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Defining IS 4 Primary Functions in Business

IS, IT, business functions, business information system function, information systems, information technology

You can define business by four primary functions: 1) Marketing and Sales, 2) Production 3) Accounting and Finance and 4) Human Resources (HR). It is all about finding ways of supporting your business operations and management.

Marketing and Sales IS

Information systems go towards planning, promoting and selling the products or services. They support decision-making through:

  • Planning
  • Price
  • Place
  • Promotion

This is the entire marketing IS where it has to draw on many sources of results to find information. Completing marketing research helps focus on finding answers supporting decision-making. Marketing subsystems help support decision-making. The decisions are then integrated with the sales forecast and marketing plan, comparing sales results.

The Subsystems

  • Product subsystem – The planning of introductions of new products
  • Place subsystem – Making the product available to the customer at the right place and time
  • Promotion subsystem – Supports both personal selling and advertising
  • Price subsystem – Contain industry prices and help set up pricing goals
  • Sales forecasting – Forecasting and developing a full marketing plan comes with planned marketing and outstanding orders

Components for information systems for accounting include:

  • Accounts receivable
  • Accounts payable
  • Payroll records
  • Inventory control
  • General ledgers

They rely heavily on online databases and reports custom-built. Essential functions of financial systems are:

  • Financial forecasting and planning – Predicting funds coming into and out of your company long-term. Using cash-flow models help find needs of funds locations along with where they’re coming from.
  • Financial control – Budgeting and Return on Investment (ROI)
  • Funds management – Managing liquid assets for high yields with lowest degree of loss risk
  • Internal auditing – Auditing reviews and shows independent appraisals of your accounting, financial, and operational procedures.
  • Human Resources IS support through providing information to the HR office. It has grown immensely over the years to keep up with needs to adapt to new laws and regulations.

Giving access to stakeholders including:

  • Employees of the HR department
  • Personnel of your company wishing to see their records
  • Workers wishing to see open positions and benefit plans
  • People taking computer training classes for work and completing evaluations
  • Managers can rate their subordinates and make decisions
  • Executives creating tactical and strategic planning

Other databases include:

  • Applicant databases
  • Position inventory
  • Skills inventory
  • Benefits databases
  • External databases

Conclusion

As we can see, all these different information systems have to work together smoothly to give superior results for your company. If not, it is bound to disappoint your customers. They expect timely delivery of products and services, perform QA to their own standards and flexible credit terms to name a few. Information systems offer support integrating business processes, cutting across functional lines to do it. In turn it makes everyone happy, from business partners to customers and suppliers.

 

 

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10 ERP Upgrade Mistakes to Avoid

ERP, strategic planning, business, upgrade, IT, information technology, information systems, competitive advantage

What Is ERP?

Enterprise Resource Planning (ERP) has to be considered part of the plan when upgrading your system. In this information technology (IT) has to be combined with the business process to help bring a competitive advantage to others in the same industry. It is anything from reading an e-mail to updating records of procedures. An ERP is an application that uses a centralized database to run the entire company. This medium allows data from one department for viewing in other branches of the same company. It can be bought either as modules for different parts of the agency, or a subset. ERP systems are there to enforce processes that your business will adopt.

Upgrade Mistakes

  1. Not explaining what new systems means to users before starting the project – If the users of the upgrades don’t know why it’s happening and are in agreement, the update will fail.
  2. Not load testing systems with scripts and end users – How do you know if your file loads are typical? Load testing with scripts and users will complete real tests in this area to make sure that the process will work or not.
  3. Not performing tests of the new process to see if it works or not – Will everything work as planned?
  4. Not taking change management or testing sincerely – Know everything you need to know about the change and regression tests beforehand, so you aren’t surprised by “new opportunities.”
  5. Assigning internal personnel as project managers – Get a consultant project manager as they will focus on the upgrade only. They’ll catch the mistakes made and keep things on schedule and budget.
  6. Not telling others of changes before they happen – End users don’t like change so make sure to communicate before so they aren’t caught off guard.
  7. Giving classroom training only – Allow for video training that the users can find and use if they come across a problem they can’t fix. Create a Knowledge area that they can access to see before elevating.
  8. Not moving components to open business standards – This speeds up future upgrades that will happen. Try to change reports and interfaces to open business standards. It will help a lot in the future, and possibly save money with more completed upgrades.
  9. Not archiving before upgrading and keeping up security during – Archiving before upgrading will save you time and money. It speeds up queries on large tables, and table conversions as they are will run quicker. Security wise, upgrades are to be need-to-know only. There’s no use in upgrading if spies find a way to get the information out to your competitors.
  10. Assuming internal tech personnel will pick up years of experience in weeks – Keep the consultants around for a while after the upgrade is complete. Enhancements aren’t easy to learn, and someone has to be there who knows how to run the system. Or at least until the first workers understand the system as well.

