The importance of information systems

The immenseness of entropy outlines1. executive director SummaryIn short letter world thither is no substitute for right instruction at right sequence. It is evident that in last couple of decades attempts has been made to prove strategys which make noesis such(prenominal) precise, readily open and easily sociable by dint ofout the disposal. The development and use of entropy governing bodys is a modern geld which is primarily concerned with the collection, demonstrate and dissimilation of useful nurture that directs an organisation for better planning, better last do and ultimately the better results. education systems and development focus is a vast subject. In order to argue the importance of instruction systems for an brass, the fundamental concepts c argon what is entropy, how it notify be managed moldiness be ac fellowshipd. In this essay there impart be shortened introductions of these fundamental concepts and consequently there willing be a model study of Volvos experience solicitude placement, the VPS which highlight the importance of information system and information attention in an organization. Furthermore, it is not always without a rent to adopt and appreciate a new concept and information systems atomic number 18 no different. there are some issues and problems in installing and victimization such systems which again vary one organisation to an opposite. This essay will withal touch upon those difficulties as well.2. The concept of information in natural compositionThe world information has different usage in different contexts only in organisational context it becomes more complex and difficult to comprehend. Zorkoczy (1981) defines information as the meaning that a human expresses by, or extracts from, representations of facts and ideas, by kernel of the known conventions of the representations used. On the other hand in organizational context, Stonecash (1981) defines information by stating that information is simply symbols ( entropy, text, images, voices, etc.) that convey meaning by their relative ordering, timing, shape, context, etc. information is the raw material for making decisions for creating fellowship and fuelling the modern organization. In organizational context, information becomes more like a basic resource similar to men, material and money. learning is the stuffing agent that holds an organization together. On the contrary, since it is intangible, information is sort of different for corporal resources and is often difficult to interpret and utilize in efficiently in order to achieve desirable outcomes from the oragnisation. Nevertheless, it is an integral part of organization and should be properly managed to achieve goals and objectives of the organization (W.B. Adeoti-Adekeye, 1997). Hence, it is importance to acknowledge the importance of information in the organizational performance.3. cultivation anxiety in OrganizationsMany scholars deplete recognized the fact that right information and its flow with in the organization chiffonier drastically improve the performance and achieve stipulated objectives with ease. But at the resembling magazine it is important to note that there is no come iny of having information which is not relevant to the organisaton. This is the point where information care comes in to play. The prime objective of information oversight is to make relevant information readily available for the organisation in precise and comprehensible format. Langemo,( 1980) has delimitate Information management as the organization-wide capability of creating, maintaining, retrieving and making immediately available the right information, in the right place, at the right time, in work force of the right people, at the lowest cost, in the best media, for use in decision making. Also Best (1988) defines information management as the economic, efficient and effective co-ordination of the doing, contr ol, storage and retrieval and dissemination of information from external and privileged sources, in order to improve the performance of the organization.4. The concept of Information clays ever since its invention, computers are fair integral part of humans and humans are becoming more and more dependent on the services offered by them. In words of W.B Adeoti-Adekeye (1997)the advancements in computer technology have escalated mans relish to have computer sanctionance in solving daily chores and more complex problems problems which were considered solely in the domain of mans intuitive and judgmental processes, peculiarly in organizations, a few years ago. Therefore, information systems are becoming area of interest in progressive and dynamic organizations. The need to obtain access conveniently, quickly and economically makes it imperative to devise procedures for the creation, management and consumption of entropybases in organizations. Duff and Assad (1980), has defined the information system as a collection of people, procedures, a base of data and (sometimes) hardware and software that collects, processes, stores and communicates data for transaction processing at operational level and information to have a bun in the oven Management decision making. In general scathe, Information Systems can be defined as a set of interrelated components which accept data or information (meaningful data) as a raw material store and then process it to succumbs information as a harvest-feast to assist and support in decision making and controlling activities of the organization. The Information System contains information intimately the organization and its border environment as well. The surrounding environment includes customers, supplies, competitors and other stakeholders of the organization. The basic three activities input, processing and output generate the meaningful information that organization need. There is another essential element of system kn own as feedback. It is output returned to appropriate authorities in the organization to evaluate input (Laudon and Laudon 2006 9th Ed.). It can be represented in figure as follows finished one or more revolution processes It comprises the following functional elements which relate to the organization and its environment5. Importance of Information System in OrganizationsManagers must have relevant information that increases their knowledge of ingrained processes and external commerce environment. This knowledge narrows the degree of uncertainty and makes handlerial