Information systems applications have their origin in almost all areas of a company and are related to all problems in the organization.
Company goals and role of information systems
Perhaps surprisingly, the great importance given to the business aspect when discussing the reasons why projects are proposed.
A fundamental principle in the development of information systems by companies is that applications are a tool and not an instrument that must be had to use information technology; Consequently, information systems must be developed based on their own ability to improve the performance of the organization, however, these reasons do not mean only gains and losses. The operation of a company also includes benefits for its employees, customers and other people with whom it has dealings.
Reasons for proposing information systems projects
Information systems requests are motivated by the following three general objectives:
- Solve a problem
Activities, processes or functions that currently or perhaps in the future do not meet performance standards or expectations, for which it is necessary to take action to resolve the difficulties.
Example Reduce the excessive number of errors in the input data by eliminating the manual entry of sales data.
- Take a chance
A change to expand or improve the economic performance of the company and its competitiveness within the market.
Example Capture a large customer base by offering a new program with a greater number of direct flights and discounts on the ticket price.
- Give answers to managers
Provide information in response to orders, requests or mandates originated by a legislative or administrative authority, carry out tasks in a certain way, or also change the information or perhaps the performance.
Example Notify annually To whom it may concern, using the appropriate formats, the interest obtained from savings, checking accounts and fixed-term deposit.
To achieve these objectives, companies undertake projects for one or more of the reasons, THE FIVE C:
- Capacity Communication Costs Control Competitiveness
| TABLE OF THE FIVE C
5 REASONS TO START AN INFORMATION SYSTEM PROJECT |
|
| REASON | EXPLANATION |
| 1. CAPACITY | |
| Higher processing speed. | Use of the inherent ability of the computer to perform calculations, order, retrieve data and information and repeatedly perform the same task with greater speed than that of human beings. |
| Increase in volume. | Provide the ability to process a number of activities, perhaps to take advantage of new opportunities of the commercial type, often as a result of the growth of the company, which exceeds the capabilities and procedures that were key to achieving the achievements obtained. |
| Faster retrieval of information. | Location and retrieval of information from the site where it is stored and carry out complex searches. |
| 2. CONTROL | |
| Greater accuracy and improved consistency. | Carry out computational steps, including arithmetic, accounting, etc. correctly and always in the same way. |
| Provide better security. | Safeguard important and sensitive data in a way that is only accessible to authorized personnel. |
| 3. COMMUNICATION | |
| Improve in communication. | Accelerate the flow of information and messages between remote locations as well as within the office, including the transmission of documents within them. |
| Integration of the company's areas. | Coordinate the activities of the company that are carried out in different areas of an organization through the capture and distribution of information. |
| 4. COSTS | |
| Cost monitoring. | Monitoring of the costs of labor, goods and facilities to determine their evolution in relation to those expected. |
| Cost reduction. | Use of computing power to process data at a lower cost than is possible with other methods, while maintaining the same accuracy and performance levels, |
| 5. COMPETITIVENESS | |
| Attract customers. | Modify the services provided and the relationship with customers in such a way that they do not choose to change providers. |
| Leave out the competition. | Reduce the chances that competitors have access to the same market as a consequence of the way the organization uses its information systems. |
| Better agreements with suppliers. | Changes in prices, services, delivery conditions and relationships between suppliers and the organization for the benefit of this. |
| Development of new products. | Introduction of new products with characteristics that use or are influenced by new information technologies. |
- Capacity
The activities of the organization are influenced by its ability to process transactions quickly and efficiently. Information systems enhance this ability in three ways:
- Increase processing speed Allow handling of increasing volume of transactions Quickly retrieve information
- Accelerated processing
The inherent speed with which the computer processes data is one of the reasons why organizations seek project development. Computer-based systems can help eliminate the need for tedious calculations and repetitive comparisons.
An automated system can be very useful if what is needed is fast processing.
- Increase in volume
Because information systems are an asset to the company, they often receive a primary consideration before or during the growth and expansion of the business. The inability to keep up the process of processing does not necessarily mean abandonment of existing procedures.
In these situations, the analyst considers the impact of the introduction of computerized processing, whether the existing system is manual or the expansion of it. Increasing speed alone is unlikely to be the answer.
Processing time per transaction increases if the number of business activities of the company is considered along with its growth pattern, the storage capacity of the system, the location of the business activities in relation to those of the processing center and other aspects of similar nature.
- Quick information retrieval
Organizations store large amounts of data related to their operations, employees, customers, suppliers, and finances. In this case, two aspects are important:
- Where to store the data? How to retrieve it when it is needed?