Impact of IT on Business

IT has a significant impact on how companies design, build and support their business processes. Information systems have a considerable effect on how these methods work. Agencies improve effectiveness and quality of products and services through empowering their employees. Something to consider.

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4 Dimensions of Strategic Information Systems Planning

strategic information systems planning, SISP, IT, Improvements, upgrades, business intelligence

Strategic information systems planning (SISP) is a very important issue that has to be considered when upgrading. Information technology (IT) use along with proper planning can help increase business success. SISP is used as it’s considered a great tool to support the company. It makes sure that IT activities go along with what the company does and needs.

What is Strategic Information Systems Planning?

SISP improves organization performance however upper management wants to focus. The aim is to achieve maximum benefits from resources while reducing risks at the same time. All resources work efficiently, effectively and competitively together to make the company stronger and more adapt. Especially now as IT is an important part of any company. Strategic Information Systems Planning is intended for technology that’s used at the company level. It needs to mesh with what the needs and strategies are of said agency.

Objectives include:

  • Align IT with business
  • Gain competitive advantage,
  • ID new and higher payback applications
  • Increase top management commitment
  • Improve communication with users
  • Forecast IT resource requirements
  • Allocating IT resources
  • Develop information architecture
  • Increase visibility of IT

4 Dimensions of SISP

SISP helps the above mentioned by addressing future needs for IT/IS resources with business plans. There are four dimensions included to make sure everything is included.

  1. Alignment
  2. Analysis
  3. Cooperation
  4. Capability

The first three are considered goals while the fourth is considered improvement over time.
SISP methodologies include gathering information and making plans comprised of one or more techniques. The techniques can be viewed as abstract systems.  They change organization input into a strategic plan for output. Some of the more popular planning techniques are:

  • Looking at Stages of Growth and Critical Success Factors – Here flexibility of needs can be used as a measurement tool. This methodology needs support of others.  CSF alone makes information requirements difficult to reach.
  • Competitive Forces Model and Value Chain Analysis – Michael Porter’s model analyzing threats of new entrants and bargaining power of buyers and suppliers. Also reviewed are threats of substitutes and rivalry of competitors. It’s used to get products and services to buyers and servicing.  It also finds primary and support activities that can add value to the product or service.
  • Scenario Planning and SWOT Analysis – What will the future bring? Actions to take if future is going in a direction not wanted.

Criteria of Choosing

The criteria of choosing methodologies include availability of resources, internal policies and preferred suppliers to name a few. It would be the company’s choice as to what is more important to them.  Which they would want to improve the most?

SISP leads to good planning. This in turn helps companies stay ahead in competitive environments. You have to make sure that top management stays aware of best processes for SISP. They need to stay committed and involved in order for it to be considered a success.

There is no best way to implement SISP. It’s up to the companies which way they want to focus what they want to improve. The success would be applied to how well they used methodologies in their planning process. Were success and failure factors applied while planning and implementing the changes? These are the questions that need to be answered in order for Strategic Information Systems Planning to be considered a success.

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4 Elements of Information Systems

customer, system, business, information, process

The use of information technology (IT) has dramatically increased in the business world in the past decade.  It has been acknowledged that information systems (IS) is a very important step to compete and grow.  There are four elements of IS that new systems need to work correctly.

