Introduction

An information system is an organized combination of people hardware, software,

communication networks, and data resources that collects, transforms and disseminates data
information in an organization. People rely on information systems to communicate with each
other, using a variety of physical devices, information processing instructions and procedures,
communication channels and stored data. In business, Information Systems not only facilitates
the basic processes or operations but also supports the decision making process of the
Management. Bottom line management or the value maximization which is an ultimate
objective of any business management precludes the effectiveness of the Information Systems
used by the business. The influence of Information systems and the technology implementation
can be measured by the motivation levels and the managerial scope for the key components of
Information system and the effective implementation (KCW Associates, 2006).
Todays internetworked information systems play a vital role in the success of an
enterprise. Information technology has changed the way business is carried on today. Customer
service, operations, product and marketing strategies, and distribution are heavily, sometimes
even entirely, dependent on the internet and information technology. For example, the internet
and intranets, and external inter-organizational networks, called extranets can provide the
information infrastructure that a business needs, to make it more efficient and effective.
Use of Information Systems in Business
Information Systems perform three vital roles in any type of organization. They support
business operations, guide managerial decision making, and provide strategic and competitive
advantage to the organization.
Depending on their use in a business, information systems can be classified as
Transaction Processing System (TPS), Management Information System (MIS), Decision
Support System (DSS), and Executive Information System (EIS). Artificial Intelligence (AI) is
also used by many to improve precision in production/operation or decision-making. Apart from
the above, there are still many different kinds of Information Systems. They are External
Information Systems, Continuing Information Systems (CIS), Systematic Information Systems,
and Social Information Systems are some of the information systems that are currently in use.
They are discussed in detail in the following paragraphs (ICFAI Center for Management
Research, 2003).
Decision Support System
In their book, The New Science of Management, Allen Newell and Herbert A. Simon
devised a model of human problem solving that compares human information processing with
computer information processing (ICFAI Center for Management Research, 2003)g. Simons
model of decision-making considers three phases namely Intelligence, Design and Choice
(Zaheer, 2001; Sreshtha, 2006). In the Intelligence Phase, various alternatives are identified or
developed. The optimum alternative is chosen in the choice phase. Decision support systems
are widely used in business organizations to provide support in activities such as financial
planning, forecasting, risk assessment, etc (Tuomi, 1999) (Rumizen, 2002). To arrive at a
rational solution, a DSS may make use of inquiry, analysis, models or accounting systems.
DSS are extremely useful when multifaceted manipulations and various analysis
techniques need to be utilized to arrive at a solution. There are essentially two types of decisions
namely programmable decisions and nonprogrammable decisions. Programmable decisions
are those that are based on predetermined rules and can be computerized. Computerization is
possible since the inputs, process methodology, analysis and choice of decisions are all
predetermined. Nonprogrammable decisions are those that do not follow any fixed rules but are
based on the circumstances. However, it is very important to understand that the scope of DSS
is limited to the Intelligence and Design phase and does not include the actual decision making
in the choice (ICFAI Center for Management Research, 2003) (Avegerou, 2002).
Using DSS
DSS are very useful in analytical modeling. The four basic types of analytical modeling
supported by DSS are:
What If Analysis
Sensitivity Analysis
Goal-seeking Analysis
Optimization Analysis
What If Analysis
This is a process improvement technique that is use to evaluate the impact of changing
parameters in a model. For example, what will be the impact on the contribution profit if the
cost of the product is reduced by 5%?
End users can make use of what-if analysis to make changes in variable or relationship
amongst variables and observe the changes. What if analysis is used for analyzing the various
possibilities and deriving an appropriate strategy for each situation?
Sensitivity Analysis
This is a technique used to measure the effect of changes in one parameter on the
outcome of a model. For instance, if the cost of raw material is changed, bow would it affect the
feasibility of the project. Sensitivity analysis can be considered as a type of what-if analysis in
which the effect of repeated change in a single variable is examined. This type of analysis is
useful when the user is not sure about the value of a key variable. There are few DSS packages
that automatically make minor changes to variables repeatedly (ICFAI Center for Management
Research, 2003).
Goal seeking Analysis
This involves changing a set of variables in order to reach an end result in the model.
