A management information system (MIS) is an information system used for decision-making, and for the coordination, control, analysis, and visualization of information in an organization.

The study of the management information systems involves people, processes and technology in an organizational context.

In a corporate setting, the ultimate goal of the use of a management information system is to increase the value and profits of the business. This is done by providing managers with timely and appropriate information allowing them to make effective decisions within a shorter period of time. 

Contents

History

While it can be contested that the history of management information systems date as far back as companies using ledgers to keep track of accounting, the modern history of MIS can be divided into five eras originally identified by Kenneth C. Laudon and Jane Laudon in their seminal textbook Management Information Systems.

• First Era – Mainframe and minicomputer computing
• Second Era – Personal computers
• Third Era – Client/server networks
• Fourth Era – Enterprise computing
• Fifth Era – Cloud computing

The first era (mainframe and minicomputer computing) was ruled by IBM and their mainframe computers for which they supplied both the hardware and software. These computers would often take up whole rooms and require teams to run them. As technology advanced, these computers were able to handle greater capacities and therefore reduce their cost. Smaller, more affordable minicomputers allowed larger businesses to run their own computing centers in-house / on-site / on-premises.

The second era (personal computers) began in 1965 as microprocessors started to compete with mainframes and minicomputers and accelerated the process of decentralizing computing power from large data centers to smaller offices. In the late 1970s, minicomputer technology gave way to personal computers and relatively low-cost computers were becoming mass market commodities, allowing businesses to provide their employees access to computing power that ten years before would have cost tens of thousands of dollars. This proliferation of computers created a ready market for interconnecting networks and the popularization of the Internet. (The first microprocessor — a four-bit device intended for a programmable calculator — was introduced in 1971 and microprocessor-based systems were not readily available for several years. The MITS Altair 8800 was the first commonly known microprocessor-based system, followed closely by the Apple I and II. It is arguable that the microprocessor-based system did not make significant inroads into minicomputer use until 1979, when VisiCalc prompted record sales of the Apple II on which it ran. The IBM PC introduced in 1981 was more broadly palatable to business, but its limitations gated its ability to challenge minicomputer systems until perhaps the late 1980s to early 1990s.)

The third era (client/server networks) arose as technological complexity increased, costs decreased, and the end-user (now the ordinary employee) required a system to share information with other employees within an enterprise. Computers on a common network shared information on a server. This lets thousands and even millions of people access data simultaneously on networks referred to as Intranets.

The fourth era (enterprise computing) enabled by high speed networks, consolidated the original department specific software applications into integrated software platforms referred to as enterprise software. This new platform tied all aspects of the business enterprise together offering rich information access encompassing the complete management structure.

Terminology[edit]

The terms management information systems (MIS), information management systems (IMS), information system (IS) , enterprise resource planning (ERP), computer science, electrical computer engineering, and information technology management (IT) are often confused. MIS is a hierarchical subset of information systems. MIS are more organization-focused narrowing in on leveraging information technology to increase business value. Computer science is more software-focused dealing with the applications that may be used in MIS.  Electrical computer engineering is product-focused mainly dealing with the architecture behind computer systems. ERP software is a subset of MIS and IT management refers to the technical management of an IT department which may include MIS.

A career in MIS focuses on understanding and projecting the practical use of management information systems. It studies the interaction, organization and processes among technology, people and information to solve problems.

Management

While management information systems can be used by any and every level of management, the decision of which systems to implement generally falls upon the chief information officers (CIO) and chief technology officers (CTO). These officers are generally responsible for the overall technology strategy of an organization including evaluating how new technology can help their organization. They act as decision makers in the implementation process of new MIS.

Once decisions have been made, IT directors, including MIS directors, are in charge of the technical implementation of the system. They are also in charge of implementing the policies affecting the MIS (either new specific policies passed down by the CIOs or CTOs or policies that align the new systems with the organizations overall IT policy). It is also their role to ensure the availability of data and network services as well as the security of the data involved by coordinating IT activities.

Upon implementation, the assigned users will have the appropriate access to relevant information. It is important to note that not everyone inputting data into MIS need necessarily be management level. It is common practice to have inputs to MIS be inputted by non-managerial employees though they rarely have access to the reports and decision support platforms offered by these systems.