4 Elements

  1. Customers – The main function of IS is to be able to better support the end user or customer. This is both internal and external.  Externally it could be an online shopper who wants to buy from a website.  Internal customers would be something like employees or one department in a company who needs supplies from another department.  IS was developed in order to better support external customers.  Also something to focus on is flexibility supporting internal customers.
  2. Products and Services – This deals in data transformation. The IS has to work well in any industry.  It helps prepare many types of services and/or products based on design.  Customer expectations have to be satisfied in order to be considered successful.
  3. Business Processes – Improvements to processes directly influence performance. It provides relevant information to the company.  This improves said company’s processes by adding or removing steps as needed.
  4. Communication Technology and Computers – This is the central piece of the information system. They have to be able to deliver efficient business processes and make the customers happy.  This is done through either delivery of product or services rendered.  Technology helps to improve communication through email and chat internally.  Externally it provides a good website that people will enjoy visiting.  Information can be accessed much more quickly which increases the competitive edge.

Why Use IS?

Information systems helps improve relations between customers and the business, or business to business relationships.  The question is, which type of system does your company need?  A lot of questions to consider before making the leap to upgrading

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Enterprise Agility, Digital Options and IT

enterprise agility, digital options, measurement, information technology, IT,

Define Enterprise Agility

To be able to operate and be strategic, there are tons of factors to consider.  Hyper-competition, higher demands from customers, advances in tech and changes in regulations have to be considered when upgrading.  There’s something called enterprise agility.  It’s comprised of two things. Being able to sense what is going on and respond to it.  The timelier the response, the more likely the company will succeed in difficult times.  Dynamic capabilities are included here.  One has to consider how to build the new system that will respond to the new environment.  In order to keep up with competition capabilities have to be able to adapt to new changes.

Market orientation deals with market intelligence focusing on new and current customer needs.  The information gathered will be spread across all departments so there can be company-wide responsiveness to changes.  Absorptive capacity deals with how well the company assimilates, transforms and uses the knowledge gathered.  Strategic flexibility is how well the agency manages both economic and political risks to market threats.  It also looks for future opportunities.  The flexibility has to include both reactive and proactive approaches to problems.  Organizations need to be watchful for and respond to competitors’ actions.  They need to look at consumer preferences.  There has to be a focus on economic shifts.  The agency needs to look out for  changes in regulations and advances in technology too.

The Role of IT

The role information technology (IT) plays in this is very important.  Responses are completed through direct and indirect means of digital options.  Through direct means IT can anticipate and sense changes dealing with businesses.  IT systems help as sheer volume of information processed goes further than can be handled otherwise.  Indirect means are more pronounced though.  This is where product development, manufacturing and supply chains add to performance of the organization.

Digital options can be considered indirect too due to them being work processes and knowledge systems.  Knowledge reach is the comprehension and accessibility of codified knowledge available.  If the system is built correctly it can help companies to gather and use the knowledge gained.  Knowledge richness is when IT gives out high-quality information in a timely manner.  IT also reviews real-time pattern recognition and monitors data.  It helps create strategic scenarios assisting strategic decision making.  Process reach is when IT integrates customers, suppliers and partners internally.  The richness of these processes are improved by quicker timeliness of delivery.  They become more accurate and relevant.

Conclusion

Depending on how the new systems are deployed and managed, IT could hurt as well as help businesses.  The older the technology being used means responses could be limited by the range available.  Everything would have to be updated, not just programming.  Systems might restrict the ability to retrieve and interpret data being gathered for analyzing.  Or processes could be incompatible with new systems.  This would mean that they would have to be upgraded.  It’s up to the firm as to how well IT is going to work for them if at all.  Agility is the ability to respond quickly to change that comes up.  The company has to understand the updates in order to create and implement them correctly.  If not, they could fall behind from their competition even more.

 

 

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Why All the Different Information Systems?

IS, DSS, EIS, TPS, MIS, information systems, organizations, senior management, junior management, executives, executive decisions, senior management decisions, junior management decisions,

This all started back in the day.  Someone would need a system made specifically for them to handle one problem.  Soon enough that it was discovered that different problems needed similar solutions, but not always in the same manner of getting them.  This is where defining of the information systems began and why it is still needed.   When the company in question decides that they need to upgrade, they have to go through a process in order to find the right applications and hardware to handle their data.  Classification comes to play here, so that categorizing information can be completed correctly.  This will help to make the data one unit instead of many.