Data storage is more complex if users retrieve data in different ways under different circumstances.
In a company that does not use computers, the answers to all these questions can be found through records contained in files (one for each question) or through a relevant file. If multiple files are kept then each one is organized to answer a specific question.
- Control
Previously, the relationship between information systems with administration and control of operations was discussed.
How is the management and control of operations related to the reasons for developing information systems?
Basically in two ways:
- To improve accuracy and consistency Increase the security of the most important data.
- Improved accuracy and consistency
To demonstrate how information systems can achieve this goal, consider the common activity of invoice processing as an example.
The standard processing consists of accumulating a group of invoices before being sent for processing and accounting, then the employees who receive the orders calculate the total of the invoices, thus computing the amounts of purchases and additional expenses, after they are received in the accounting Errors and inconsistencies are reconciled, the data is sent again for correction and adjustments in the department. You received invoices and balances are adjusted.
If the procedure for calculating the amount of each invoice and accumulating the total by lot is incorporated into a computer program then the bookkeeper can follow all the steps without omitting any, without the need for all those cumbersome procedures and by himself.
- Provide better security
Sometimes the fact that the data can be stored in a suitable way for reading by means of a machine provides greater security, which is difficult to achieve in an environment where there are no computers.
As an example; Before automation, a formula book was given to the workers in charge of manufacturing the products. Said book contained the names, quantities and formulas of the raw materials necessary for the manufacture of a certain product, the leakage of information towards the competition was a fairly high constant risk.
The administration developed a computer program in which the names, quantities and inventories in stock of said raw materials were encoded and an access code was provided only to authorized personnel. This almost completely eliminated the potential risk of information leakage to the competition.
- Communication
Lack of communication is a common source of difficulties, affecting both customers and employees. However, well-developed information systems expand communication and facilitate the integration of individual functions.
- Increased communication
Many companies increase their communication channels and channels by developing special networks for this purpose; These routes cover the entire country and allow you to accelerate the flow of information within your offices and facilities that are not within the same locality.
The credit card system that allows many people to make their purchases of goods and services would not exist without information systems. Very large communication networks and regional processing centers verify credit and authorize transactions in seconds.
One of the most important characteristics of information systems for offices is the electronic transmission of information such as data, files and documents.
- Integration of areas in the company
Frequently the activities of the companies cover several areas of the organization; work done in one area is confused with work done elsewhere.
To better coordinate operations, the administration contributes with the implementation of terminals with operational information systems between the production and purchasing departments from which reports are extracted from both sides with data such as the inventories available for production and the requirements of the purchases of materials.
- Costs
Many organizations have been left out of commercial activity and many others have been unable to achieve success due to little control over costs or due to total ignorance of these. Information systems play a very important role both in monitoring and in reducing operating costs.
- Cost monitoring
Keeping track of the costs of labor, goods and general expenses is an essential task to determine if the company is evolving as expected, that is, according to budget.
Manual cost tracking systems are not as efficient as automated ones, nor do they offer the same number of categories and thorough comparisons.
The increasing competitiveness of the market creates the need for better methods to secure costs and relate them to individual and organizational productivity. This objective is likely to be of greater importance in the future.
- Costs reduction
Some system designs help lower costs by taking advantage of the automatic calculation and data retrieval capabilities that are included in computer program procedures.
In the past, many people thought that the development of information systems applications, especially those with a high degree of automation, would mean less need for workers. While it is true that information systems change the nature of work, the need for operating people has not diminished; rarely are people displaced, in fact their work becomes more interesting by automating all the tedious tasks.
- Competitiveness
computer information systems are a strategic weapon that can change the way the company competes in the market. As a consequence of the above, these systems improve the organization and help it gain competitive advantages. In contrast, if the company's competitors have more advanced capabilities for information processing, then the information systems can become a competitive disadvantage.
Therefore, information systems capabilities are an important consideration in formulating the organization's strategy.
An organization can gain competitive advantages through its information systems through 4 different ways, where each one considers the entities with which the company deals as part of its commercial activities, these are:
- Clients Competitors Suppliers Products and services.
Circle of competitiveness
Circle of competitiveness
- Secure clients
Given that customers are the most important for an organization, managers look for different ways to get together with new customers and at the same time, retain the ones they have.
How can the company's information systems offer in this case a competitive advantage or a significant benefit over its competitors?
Here are three ways companies use to reach out to and retain customers:
- Offering better prices, providing exclusive services, presenting different products.