Types

The following are types of information systems used to create reports, extract data, and assist in the decision making processes of middle and operational level managers.

• Decision support systems (DSS) are computer program applications used by middle and higher management to compile information from a wide range of sources to support problem solving and decision making. A DSS is used mostly for semi-structured and unstructured decision problems.
• Executive information systems (EIS) is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting, human resources and operations.
• Marketing information systems are management Information Systems designed specifically for managing the marketing aspects of the business.
• Accounting information systems are focused accounting functions.
• Human resource management systems are used for personnel aspects.
• Office automation systems (OAS) support communication and productivity in the enterprise by automating workflow and eliminating bottlenecks. OAS may be implemented at any and all levels of management.
• School Information Management Systems (SIMS) cover school administration, often including teaching and learning materials.
• Enterprise resource planning (ERP) software facilitates the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.
• Local databases, can be small, simplified tools for managers and are considered to be a primal or base level version of a MIS.

Advantages and disadvantages

The following are some of the benefits that can be attained using MIS:

• Improve an organization’s operational efficiency, add value to existing products, engender innovation and new product development, and help managers make better decisions.
• Companies are able to identify their strengths and weaknesses due to the presence of revenue reports, employee performance records etc. Identifying these aspects can help a company improve its business processes and operations.
• Giving an overall picture of the company.
• Acting as a communication and planning tool.
• The availability of customer data and feedback can help the company to align its business processes according to the needs of its customers. The effective management of customer data can help the company to perform direct marketing and promotion activities.
• MIS can help a company gain a competitive advantage.
• MIS reports can help with decision-making as well as reduce downtime for actionable items.

Some of the disadvantages of MIS systems:

• Retrieval and dissemination are dependent on technology hardware and software.
• Potential for inaccurate information.

Enterprise applications

• Enterprise systems—also known as enterprise resource planning (ERP) systems—provide integrated software modules and a unified database that personnel use to plan, manage, and control core business processes across multiple locations. Modules of ERP systems may include finance, accounting, marketing, human resources, production, inventory management, and distribution.
• Supply chain management (SCM) systems enable more efficient management of the supply chain by integrating the links in a supply chain. This may include suppliers, manufacturers, wholesalers, retailers, and final customers.
• Customer relationship management (CRM) systems help businesses manage relationships with potential and current customers and business partners across marketing, sales, and service.
• Knowledge management system (KMS) helps organizations facilitate the collection, recording, organization, retrieval, and dissemination of knowledge. This may include documents, accounting records, unrecorded procedures, practices, and skills. Knowledge management (KM) as a system covers the process of knowledge creation and acquisition from internal processes and the external world. The collected knowledge is incorporated in organizational policies and procedures, and then disseminated to the stakeholders.

Management Information System, commonly referred to as MIS is a phrase consisting of three words: management, information and systems. Looking at these three words, it’s easy to define Management Information Systems as systems that provide information to management.

That is the simple definition of MIS that generally sums up what a Management Information System is, and what it should do. However, its role and impact on the smooth operation of a company can never be overemphasized. That is the reason why every successful company makes use of these systems in one way or another.

The reason why Management Information Systems are very important in the day to day operation of companies is because these systems work with people, organizations, technology and relationships among the people and organizations affecting the company.

This means that when properly implemented, Management Information Systems will help achieve a high level of efficiency in a company’s management operations.

This explains why MIS degrees are in high demand globally since the graduates have practical knowledge that will help them develop more efficient solutions thanks to their systems perspective of business processes developed in their training in Management Information Systems.

In the decade between 2014 and 2024, the US Bureau of Labor Statistics predicts that MIS professionals, and specifically database administrators, should expect the highest job growth when compared to all the other occupations.

In this guide, we explore 1) the history of Management Information Systems, 2) types of information systems, 3) components of Management Information Systems, 4) its role in business, 5) common advantages and disadvantages of using MIS, and 6) tips for effeccctively applying MIS in your business.