Example: To achieve the sales target of Rs. 1 billion, how the advertising, promotion and other
marketing expenses need to be changed. This technique is the reverse of What-if analysis. In
this method, the target is fixed and changes are made to the related variable so that the target is
achieved (ICFAI Center for Management Research, 2003).
Optimization Analysis
This method involves finding out the optimal value of a model by changing certain
variables keeping the given constraints in mind. This process is actually a complex extension of
goal seeking analysis.
In this method, the target is not fixed. Rather, the target needs to be arrived at, after
taking into consideration the constraints involved in achieving the targets. In this analysis, one
or more variables are changed after taking into account the constraints until the best alternative is
found. Optimization analysis would require social purpose software and the techniques like
linear programming or DSS generators.
Use of DSS in various fields
Added Value functions
Information and communication technology (ICT) enables the collection, analysis and
evaluation of data and the transfer of information from one point to another. Information flows
in warehouses and supply chains are as fundamental as the physical flows of goods and
materials. Such information flows occur not only internally in companies, but also between
external supplies, contractors and customers (Emett, 2005).
The latest technologies have brought about revolutionary changes in materials
management especially in warehousing. Technologies such as Robots and Automated Storage
and Retrieval Systems (AS/RS) make execution of materials convenient, easy and economical.
Robots are re-programmable and multi-functional manipulators designed to move materials,
parts, tools and other specialized devices through variable programmed motions to perform a
variety of tasks. They are versatile, computer controlled machines programmed to perform
various tasks independently without any kind of human support (Russell Allgor, 2004).
The AS/RS systems are computer-controlled and mechanically-operated materials
handling systems. The functioning of these systems is similar to functioning of physically
operated robots, but these systems can also perform complex operations of loading and
unloading the inventory with their dozens of automated pallet movers ((ICMR), 2003). Storage
and retrieval activities were the specific storing and order picking functions of inventory items.
Now, AS/RS refers to the execution of inventory stocking and picking functions, and automated
material handling functions, which are integrated and controlled by a computer.
ICT has brought, and will continue to bring, improvements wherever the following are
needed:
Immediate access to information
Cost Savings
Competitive Advantage
Accuracy
Integration and Coordination
Lead time reductions
Improved control
Better Service (Emett, 2005)
Three specific technologies namely Radio Frequency Identification Devices (RFID), Bar
Coding and Interactive Voice Response (IVR) have metamorphed the warehousing processes
forever.
RFID Technology - Active RFID technologies literally make the inventory scream out here I
am to the warehouse managers of their physical location even in a warehouse having tens of
thousands of items. Active RFID cards, when inserted into stock bins accurately maintain stock
ledger, exact physical location as well as transactions that can be integrated with any ERP
solutions today. The RFID cards are credit card sized plastic cards with embedded battery
powered transmitters that help pin point the exact location to the RFID readers (Weismann,
2003).
Bar Coding Bar Coding has greatly enhanced fast and accurate tracking of material across a
specific point. This technology also helps integration with inventory management systems as
well as popular ERPs. In a typical bar coding application, universal barcodes (bar codes can be
allotted universally for a specific product) quickly identify the product necessitating only the
entry of quantity; today technologies are available for rapid bar code reading which eliminates
even this necessity (Weismann, 2003).
Both these technologies together can be integrated both into backward as well as forward
supply chains at any manufacturing plant, which will enable quicker response times, lesser
inventory costs and Just-in-time (JIT) inventories.
IVR IVR technologies today enable global one-point access and uniform service levels by
allowing the users to go through structured voice based instructions. A typical end-user would
not need anything more complicated than a telephone, while at the application end would require
fairly intense and high-end technology. When an IVR is used in an inventory system, it allows
any authorized person call-in to the IVR and realizes the exact status of the ordered transaction.
IVR probably is a least complicated technology while RFID would be the most complicated from
and end-user perspective. However, all the three technologies used together or individually can
change the way inventories are managed in an organization of any kind and size.
ESCM Electronic Supply Chain Management is the new trend that is going on in the IT
industry (Chopra, 1992). The major advantages of the above mentioned ESCM is that it yields in
timely order-processing, improved inventory tracking management, improved accuracy in order
fulfillment and support for JIT, etc.