How Do You Identify Different Types of Systems?

There is no simple answer to the question.  Every company builds an information system (IS) that is tailored to their specific needs.  There are many different types of IS that are used in some manner or another.  Classifying IS relies on how tasks are performed and responsibilities are divided in the agency.  This becomes a pyramid model as most companies are hierarchical, so classes of IS are categorized following the hierarchy going down.

To compare different information systems:

  1. Transaction Processing Systems (TPS)– These are operational level systems.  They are used by shop floor workers and front line staff.  Data is gained here through tracking of low-level activities and basic transactions.  They function as simple data processing systems only.  This is the system that produces information for other systems to use.  They are used internally and externally, are used by operational personnel and supervisors and are focused on efficiency.  Examples:  Payroll, Order processing, Reservations, Payments and Funds Transfers.
  2. Management Information Systems (MIS) – Management level used by middle managers. This system ensures smooth running of the company for short to medium terms.  Information is given out highly structured and helps managers to evaluate the company’s performance through comparison of outputs.  MIS is built on data given by TPS.  They are based on internal information flow, support structured decisions, but are inflexible with not much analytical ability.  Examples:  Sales Management, Inventory control, Budgeting, Management Reporting, and Personnel.
  3. Decision Support Systems (DSS) – Knowledge based system used by senior managers. They analyze existing structured information, allowing managers to estimate any potential effects on decisions they are thinking of implementing.  These systems are interactive and are used to solve problems.  They can access databases, offer analytical tools, allow simulations to be completed, and can support exchanges of information in the company.  This system can alter and build solutions provided by MIS and TPS, that can create insights plus new information to go off on.  DSS helps to support badly or semi-structured decisions already being built, and have analytical and modeling capacities.  Examples:  Group Decision Support Systems (GDSS), Computer Supported Co-operative work (CSCW), Logistics, and Financial Planning.
  4. Executive Information Systems (EIS) – Strategic level used by executives and senior managers. These systems analyze environments that the company works in, find long-term trends, and plan courses of action.  The information gathered is gathered from internal and external sources, and is weakly structured.  These systems are designed to be able to be used directly by the executives and are user friendly with the ability to be customized to whomever is using it.  EIS gathers and presents data from the MIS or TPS so senior management and executives can see what is going on a make decisions based off what they see.  The people who use this want ease of use and being able to predict what will happen to the company in the future.  It has to be effective, flexible, and support unstructured decisions.  Examples:  There are none.  These systems are tailored to individual wants of the user, in other words are custom made.  There are off the shelf packages that can be customized too.

The Importance of Planning

There is no easy way to explain why there are so many different types of information systems.  Every company out there is not the same, or runs their agency in the same manner as others.  This is why modifications are made to the systems in order for them to work specifically with what said company uses and the data they keep.  Also every level of the agency uses different systems.  Not everyone has to have a need to know of everything going on.  It is better to keep it at the level that the systems are going to be used at the most.  This is why planning for upgrades is so important.  If the wrong system is used, or the wrong programs…

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Information Systems and Effective Management

systems, types systems used, evaluation of data, data, data gathering, data analysis, SISP, IT, IS, strategic information systems planning,

Information technology (IT) is a huge part of effective management that managers have to know.  They have to as they build and put into place new decisions every day.  The information systems (IS) are for the most part completely built from scratch.  The main purpose of strategic information systems planning (SISP) is to create implement new systems to use for the agency that the managers work for.  This is something that has to be worked from the top on down or it will never gain fruition.  There are complications to building these new systems, but if done correctly, it can be a godsend.

SISP Research and Implementation

Steven L. Alter did some research into which agencies have the most success with SISP through adapting to it correctly and optimally.  He has found that applications being created and used now are now built to support the managers who have to make decisions, instead of replacing them.  This is called decision support systems and are used to greatly improve managerial effectiveness.  The problem is that there is a restriction of knowledge as to what kinds of systems are used now.    This means that information systems are out there that the manager and their superiors have not built it themselves, so they don’t know what these systems do.  Don’t just focus on the technical aspect, focus on how the new system will work with the agency in question.