HISTORY OF MANAGEMENT INFORMATION SYSTEMS

Owing to the strong link between Management Information Systems and technology, the history of these systems goes hand in hand with the history of computing technology.

With that said, we will split the evolution of MIS into five eras. Let’s take a closer look at what changes were effected in each of these eras.

First Era: Computing on Mainframe and Minicomputers

This was the era before 1965 when computing was done on large mainframe computers located in large special rooms designed specifically for the computers. This included special temperature control to ensure that the machines always operated in optimum conditions.

These computers were operated by teams of technicians and hence the cost of operating them was quite high. As a result, most of the computing was done on a time-sharing basis to meet the high costs of owning and operating these mainframes. The dominant supplier of hardware and software in this era was IBM.

With time, technology advanced and towards the end of this era, minicomputers were introduced. The minicomputers were significantly smaller and cheaper, hence large companies could afford to own these and do their computing in-house. However, the minicomputers were still very expensive when compared to today’s standards.

Second Era: Personal Computers

This era began in 1965 and was mainly as a result of the introduction of the microprocessor. This meant that companies could now afford cheaper personal computers, which provided access to computing power that would have cost exorbitant amounts of money just one decade before.

By mid 1980s, personal computers were becoming much more affordable hence they were made available to the mass markets. The predominant ones at this time were the Apple I and Apple II, and the IBM personal computer, commonly referred to as PC. The PC was friendlier to businesses, which explains why it rose to popularity in those early days.

During this era, Management Information Systems started making way into businesses thanks to the development of a spreadsheet application known as VisiCalc (short for “visible calculator”). This application was released originally for the Apple II, but a PC version was also made for the IBM PC when it was produced.

This application is considered by many the factor that turned the microcomputer from an expensive gadget for scientists and enthusiasts to an all-important business tool thus paving way for the modern Management Information Systems. Following the success of the VisiCalc, more powerful spreadsheet applications like the Lotus 1-2-3 and Microsoft’s Multiplan and later Excel.

Follow this interview with the developers of VisiCalc.

Third Era: Client/Server Networks

With the widening use of computing in business and advances in technology, more needs came from the business community to ensure a more efficient interaction with information. Since companies were able to computing thanks to reduced costs of computers, better ways had to be sought for making the most out of this computing power.

One of the most prominent needs that arose was the need for employees within organizations to share computer information with other employees. The solution was provided by client/server networks that went a long way in enhancing the management information systems we have today.

One big step in this era was the development of intranets which were static websites that gave employees access to information that was stored in a central location. This made it possible to work faster and more efficiently because more people could access information on a server as long as their computers were on a common network.

Fourth Era: Enterprise Computing

The fourth era was an improvement of the third era that saw to it that different departments in companies had even better access to information. The main improvement was the introduction of high speed enterprise networks that enabled faster access to information.

This provided a better and more complete management structure since decision making was easier thanks to the better access of information from different parts of the company. Essentially, the applications used by departments in the company were consolidated and woven together into a single platform that was accessible from the company network.

High-speed networks were also added into the mix to increase the efficiency of the platform. This meant that business operations such as finance, accounting, sales, marketing, inventory and even human resource management could be harmonized to ensure cooperation and efficiency throughout the entire company.

Although the applications used by different departments differed and measures of access control were introduced to limit access to sensitive company information, this era gave top management officials a complete view of the current standing of the entire business.

Fifth Era: Cloud Computing

This is the current era that employs the latest networking technology to further enhance information processing and access by business officials and management executives. The added element in this era is the fact that the networking technology adds a level of mobility to the systems.

This means that irrespective of your location, the configuration that you are using or the hardware that’s available, you will still be able to use business applications and access data stored in company servers. With the improvement of cellphone networks to provide high speed mobile data access and the increase in popularity of Wi-Fi networks, managers have ready access to the Management Information System around the clock hence better decisions can be made faster.

This era frees management from the chains of office-bound computers with local network access. With the rise in popularity of mobile devices such as laptops, smartphones and tablet computers, great levels of mobility are achieved while still improving on efficiency.

This also calls for a change in management style since the workers will be generally more informed due to the ability to produce and consume more information about the business, giving rise to what’s now known as the knowledge worker. Knowledge workers are more empowered and hence more productive naturally.