- Leave out competitors
Taking the leap over competitors can be risky if they find a way to duplicate the company's achievements. Discounts as an example do not provide long-term strategic benefits, however information systems can be the basis for keeping competitors out of the market, either by deterring their attempts to enter the market or by creating obstacles to their entry.
- Better agreements with suppliers
In business, suppliers are also strategically important. One way to use information systems to favor arrangements with suppliers is by receiving a better price, forecasting inventories with an annual supply system generated through statistical consumption reports of our orders to our suppliers or online orders.
- Form foundations for new products
Information systems also form the basis for the creation, promotion and distribution of new products and services.
Large banks, for example, are beginning to recognize the value of the demographic information they have regarding their debtors and savers.
By using computers to analyze data on economic trends, housing developments and other financial news - all without violating, for any reason, the right to confidential information - banks can gain valuable information from their market research.
Methodologies for the planning of information systems.
Formal planning methods are developed to support managers and executives in the process of developing information systems that help achieve the goals of the organization.
The purpose of these methods is to describe organizational-level guidelines for the company's information systems. This includes the identification of key elements that both applications and their development depend on. Also included is the description of the relationships between these elements and possibly the documentation of current information needs or the outline of future plans of the company.
The three most used methodologies for information systems planning are:
- IBM Enterprise Systems Planning (BSP) Method Nolan, Norton & Co. Computer Architecture Strategic Planning Method Critical Success Factors Method
- The IBM Business Systems Planning (BSP) Method is one of the most widely used and focuses on identifying those necessary to start an organization.The Nolan, Norton & Norton Computer Architecture Strategic Planning Method Co. links the organization's current capacity with its current needs. The Critical Success Factors Method seeks to identify the areas that are key to the organization's survival and ensure incorporation into information systems.
Information systems project request sources
There are four main sources of project requests, these applicants can be:
- Heads of departments Senior executives Systems analysts External groups
| APPLICANT - DESCRIPTION |
| Heads of department
It is common for people related to the daily activities of the company, whether they are employees or managers, seek help within their own departments. |
| Senior executives
It is usual for senior executives, such as presidents, vice-presidents or board directors, to have information that is not available to managers. This information coupled with the great ones that these executives have influence on the request of an information system (they direct the entire organization more than several departments). |
| Systems
analysts Sometimes the systems analyst looks for areas where projects should be developed or encourages a manager to allow the development of an information system on his behalf. |
| External Groups
Events external to the organization also lead to the formulation of projects. |
MATRIX TABLE OF ANALOGIES AND DIFFERENCES BETWEEN TYPES OF SYSTEMS
| TYPES OF INFORMATION SYSTEMS | ||
| TRANSACTIONAL | SUPPORTING DECISIONS | STRATEGIC |
| Significant savings in labor. | They do not usually save labor. | Its function is to achieve advantages that competitors do not have. |
| They are information gatherers. | Your information supports middle managers in repetitive and unstructured decisions. | Its role is neither transactional nor decision support, however it can perform both tasks. |
| They are usually the first system implemented in the company | They are implemented after transactional systems. | Its form of development is based on increments. |
| They are intensive in the input and output of information. | They are usually intensive in calculations, but not in the input and output of information. | They support the product innovation process. |
| Its cost is easily justifiable. | Its economic justification is difficult. | They are expensive. |
| Adaptable to market application packages. | They are usually interactive and with high protocol standards. | They are usually developed In House so they are not adaptable to market packages. |
Conclusions and recommendations
Although project requests are often made for more than one reason, those presented here indicate areas where the proposals are most justifiable.
The desire to appear to increase productivity or achieve greater progress by having an automated system is not an adequate justification for investing in a computer-based information system. The bases of any request for an information system project should be the improvements - such as those already mentioned - in operations and transactions.
How information systems adapt in an organization depends on the business nature of the organization and your reasons for its success. If customers are the most important thing, systems analysts may direct most of their work towards applications that improve the service and products that are provided to them. If cost control is the company's main indicator of success, then most applications will be directed toward identifying and preserving cost advantages. If the launch of new products is the key to success, then information systems should help us identify and create such products.
It is almost impossible for information systems to be effective if they are developed independently of the objectives, values and goals of the organization, for which they were designed.
"Requests for information projects must always be prepared and evaluated according to this principle."
BIBLIOGRAPHY
- Administration of application development portfolio / Chap. 1 Introduction to Information Systems Development. Microsoft® Encarta® Encyclopedia 2002. © 1993-2001 Microsoft Corporation. All rights reserved.
