MAN5901 | Information Systems Challenges in Management
Introduction
For any business to achieve success, the business must exploit all its capabilities. One of the capabilities that is often overlooked by businesses is information management. For any organisation, there must be an effective information system that allows the information to be entered from various organizational processes and then is converted into a form that can be used by the management to make business decisions. The effectiveness of Information Systems can be improved by either using the information in new ways or increasing the accuracy of the information (Liang & Xue, 2004).
A similar problem is being faced by Bob who is the owner of a small auto mechanics business, He wants to implement an information system that can meet the following needs of the business:
- Keep a track of the customers;
- Keep a track of the completed jobs;
- Keep a track of the employee work;
- Keep a track of the supplies used;
- Send reminders to the customers when their car service is due, and
- The information can be updated by the mechanics as well, so the user-friendly interface is needed.
Proposed Solution
Based on the above requirements, it is suggested that the business establishes an ERP System (Enterprise Resource System). Liang & Xue (2004) argued that usually it is considered that ERP suits large businesses only as large businesses have scalability and the organizational size plays a significant role in ERP implementation.
Blackwell et al. (2006) argued that it is usually considered that the traditional ERP system is costly, and therefore high cost cannot be usually borne by a small business. While some basic ERP systems can be implemented for small businesses, however, these systems have a fundamental drawback: these systems are standardized and lack customization. So, it would mean that there may be several features that are needed by an organisation but are not offered by a standard system. Also, it would be mean that there may be several features that are offered by the system but are not needed by an organisation. Thus, it is suggested that Bob implements a customized information system in his business.
Important Considerations
Ramdani et al (2009) proposed that before establishing an information system there is a need to evaluate its suitability for the business in terms of business needs by looking at various considerations. The first consideration is the cost as the cost of an open-source ERP system is much lower than proprietary ERPs. The second consideration is the size of the organisation as a small organisation will have a lower level of complexity for an ERP system in comparison to a large organisation. The third consideration is the industry type as a manufacturing firm will have different requirements than a service firm. The fourth consideration is the availability of information as a system must provide the users with the desired information. This consideration requires that all the systems are seamlessly integrated with the information system. The fifth consideration is the ease of access. As per this consideration, the users must be able to obtain the desired information in the desired format so that this information can be used by the management to make business decisions. The sixth consideration is the decision to develop the system internally or outsource the development. In the case of niche businesses, a standard ERP system may not be suitable to handle the complex tasks and therefore there is a need for in-house system development. The seventh consideration is the IT competence level of the users as the users need to update and fetch the information from the system, so the users must have the necessary competency level (Quiescenti et al., 2006; Koh et al., 2009).
There are several other critical success factors in implementation and application phases of the information system. The first critical success factor is that there should be a proper knowledge sharing between the management and the development team in terms of the requirements of the management, solutions offered by the development team, and the user interface. The constant knowledge sharing is crucial as if the original requirements are not met, there can be a severe impact on the organisation. The severity of the impact is dependent on the delay in identification of the requirements not being met: In case, the identification is done during the implementation, then there will be a delay in the implementation and the cost of the project will increase. However, if the identification is done post-implementation, then there is a possibility that the system is redundant and the organisation may have to start a new project. This would result in significant time delay as well as increase the cost. The second critical success factor is the appointment of an external consultant. It is a possibility that the management may not be able to understand the technical requirements, so it must appoint an external consultant to coordinate with the vendor. The third critical success factor is the resistance shown by the employees as the employees must communicate their requirements to the development team. In case the employees do not present their requirements, the implementation will not be a success. The fourth critical success factor is the maintenance needed- how much of the maintenance can be done inhouse and how much of the maintenance will be done by the vendor (Olsen & Stre, 2007; Chen et al., 2008).
Advantages and Disadvantages of Proposed Solution
There will be several considerations that need to be addressed at the operational level, however, the core advantage of the proposed solution is that it will improve the information management in the organisation. The core disadvantage of the proposed solution is that it will require several changes in the organisation, that will be expensive for a small business like that owned by Bob.
Conclusion
It is necessary for Bob to consider all the above-mentioned aspects to ensure that the benefits of the system exceed the cost of the system. The above designing considerations should help Bob in having a system that can help the business to grow.
References
Blackwell, P., Shehab, E. M. & Kay, J. M. (2006). An Effective Decision – Support Framework for Implementing Enterprise Information Systems within SMEs. International Journal of Production Research, 44(17), 3533-3552.
Chen, R. S., Sun, C. M, Helms, M. M. & Jih, W. J. (2008). Role Negotiation and Interaction: An Exploratory Case Study of the Impact of Management Consultants on ERP system. Implementation in SMEs in Taiwan. Information Systems Management. 25(2), 159-173.
Koh, S. C. L., Gunasekaran, A. & Cooper, J. R. (2009). The Demand for Training and Consultancy Investment in SME Specific ERP Systems Implementation and Operation.
International Journal of Production Economics, 122(1), 241-254.
Liang, H. & Xue, Y. (2004). Coping with ERP-Related Contextual Issues in SMEs: A Vendor’s Perspective. The Journal of Strategic Information Systems. 13(4), 399-415.
Ramdani, B., Kawalek, P. & Lorenzo, O. (2009). Predicting SME’s Adoption of Enterprise Systems. Journal of Enterprise Information Management, 22(10), 3533-3552.
Olsen, K. A. & Setre, P. (2007). ERP for SMEs – Is Proprietary Software an Alternative? Business Process Management Journal, 13(3), 379-389.
Quiescenti, M., Bruccoleri, M., La Commare, U., La Diega, S. N. & Perrone, G. (2006). Business Process – Oriented Design of Enterprise Resource Planning (ERP) Systems for Small and Medium Enterprises. International Journal of Production Research, 44(18/19), 3797-3810.