This means that the command-and-control method of management will no longer be the most effective management style for this worker. As a result, employee autonomy is gradually becoming more and more inevitable.

A beginner’s guide to cloud computing.

TYPES OF INFORMATION SYSTEMS

Management Information Systems is one out of several information systems that are used in business. To better understand Management Information Systems, let’s look at the different types of information systems available in business.

• Transaction Processing Systems. These systems have been designed to collect, process and store transactions that occur in the day to day operations of a company. The system can also be used to cancel or modify transactions done in the past if the need arises. One property of this system that enables them to work effectively is the ability to accurately record multiple transactions even if the different transactions take place simultaneously. They are built to be able to handle large volumes of transactions. Examples include stock control systems, payroll systems, order processing systems etc.
• Decision Support Systems. These systems help decision makers to make the best decisions by generating statistical projections from analyzed data. Although it does not eliminate the need for the manager’s judgment, it significantly improves the quality of the decision by offering forecasts that help determine the best course of action. These systems compile information from several sources for purposes of aiding in decision making. Examples of these systems include computer supported cooperative work, group decision support systems, logistics systems and financial planning systems.
• Executive Information Systems. Also known as Executive Support System, this is a tool used for reporting enterprise-wide data to top executives. These systems provide quick and easy to use reports that are presented in graphical displays that are easy to compare. They can be taken as specialized decision support systems because they provide information necessary to help improve the quality of decisions. Owing to the high expectations from such a system, these systems need to be highly individualized hence they are usually custom made for specific clients. They are also customizable to fit the specific needs of the clients.
• Management Information Systems. These systems make use of information technology to help managers ensure a smooth and efficient running of the organization. Information collected by these systems is structured so that the managers can easily evaluate the company’s current performance vis-à-vis previous outputs. Some of the common types of Management Information Systems include process control systems, human resource management systems, sales and marketing systems, inventory control systems, office automation systems, enterprise resource planning systems, accounting and finance systems and management reporting systems.

COMPONENTS OF MANAGEMENT INFORMATION SYSTEMS

To effectively deliver the information needed to decision makers, Management Information Systems need to have the necessary components to collect, process, store and retrieve the information whenever it is needed.

To achieve this, these systems use the following four components:

1. Information System. This is a combination of software, hardware, personnel and infrastructure. This component helps in the collection of data that is stored in the MIS. The hardware includes computers, scanners, printers and network devices. The software elements include the company’s enterprise software and any other software that is used in the running of the company’s network. This component makes it possible for employees to interact with the system and thus information can be collected
2. Database Management System. This component is primarily made up of computer programs that help in the storage and retrieval of data. Of course, it also includes the actual physical databases where the information is stored after it has been captured. There are several different database management systems that can be used in Management Information Systems. The suitability of the systems will depend on the amount of data that will need to be processed and stored in the system. There are small database management systems that can comfortably work on personal computers and there are huge ones that will need larger and more complex machines like mainframe computers. Learn more about database technologies.
3. Intelligence System. This component is concerned with processing of the data collected and presenting it in a manner that is easy to comprehend. Everything from the processing of the data to the displaying of the data is designed to give top executives an easy time as they try to make decisions concerning the business. It is sometimes referred to as business intelligence which stores human knowledge and uses the logic to formulate quick solutions for future problems where patterns match.
4. Research System. This component is concerned with identifying the main management problems in the organization and coming up with alternative decisions that could have sufficed in a particular situation. This helps ensure that all the possible options are analyzed and the best decision made. The best decision is not always the most obvious one. This component of Management Information systems ensures that the best decision is reached even in those instances.

ROLE OF MANAGEMENT INFORMATION SYSTEMS IN BUSINESS

The main role of Management Information Systems is to report on business operations with the purpose of supporting decision making. This is to ensure that the organization is managed in a better and more efficient way so that it can be able to achieve full potential thus gain competitive advantage.

Let’s look at some of the other roles played by Management Information Systems in an organization.