6 Types of Systems

The types of systems used are:

  1. Used to retrieve isolated data
  2. Uses mechanisms for ad hoc analysis of data
  3. Gathers aggregations specified beforehand in standard reports
  4. Can estimate consequences of all proposed decisions
  5. Can propose decisions based off of data gathered
  6. Can help to make strategic decisions based off of the data gathered

Examples of SISP Being Used

Some examples of how SISP is used are:

  • For retrieval of information only – shop floor IS
  • Retrieval and analysis – portfolio analysis system
  • Multiple data bases and analysis – sales IS
  • Eval of decisions using accounting models – source-and-application-of-funds budgeting
  • Eval of decisions using simulation models – marketing decision system
  • Proposing decisions – optimize raw materials usage
  • Making decisions – insurance renewal rate system

Questions to Ask Yourself

There is a huge range of approaches that can be taken here that would be helpful depending on what is needed for said company’s business model.  What do they do?  What needs to be fixed that they would bring this up?  What improvements are going to be implemented?  What do they want the company to strive towards?  What systems are they going to use in order to implement their changes?

Build the System

These are just some of the questions that have to be answered before the company goes forward.  If there’s no clear vision on what is going to be done SISP can be a complete failure instead of being a bonus.  Build small prototypes first of specific areas in order to find where the bugs are.  Then they can be fixed with little or any cost before the big implementation begins.  Just remember as the author points out, building an IS makes sense when it is clear that changes are needed in how decisions are made in the company.  That and everyone learns what the role is of computers are in their workplaces, and helps managers to make decisions dealing with administration and competitive strategies against other companies in their industry.

 

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Key Methods of SISP

strategic plan, IT, IS, SISP, strategic information systems plan, information systems, information technology, alignment

SISP can be defined as the process to determine the computer applications that help achieve business objectives. SISP can be considered a critical management tool as it focuses on strategic goals of organizations. It’s needed in order to move strategic directions of organizations.  Otherwise things could get sloppy really fast. SISP keeps things organized when change is being implemented in agencies, especially with information technology (IT).

Why Use Any Methodology of SISP

Different methodologies that SISP uses is:

1. Business System Planning
2. Strategic Systems Planning
3. Information Engineering
4. Information Quality Analysis
5. Business Information Analysis

Whichever changes are chosen by the agency will influence methodology of implementation. It may also be more prudent to choose a bunch of different ways to complete it. This will help to keep a balancing act together when planning for the future.

Why Use SISP At All?

It seems that top management still doesn’t fully support using SISP methods in order to better compile and implement new changes. Research suggests agencies cannot reach success if there isn’t proper alignment of business and information systems strategies. There has to be a good mesh in order for the changes to be fully implemented with no problems. If there is no fit, it’s unlikely that there will be a proper alignment between information technology (IT) and the agency in question.

The Different Methodologies

The different methodologies are:

1. Business planning
2. Competitive impact
3. Computer-based applications
4. Conceptual analysis
5. Information systems planning
6. Information technology resource planning
7. Methodology
8. Strategic alignment
9. Strategic information systems planning (SISP)
10. Strategic management
11. SISP approach
12. SISP methodology
13. Strategic management planning
14. Strategic planning

The Why of All This

These methods can all be switched around and used in different ways in order to better find solutions. It has to be done correctly or a large amount of money will be invested with no results. Benefits from investing in IT can only be seen when there is a strategic alignment between IT and strategic business strategies. IT resources have to be able to target areas in the agency that are considered the most critical to their success. This has to be done with upper management, to include CEOs, CIOs and managers. This is why I have suggested in past posts that upper management is critical in SISP. If they are not willing to change initiatives and programs, there will be no change in the agency.

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Why is SISP Important for Organizations to Use?