By integrating different supply chain levels, the IT organizations today can realize huge
cost reductions. The ESCM function in the organization results in an extended organization
that encapsulates the activities of the suppliers. As a result, inventory levels are replenished as
and when required. In todays business arena, suppliers are electronically connected and get real
time information about the inventory level. The industries can reduce the procurement costs
significantly by providing its suppliers instant access to information. Since the supplier can
access the information regarding inventory and procurement automatically, the purchasing
department can reduce its involvement in minor transactions. Their focus can now be on higher
value activities like vendor selection, sourcing, and managing relationships with
vendors/suppliers.
ERP - ERP encapsulates the entire spectrum of business processes, including sales management,
production management, accounting, human resources, maintenance management, quality
management etc ((ICMR), 2003).
ERP uses a single database in which information from different functional domains is
stored. As a result, the information needs of different entities can be met from a single location.
This integrated approach can, for instance, allow the production department located in one
geographical area to send financial information to the head office and the marketing information
of one location can be accessed by the production department at another location, so that the
market patterns can be identified and the appropriate responses can be designed. Proper
implementation of ERP ensures that the management has relevant and timely information at its
disposal for effective decision-making. The effectiveness of the ERP system in business can be
judged by the fact that in spite of its high cost of implementation, many organizations have
adopted ERP systems (Chopra, 1992). Transformation has taken place across the various
verticals of industry sectors internationally (Venters, 2008). A due connotation has to be given to
the aspect of technology and its advancement for the role played by the same, both externally
and internally in the process of change management. It is only with the use of advanced
technology that the changes taking place in the business scenario have been acknowledged by
both consumers and the companies.
Web casting is a very good example of MIS advancement that has taken place in the
recent past. It is a form of broadcasting that makes use of internet technologies. The
information is transmitted to the users based on individual requirements (Smith, 2005). When a
user signs up webcasting service, he gives his approval for receiving and being updated with
certain type of information on a periodic manner. The technology of Web Casting helps in
sending such information to the users who are in need of the same at regular intervals.
Interactive Data Exchange is one another such innovation Information Systems. This
includes the set of applications that is usually referred to as query-response. These messages
are based on forms. A form is filled out and the information (query) is sent to a specific database
server. The reply (response) is received back into the same or a different form depending upon
the application. Interactive Data Exchange also includes push messaging. Push messaging
occurs when the server initiates a connection and pushes messages to a user in the field
(Nettech Systems). Examples of interactive data exchange are package delivery and racking,
dispatch applications and consumers purchasing movie tickets. A few other similar examples of
this technology are sales force automation applications like order entry and order status.
Online Education is another example which makes use of MIS. One technology that has
changed the delivery of education is possibly internet. The advent and growth of information
technology, internet, and high penetration of the internet globally has actually changed the ways
and means of delivering distance education dramatically. Gone are the days when study material
would be shipped and students eagerly wait to receive the study material. Gone are the days of
paper and pencil testing models (Cyber Media Publications, 2008). Gone are the days of
extensive travel to attend a single class room session (Keerti, 2009) (Avegerou, 2002; Gulati R,
2000). The distance education model, on adopting robust information technology systems has
removed constraints of boundaries and time for delivery of education. Today education is
available online 24 hours a day. Individuals may at their convenience choose to study. Todays
education allows so much flexibility where an individual may even stop and take a break even in
the middle of a test. Study material design for online education has become a specialized area in
the field of education. Today there are specialists that exist to design courses for online studies.
Number of teach management systems have been developed and delivered.
Conclusion
With rapid development of technology, almost on a daily basis, information systems and
technology has already changed the way we live, work and play. Over the next decade or so,
more changes are likely to occur much more rapidly, than what is being witnessed over the last
few decades. These changes are expected to make living, working and playing much more
comfortable and much more luxurious. Every company needs a constant research on the changes
and the uptrend for the sector and has to prepare itself for the process. Streamlining of process
can be better managed by implementing right technology and automation process. Automation
software can help the companies in fixing the productivity problems, cost effectiveness and
qualitative service to the customers.
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