• To provide information readily to company decision makers. Regardless of whether it is a marketing, financial or operational issue, managers need quick access to information so that they can make good decisions that will have a positive impact on the company’s performance. Management Information Systems enhance this by strategically storing vast amounts of information about the company in a central location that can be easily accessed by managers over a network. This means that managers from different departments have access to the same information hence they will be able to make decisions that collectively help solve the company’s problems in the quickest way.
• Management Information Systems also help in data collection. Data from everyday operations in the company is collected and brought together with data from sources outside the organization. This enables a healthy and functional relationship between distributors, retail outlets and any other members of the supply chain. It also helps keep good track of performance since production and sales numbers will be recorded and stored in a central database that can be accessed by all members of the MIS. Access to this information also helps ensure that problems are detected early and decisions are made quickly using the latest information.
• To promote collaboration in the workplace. In any large company, there are many situations that call for input from several individuals or departments before decisions can be made. Without an efficient communication channel, these decisions can take a very long time. Even with good communication channels, if the different stakeholders don’t have access to all the available data, the process would hit a number of snags before it’s complete. Management Information Systems ensure that all the members of the decision-making group have access to all the data that’s required to make the decision even if they are working from different physical locations.
• To run possible scenarios in different business environments. Before making a decision that will affect the overall standing of the business, a lot of precaution must be taken. There is a need to check and verify that the company will not suffer after making a decision. Management Information Systems enable executives to run what-if scenarios so that they can see how some of the important metrics in the business will be affected by a given decision. The data is presented in easy to understand reports and graphs that make interpretation easy. For example, a human resource manager will be able to tell what will happen to the revenue, production, sales and even profit after reducing the number of workers in a manufacturing department. Another example would be the effect of a price change on profitability. Once executives have been able to see whether or not the decision will be beneficial to the company, it is easier to make good decisions that will not leave the company in chaos.
• Management Information systems give accurate projections of the company’s standing in the short and long term. Most of the decisions made by top executives in companies have an effect on the company strategies. As a result, some of them may need some modifications done on the company goals or strategies. Most Management Information Systems come with trend analysis features that will enable you to project the performance of a business with the current configuration and how they will be affected once you have implemented any changes that you are considering. The Management Information Systems that don’t have the trend analysis feature will still provide you with enough information to accurately carry out the analysis using external tools.
• Management Information Systems help track the implementation of particular decisions in a company. Before making a decision, executives use these systems to make projections of the expectations from the particular decision. If they decide to go ahead with the changes, there will be a need to keep monitoring the performance to see if you are on track to achieving the desired results. Management Information Systems give detailed reports and recommendations so that the evaluation of the goals moves smoothly and effectively. You get data that shows if your decisions have had the desired effect. If not, you will be able to take the necessary corrective measures early so that you can get back on track.
• To improve on the company’s reporting. One of the reasons why Management Information Systems are favored by large companies is the effectiveness of the reporting features. The decisions can be made quickly because the information is presented in an easy to understand format. The fact that the system is accessible by people from different parts of the organization makes it an effective reporting and communication tool. Findings can be shared among colleagues with all the necessary supplementary data. It is also possible to create brief executive summaries that sum up the whole situation for review by senior company executives in situations that need their approval.

ADVANTAGES OF MANAGEMENT INFORMATION SYSTEMS

There are many benefits that come with applying Management Information Systems. Some of these benefits help make work easier for management while the rest of them help the organization as a whole.

Let’s take a closer look and see what you stand to gain from having a MIS.