decisions more rational and practical. Without relevant information most of the decisions made by managers will be like trial and errors, which in turns decrease the aptitude and profitability and increase the uncertainty with in the organization. The main benefits if an information system can be discussed as follows1 Economic Importance tear down though the cost of installation and maintenance of an information s ystem quite high (depends upon kind of system) in the beginning, but in repayable line of note the costs drops and appears fair deal when compared to kinds of benefits enjoyed with the inspection and repair of it. Also with the passage of time cost of information systems tends to decrease, whereas, costs of its substitutes (for instance labour) has been historically tends to rise (Laudon, 1990). Furthermore, information systems use networks, which help an organization to reduce the transaction costs, by making it worth plot of land for organization to contract external suppliers instead of using internal resources. For instance, the Chrysler Corporation reduces costs by obtaining more than 70% of its parts from other supplier by using computer links ( Laudon and Laudon, 9th Ed. ).2. Information Systems correct PerformanceInformation Systems are designed to improve the overall efficacy and effectiveness of a process. The information systems speed up the process and reduce the t ime by removing non-value adding steps in the operation. For instance, Citibank substantial the Automatic narrator elevator cars and Bank Debit Cards in 1977( Laudon and Laudon 9th Ed.). It made financial transactions easy and was a huge success. Further, banks continued to innovate and these days with the help of reliable and secure information systems from TEMENOS, Infosys, Oracle etc, most of the customer can do majority of transaction from their home computer or however from mobile telephone. Moreover, information systems provide real time information which reduces the mount of errors, hence, increases the quality of the output of the process.3. Importance in Decision Making Information Systems provides the tools for managers enabling them to monitor, plan and forecast with more precision and speed then ever before. They also enable managers to respond more rapidly and alter swiftly to the fast changing patronage environment. The Decision Support Systems can significantl y improve results both on quantitative and qualitative fronts. For instance, there are around 142 million employees working in United States generating $12.2 meg of Gross Domestic Products. If the decision making quality of these employees could be better by just 1% in a year the gross domestic product force be expand substantially. This implies for any organization the ability of manager or employees to make right decision at right time with the help of right information can have extraordinary business value ( Laudon and Laudon 9th Ed.).4. Organizational Behavior ChangeBehavioral researches illustrate that information systems facilitate flattening of hierarchies by broadening the statistical distribution of information to empower begin-level employees. It pushes the decision making rights to the lower level in the organization as the lower level employees receives the information they need to make decisions eliminating the need of middle managers(Laudon and Laudon 9th Ed.). Thi s also leads to the reduction is the administrative costs of the organisation. For sample, after installing ERP system Knust-SBO precision Machining1 of Texas, reduced the administrative staff by 50% and at the same time improved the accuracy of on -time deliveries from56.5% to 95%.6. Case teaching IllustrationThe efficient performance of an organization is dependent very much on the performance of the internal resources of organization and their synchronization with external environment. To illustrate the use and importance of a management information system in organizational performance the following example of Volvo from Managing friendship in MNCs-The casing of the knowledge management initiative in the Volvo multitude by Sona Gevorgyan and Boban Ivanovski (2009) will demonstrate that how Volvo achieved superior performances by deploying their Knowledge management system.6.1 Volvo free radical and Knowledge ManagementThe Volvo Group is one of the leaders in its industry w ith production facilities in 19 and sales in more than 180 countries. In 2008 it employed more than 90,000 employees worldwide majority located in Sweden, France, USA, Japan, Brazil, China, and southerly Korea. The industry in which Volvo Group puzzle outs is highly technology driven and knowledge intensive. Its product range comprises construction equipment, trucks and buses, aircraft engine components, drive system for leatherneck and industrial applications. Since it operates globally the Group is comprised of numerous subsidiaries, known as product related disdain Areas (BA) and supporting Business Units (BU). The major function of Business area is to manufactures products, whereas Business Units are responsible for procurement, product plannings and financial aspects of the business. As the Group continued to grow, it recognized that the diversity that the subsidiaries represent could serve as opportunity to utilize all the knowledge within the Volvo Group. The group hold need of the global Knowledge Management System which could help in eliminating make off of resources in terms of recreating knowledge in one subsidiary, while already possessing it in another. Furthermore, such initiative could potentially serve as means of discovering new synergies in the Group that may lead to static and efficient operation of the Groups activities. Hence, the Volvo Production System Academy was launched in 2008, aiming to endeavor and support such a common group Knowledge Management initiative ( Gevorgyan Ivanovski ,2009). Knowledge Management Systems are designed to store and process the knowledge available in organizations (Wickramasinghe, 2003), and simultaneously support contextualized application of that knowledge (Maier, 2004). Workers are meant to use this technology in manduction information about past experiences and making sense of this information, while performing their tasks (Wickramasinghe, 2003). Volvo Production System Academy (VPSA) is the centre for research, development and innovation in the Volvo Group. The Academy is meant to represents a central research and