (Al-ma’aitah, 2013). These IS system will include the previously discussed systems such as MIS, human resource systems, finance and accounting systems.
A revolutionary technology that facilitates the trade of goods and services through the digital medium (internet). Many organisations in the past, particularly those that were business minded were caught off guard by this technology as they awaited to see its feasibility as suggested by Nicholas Carr. In the end, new businesses emerged that have now surpassed traditional businesses. Nevertheless, when conducting business through e-commerce several models can be used and are determined by an enterprise’s requirements such as the services or the recipients (Sinha, Choudhary & Mishra, 2012). At an enterprise level, four business models stand out; business to business (B2B), business to consumer (B2C), consumer to consumer (C2C) and consumer to business (C2B) models. B2B models will comprise of a product supplier and retailer where the supplier will provide the services or goods to an intermediary buyer who then sells to the final consumer. B2C, as the name suggest, will have the business itself selling products to the final consumer. C2C model will have consumers selling their own products to other consumers through a digital platform, e.g. selling used household items online. Finally, the C2B model where a website will host multiple organisation with similar services and based on the user requirements, a consumer will choose the most appropriate. For instance, different insurance companies offering the same services online (Tutorial point, 2017).
E-commerce like any other technological advancement is ever changing and its application will depend on the immediate requirements as better services are always provided. Moreover, recent trends suggest an increase in online retail facilities that will see shipping cost decreased thus enable e-tailers to conduct international business through their established websites. In other ventures, e-commerce is shifting to include mobile shipping services where smartphone and other handheld devices are proposed to take over markets. These devices increase mobility and flexibility which guarantees a higher customer satisfaction rate. Moreover, mobile business improves customer engagement a valuable insight to businesses today (Parmar, 2017).
Information technology is a dynamic and diverse subject that has greatly changed the way of life. Its advantages overwhelm the disadvantages and are now a compulsory requirement for business, however, with these benefits come the associated risks and concerns. At the heart of these concerns are ethical issues more so those that deal with information privacy and security. Formal education will focus on the technical capabilities of technology without highlighting the misuse and abilities of these technical skills. Hackers, for instance, will exploit the innocence of users to gain access to privileged information thus wrongly benefit from it. Moreover, consider the countless violations made by governments and other organisations who access unauthorised information just because they can. To them it may seem as a security protocol, however, access without authorization is still a crime (Shinder, 2005). In addition to this consider other minor incidences like a company that monitors its employee’s information to manage their activities or a person who accesses a colleague’s email account. Technically, these acts are not legal violations as they occur within an open network where zero authentication or authorization is given.
Cybercrime and computer crimes are other threats seen today where illegal activities such as fraud, embezzlement and harassment are done using computers. These criminal activities are in most cases facilitated using malware infections or sabotage that will focus on a system’s weakness. Furthermore, research done by the likes of the FBI (Federal Bureau of Investigation) suggest that nearly all business today (85 percent) are victims of cybercriminal acts. SO, why is this? According to research, large organisations will house a wide range of resources that are attractive to cybercriminals. On the other hand, small businesses will have minimal security measures because of limited resources thus attract the attacks (Williams, 2017). Moreover, with the availability of resources comes to the cases of piracy, where owners are robbed of their intellectual property such as inventions and designs. IT enables organisations and individuals to imitate products and services which violate the copyright laws among many others (Britz, 1996).
Innovation is the key to business success and no other component offers this outcome like technology especially information technology where support systems such as MIS are constantly changing to increase their benefits. Business analysis is easily performed using MIS systems which translate to better decisions. Therefore, with advancements such as cloud computing that offer computing services via the internet, the cost of MIS applications will decrease which will increase productivity and eventually the market competition. As a concept, cloud computing reduces the cost of IT infrastructure by enabling an organization to lease services that are too expensive to implement. Moreover, it promotes virtualization which in itself helps organisations to use minimal storage devices, for instance, using a common server in different departments (Khanduja, 2015).
Secondly, the latest trends in mobile business and applications enhance the feasibility of management systems such as MIS where customer data is easily available through the services offered via the handheld devices. Furthermore, customer satisfaction is increased through the services offered by mobile applications which reduce the investments made in MIS systems. In addition to this, the business analytics are improved by the enhanced systems that are designed to handle the modern data requirements (MSG, 2017).
Conclusion
Nicholas Carr remarks perceive information technology as an irrelevant business strategy because it’s no longer innovative but ubiquitous in nature. Moreover, he advocates for reduced and delayed investments in IT systems in order to achieve maximum financial returns. First, his sentiments are completely wrong more so his overall assessment that sees IT as an irrelevant venture. For one, information technology is the backbone of businesses today, in fact, no organisation can survive let alone thrive without adopting a modern technological outlook. Consider the benefits of business intelligence, information management and database systems. These technologies help organisations make better decisions an important item of business success.
In addition to this, consider other minor technological components that facilitate business today such as computers, the internet, printers and even electrical power. At best, all organisations will have these facilities regardless of their size or even location. These minor IT items are then used by organisations to execute their activities which translate to efficient services offered to the customers (end users). However, modern investments do call for strategic procedures where enterprises can plan the financial investments they make in IT. For instance, it’s not logical to have annual replacements of devices if the existing ones are in good working conditions. Through such intelligent decisions, the overall operational costs can be lowered increasing the revenues obtained. In conclusion, the value of information technology surpasses the financial losses observed which clearly refutes the claims suggested by Carr’s article.
References
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