• All stakeholders in the company have access to one single database that holds all the data that will be needed in day to day operations. If the MIS is used for project management, the contractor, client and consultant will be able to achieve a high level of transparency hence it will be easy to develop trust. Operations will also be smoother because information will always be readily available and data collection methods like forms or questionnaires will be standardized.
• Employees and other stakeholders in the organization will be able to spend more time doing productive tasks. This is because a big chunk of their time is saved thanks to the more efficient information system. This time would have otherwise been spent setting up or retrieving traditional information recording systems such as forms and files. As a result, the company is able to save on manpower costs, while at the same time producing more output in a fixed time span will now be spent productively.
• Another benefit of Management Information Systems is that they bring the power of data processing tools that help significantly improve the quality of decisions made in the company. A majority of Management Information Systems have built-in data processing tools that are able to draw conclusions based on the inputs received from the different sources. This helps make better plans for material management, manpower allocation and even the overall execution of the project.
• Owing to the flexibility that is brought by the use of mobile devices such as tablet computers and smartphones, Management Information Systems ensure that employees have easier and closer interaction with information about the progress of any process within the organization. This also ensures a higher degree of accuracy in data collection since it will be possible to record the progress in smaller milestones throughout the day on mobile devices as opposed to recording once at the end of the day. As a result, management is able to get a better idea of the progress due to the availability of the latest information.
• Inputs and modifications in these systems are logged and the authors noted. The time when the change has been made is also recorded for future reference. This means that the company is able to achieve a higher degree of accountability since all the actions can always be tracked back to the particular individuals who initiated them. This also means that the best performing employees can also be easily identified since information such as production numbers per shift and sales reports are always available and well presented in the system.
• Management Information Systems help reduce the amount of paperwork that departments have to deal with thanks to the central database that’s accessible from the company network. This means that in addition to making processes simpler and faster, the company is able to go paperless while at the same time reducing its carbon footprint. The bills also go down since the need for items like plain papers, ink and toner cartridges will be reduced significantly. Transportation costs are also reduced since there will be no need for shipping documents back and forth for approval and signatures. Shelf space will be saved and used for other tasks. Company wastes will also be reduced when the company goes paperless.
• Reports make it easy for companies to easily identify their strengths and weaknesses in carrying out various tasks. Management Information Systems provide revenue reports, performance reports for employees, expenses tracking reports and many others. When companies use these reports, they are able to improve their operations.
• From a top executive perspective, Management Information Systems help give an overall impression of where the company stands financially. These systems can also give overall status reports for specific projects within the organization. This enables top executives and managers to easily tell if the company is on track towards achieving its goals.
• Most Management Information Systems provide a channel for customers to collect and store vital data and feedback from customers. With this data, companies can easily adjust their products and marketing campaigns to better suit the needs of the customers hence improving on sales.
• With management information systems, a company gains competitive advantage. This is because operations are faster and smoother and thus results are achieved faster and more efficiently. Customers will be happy with the service delivery because they will be getting the answers that they seek faster and employees will be motivated because most of the tasks will become easier with better access to data.
• MIS helps eliminate redundant roles. When information is stored efficiently, it’s possible to identify parts of a system that are unnecessary. This means that any efforts that were duplicated are eliminated hence the company is able to better use the available resources.

CHALLENGES WHEN APPLYING MANAGEMENT INFORMATION SYSTEMS IN BUSINESS

Even with the numerous benefits, there are a number of challenges that companies are likely to face when applying Management Information Systems in their businesses.

• The first challenge is in the cost of equipment. For a big company to successfully incorporate a Management Information system, there is a need to purchase devices that the employees and management executives will be using to interact with the system. These devices include servers, tablets, laptops and desktop computers. In addition, the company needs to invest in a good network that will connect these devices in order for the system to work effectively.
• Training of the workforce can also become a problem when applying Management Information Systems in a company. Without a proper understanding of how the system works, it can be hard to reap the full benefits of using it. This therefore makes it necessary for the company to ensure that employees and their managers are well trained on how to use the system. This can be an expensive and time consuming exercise.
• The systems are expensive to purchase. Owing to the unique needs of each organization, Management Information Systems have to be customized for each company. This means that there has to be brainstorming sessions where the vendors sit with management officials seeking to understand the needs before they can develop the system. As a result, the cost of the system goes up, thus taking it out of reach for small and medium companies.
• Many companies end up purchasing systems that lack the features they need most. As mentioned earlier, each company has its own unique needs when it comes to Management Information Systems. When you purchase a system that is not meant for your company, you will have better access to data that doesn’t help improve your operations. As a result, you will not be able to get the best return on investment.
• There is also a need for trained personnel to keep the system in good working order at all times. Like any other system, management information systems need proper maintenance in order for them to produce the best results. This means that you will need to add specialized personnel for system maintenance in your company. Without these people, using the system will be a challenge since errors will go unresolved and this will result in inefficiencies in the operations.
• Management Information Systems are heavily affected by large changes in the company. This means that before you make any change in the way you run the company, there will be a need to consider the impact of the changes on the information system. Sometimes, it becomes impossible to make some changes without changing the Management Information Systems hence having the system in place ends up being a limitation. However, most small changes should easily be incorporated in a good MIS.
• Management Information Systems will result in the loss of employment for a number of employees in a company. People like office messengers and traditional registry clerks will need to be reduced or eliminated after the system has been incorporated since some of these tasks will be automatically done on the system. These employees will not be happy about the changes and this can easily result in lawsuits or other problems with trade unions when large numbers of employees are retrenched.