IT, IS, SISP, strategic information systems planning, planning, IT planning, IS planning, information technology, information systems, information systems planning, information technology planning
data, information, information technology, information systems, systems, IS, IT, SISP, strategic information systems planning, planning, IS planning, IT planning
The Relationship Between Data, Information and Intelligence

As time goes on there has been a recognition that information technology (IT) is becoming more and more integrated in businesses and organizations. But as it is, IT is only as successful as how aligned the information system (IS) development is within the company. This is where SISP comes into play. One issue is that there is raised pressure to leverage importance of SISP, and is a key issue to top management.

The Main Purpose

Basically SISP helps to find computer-based applications in order to better assist organizations. This helps them to use their business plans and reach business goals. So in this it helps to identify and use IS to reach both goals, objectives, and affect strategy. If it isn’t used correctly it instead can cause lost opportunities and waste money on resources not needed.

Strategic…How?

IS can be considered a strategic part of an organization. It helps conducting of daily activities, supports decision making, and works correctly in timely manners. There are four areas that IS can be considered a strength in:

1. It helps to gain competitive advantages
2. It helps increase productivity/performance
3. It enables new ways in management and organization
4. It assists to create new business opportunities

How Does SISP Work?

As to how the strategy works depends on how the customer wants the IS to be used in their organization. But SISP brings users and professionals together in order to help build a mutual understanding of what the information systems do and what problems can arise from them. This helps to create priorities in development. What the customer and professional does is rank systems in terms of efficiency, effectiveness and value to the company or organization that is considering switching systems.

The Five Phases of SISP

It can help build barriers against new entrants, change the competition, create new products to sell, and find cost-effective methods between they themselves as the customer with their suppliers. There are five phases in SISP:

1. The new business plan incorporating IT
2. Information systems assessment
3. Information systems vision
4. Information systems guidelines
5. New strategic initiatives

Four Objectives when Implementing

This is for both public and private organizations, as it is an incredibly important step in the entire process. SISP is only as good as how the organization implements and uses the ideas given. This in turn will decide how successful the company will be in the future. Always plan ahead as adopting IS creates a huge expense.
There are four objectives when implementing the new information systems:

1. Alignment
2. Analysis
3. Cooperation
4. Marked improvement of capabilities

Challenges

SISP improvements are considered a major challenge today for IS executives. Planning has to be successful in order to find out potential strategic impacts of IS. One thing to make sure of is, IS has to be planned and aligned with organization planning or it won’t work correctly. If it is aligned correctly then there will be fewer problems with the new hardware and software, along with a smooth and effective implementation of plans.

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What Exactly is Strategic Information Systems Planning (SISP)?

top-down, top-down flow, SISP, information systems, strategic information systems planning, information systems planning, planning

This is based off of Dr. Bozarth’s research on ERP implementation efforts in 2006. It’s based off of two arguments.

Arguments For…

1. A firm’s information systems investment needs to be aligned up to what the business strategy is.
2. Company’s best achieve IS-based alignment and/or competitive advantages through following proactive, formal and comprehensive actions. This includes development of a broad list of requirements that the organization has to build themselves.

Six Areas in Defining…

There are six areas that help to define a strong SISP process:

1. Comprehensiveness – This is where the said company tries to create and implement strategic decisions to the best of their abilities.

2. Formalization – This is where structure, techniques, procedures and policies are all written down. This is to help complete the planning process as a whole that will help to guide the company.

3. Focus – Targeting solutions that looks at both opportunities and possible threats to their system. Key is that it has to underscore control. This is done through budgeting, resource allocation and good management of assets.

4. Top-Down Flow – This is something that has to be adopted fully by management down to the staff in order to work.

5. Broad Participation – Participation has to be followed.  This makes sure that all areas of the company implement new changes due to decisions being made by top-level managers. All stakeholders and areas where the changes are being implemented have to know what’s going on.  When will the changes will take place?

6. High Consistency – When using SISP conduct numerous meetings.  The new process has to be periodically reassessed to make sure that the new strategies are being used.

Planning Ahead…

There needs to be a development of some kind of top-down plan in order to better connect upcoming information systems strategies to business needs. Classes will have to be conducted.  Orientation of employees to new steps will need to be done in order to familiarize them to new actions. It will also help with organizing, controlling and planning of the new IT functions.