development unit which provides the fundamentals for the KM initiatives. It developed the Knowledge Management System for the Group, the Volvo Production System. The assumption is that operational excellence, sustainable profitability and customer satisfaction is more likely to achieve if the workers operate in accordance with the VPS guidelines. The VPS model is set forth in detail through internal documents known as Reference Material, stored in central database and provided through the VPSA Intranet portal. The database and the Intranet portal on which the information from the database is available, represents the core of the KMS provided by VPSA. The good example of VPS model is an essential part of the feedback and learning aspect of the model. It is represents a optical illustration of exceptional execution of a specific module described in the VPS mod el, this acts as a communication tool to encourage employees to buy up the desirable behavior. Good examples from various factories are stored in the central database in addition to the principles, and available on the Intranet portal. The good examples are either submitted by the factories and then quality-proofed by VPSA, or spotted in the assessments that VPSA conducts. By sharing them through the Intranet portal, good examples are meant to serve factories from different subsidiaries to locally implement the VPS modules by exploiting mutual synergies and learning from each others knowledge and experiences.( Gevorgyan Ivanovski ,2009)DiscussionThe Knowledge Management Systems are one of the most complex information systems. The Volvo Group has realized that their product and services are not limited to physical resources but also on the intangible assets i.e. knowledge. Since it operates globally and most of its business unit are geographically, demographically and culturally d ispersed, therefore it was utterly important for the Group to synchronies its knowledge and make it available wherever and whenever it is needed to support the business processes and managerial decisions. The Group achieved it with the help of an information system, the Volvo Production System. However, installing an information system does not automatically result in success, unless continuous intricacy of all individual workers in processes is ensured. In this case workers have struggled initially to cope up with the compounds the system brought in, but the strong organizational assimilation motivated them to get involved in the process.Problems with Information SystemsThere might be different reasons, but despite of many success stories there are examples of great also-ran of implementing information systems in organizations. For instance (web resource1)Hershey Foods The preeminent chocolate manufacturer in United States accounted 19 % drop in earnings was caused by an inco mpetent SAP ERP installation that caused distribution rowdiness during one of its most profitable seasons.FoxMeyer Drug s The pharmaceutical distribution company was forced to declare bankruptcy after an unsuccessful ERP implementation.NASA -. The ERP system was not able to close year-end books on a Cal technical school contract which results in generation of inaccurate financial reports.Bang and Olufsen In 1999, the Danish Hi-Fi audio- video maker claimed that SAP systems has damaged carnal knowledge with its retailers It is often argued that most of the issues in ERP systems disasters were not technical but were in the main related to employee and organizational culture of the firm. Many of the failures can be attributed to pathetic managerial practice in the form of inadequate training (Pang 2001). The immunity to change from with in the organization, lack of high flexibility in terms of customization of information system and inadequate IS implementation strategy may be c onsidered as the major factors for such a drastic failure of the information systems in certain cases.ConclusionIt is important to note that information management and information systems are the means not the end of the process. Both are the powerful tools in the hand of management, which when deployed appropriately can bring salient change in the way an organization perform and achieve its objectives. hold utilization of information systems benefits both the organization and its employees and its stakeholders. But when misapplied, they can waste tremendous amounts of time, bm, and money. To accomplish successful information management and reduce the chances of failure in future, an information system must be designed and operated with due regard to organizational culture as well as technical factors. There should be an equal contribution from both the business management and the information professionals while designing and implementing a new information system. There is no dou bt that better exchange of thoughts between organizational management and information professionals has the potential to develop information systems which will entirely change the outlook how we run business today.ReferencesBest, D.P. (1988), The future of information management, planetary Journal of Information Management, Vol. 8 No. 1, March, pp. 13-24. Duff, W.M. and Asad, M.C. (1980), Information Management An Executive Approach, Oxford University Press, London, p. 243 Langemo, M. (1980), Records management/word processing a needed team effort, Records Management Quarterly, Vol. 14 No. 4, pp. 10-14. Maier, R. (2004). Knowledge management systems information and communication technologies for knowledge management. Zugl. Regensburg, Univ., Habil.-Schr., 2001. Pang , L. Managers Guide to Enterprise Resource Planning (ERP) Systems information Systems Control Journal, Volume 4, 2001 Sona Gevorgyan and Boban Ivanovski (2009) Managing Knowledge in MNCs-The case of the knowledge manag ement initiative in the Volvo Group Stonecash, J.C. (1981), The IRM showdown, Infosystem, Vol. 28 No. 10, pp. 42-8. W.B. Adeoti-Adekeye (1997) The importance of management information systems Library Review, Vol. 46 No. 5, page 318-327. MCB University Press, 0024-2535. Wickramasinghe, Nilmini (2003). Do We Practice What We Preach? Are KnowledgeManagement Systems in Practice Truly reflective of Knowledge Management Systems in Theory?. Business Process Management Journal, 9(3) 295-316. Zoikoczy, P. (1981), Information Technology An Introduction, Pitman, London, p. 157 1The New ERP System Halves the Administrative Staff, Modern Machine Shop, Feb2002, Vol. 74, p142