TIPS FOR EFFECTIVELY APPLYING MANAGEMENT INFORMATION SYSTEMS IN A BUSINESS

Even with the challenges, it goes without saying that installing a Management Information System is the way to go for businesses to perform better.

This means that companies should find a way of working around the challenges. Here are a number of tips that will help ensure a successful and smooth transition.

Know your needs from the outset

This is the first step towards getting an effective system. Before you even start looking for a vendor, it’s important to first ensure that you know exactly what type of system you want for your company. Make a portfolio score card that is in line with the goals that you have as a company.

This score card should define the objectives and the key performance indicators that you will be using to evaluate your success as a company. This is what you will go with to the vendors.

Evaluate a number of vendors

Once you have established what you need, it’s time to talk to a number of vendors in the market.

Find out about their costs for the system and any additional benefits that you will get when you purchase the system from them. Some of the things to look out for include support, installation, updates and training of employees on how to use the system.

The vendor to choose is the one who offers the system that you need and at the same time, one who will give you the best after sales service to ensure that you have an easy time using the system.

Train your employees well

Don’t assume that your employees will figure out how to use the system once it is in place. Remember, the quality of the decisions made by management from using the MIS will be determined to a large extent by the data that has been captured by employees.

This means that you need to put all the necessary measures in place to ensure that these employees do a good job.

Invest in reliable devices across your company

Investing in enough devices improves the accessibility of the system. This ensures that more data is tracked and as a result, more of it is accessible to management.

Better accessibility also reduces the time taken for data to be entered in the system and as a result making it available faster.

Get a system that only has the features that you need

Instead of investing in a complicated system that is expensive to run and tracks large volumes of data that you don’t need, you should go for something that addresses the immediate needs of your company’s management.

This way, you will not have to pay too much for the system and at the same time, you will not take your workforce through a complicated and unnecessary training process. You will also reduce the chances of errors arising in the use of the system since the features and functions will be easy to understand.

Make sure that you choose a system that is adaptable to changes

The system that you choose should be able to adapt to changes in the company. With time, you might need to change the personnel handling different tasks in the system or the reports that you will need the system to generate.

It is important to ensure that the system is able to handle these small but frequent changes easily without having to contact the developer. If there will be a need to contact the developer, like in the event of large changes, you should discuss this early before you make the decision to purchase the system.

However, most small changes should be effected in-house.

Be prepared for the changes

Incorporating a Management Information System in your business is a big step that will result in many changes in your operations. Be prepared for these changes and prepare your workforce for them.

You will need to train your employees, move some of them from one department to another or even adjusting job descriptions to eliminate redundancy in tasks.

MIS – Understanding Information Systems

Introduction

In today’s information and communication age, there is a constant reference to information systems and management of information systems. In the digital age data, storage and retrieval are done through various systems and interfaces.

Information System

An information system, therefore, can be defined as set of coordinated network of components which act together towards producing, distributing and or processing information. An important factor of computer based information system is precision, which may not apply to other types of systems.

System

In a system, network of components work towards a single objective, if there is lack of co-ordination among components, it leads to counterproductive results. A system may have following features:

• Adaptability: some systems are adaptive to the exterior environment, while some systems are non-adaptive to the external environment. For example, anti-lock braking system in car reacts depending on the road conditions, where as the music system in the car is independent of other happening with the car.
• Limitation: every system has pre-defined limits or boundaries within which it operates. This limits or boundaries can be defined by law or current state of technology.

Information

Common definition of information is data. However, data is no true information. Data gets its meaning and significance if only it is information. Information is represented with data, symbols and letters.

Information has following properties:

• Objective: One of the key properties of information is its objectiveness. Objective information is a key component of any modern scientific research.
• Subjective: Set of information which is useful to science may be abstract or irrelevant for others. Therefore, information is subjective also.
• Temporary: Information is temporary with every update in the database.

Representation of Information

Information is represented with help of data, numbers, letters or symbols. Information is perceived in a way it gets represented. Decimal system and binary system are two ways of representing information. The binary circuits of computers are designed to operate under two states (0,1).

Organization of Information

The way in which information is organized directly affect the way the information is managed and retrieved.

The simplest way of organizing information is through linear model. In this form, data is structured one after another, for example, in magnetic tapes, music tapes, etc.

In a binary tree model, data is arranged in an inverted tree format where it assumes two values.

The hierarchy model is derived from a binary tree model. In this model, branch can assume multi-value data, for example in the UNIX operating system this model is used for its file system.

The hypertext model is another way of organizing information; World Wide Web is an example of this model.

Random access model is another way of organizing information. This model is used for optimum utilization of available computer storage space. Here data is stored in specified location under direction of the operating system.

Networking Information

Information is networked through network topology. The layout of all the connected devices, and it provides virtual shape or structure to the network is known as network topology. The physical structure may not be representative of network topology. The basic types of topology are bus, ring, star, tree and mesh.

The above topologies are constructed and managed with help of Hubs, Switches, Bridges, Routers, Brouters and Gateways.

Securing Information

Security of information as well as an information system is critical. Data back-up is on the way through which Information can be made secured. Security management for network and information system is distinct for different setup like home, small business, medium business, large business, school and government.

The Changing Face of Business Environment

Introduction

The last decade has shown rapid development in the information technology and its application. This has helped changed the way we look at the world as well as the way business is conducted. Both business and trade have gained under the wave of information technology with improvement in efficiency, productivity and bottom line. Productivity improvement has facilitated speedy and accurate production in large volumes. Indian financial sector has also benefited from advancement in information technology.

Business and Information Technology

Current global and competitive business environment constantly asks for innovation, existing knowledge base is getting obsolete, continuously thriving for advancement in process improvement. The learning curve is always put to test, and every company is striving to remain ahead of the curve. Due to this shift in the way business is getting conducted has thrown out new reality of ever shortening product and service life cycle. More and more companies are coming out with customized products and finding ways to differentiate from competition.

A recent survey conducted has highlighted that the change in the business environment can be summarized with following:

• Globalization and opening up of markets has not only increased competition but also has allowed companies to operate in markets previously considered forbidden.
• Inclusion of information technology as integral part of business environment has ensured that companies are able to process, store and retrieve the huge amount of data at ever dwindling costs.
• Globalization has encouraged free movement of capital, goods and service across countries.

Characteristics of Business Environment

To understand business environment and drivers of change, it is first important to study its characteristics. They are as follows.

• Business environments are complex in nature as well as dynamic because they are dependent upon factors like political, economic, legal, technological, social, etc. for sustenance.
• Business environment affects companies in different industries in its own unique way. For example, importers may favor lower exchange rate while exporters may favor higher exchange rate.
• With change in the business environment, some fundamental effects are short term in nature while some are felt over a period of time.

Business Process Outsourcing

Business Process Outsourcing involves contracting one or many front end (customer related) or back end (finance, HR, accounting, etc.) activities within a company to a third party service provider. The number of jobs within BPO industry has increased exponentially in last decade. BPO is one of the new faces in business environment.

Outsourcing has help companies reduce their overhead expenses, improve productivity, shorten innovation cycles, encourage new market penetration and also improving customer experience. India has seen tremendous growth in BPO industry within function like customer care, finance/accounts, payroll, high end financial services, human-resource, etc.

Emerging Trends

The recent explosion of information technology has seen few but significant emerging trends, for example, mobile platform for doing business, cloud computing, technology to handle a large volume of data, etc.

These fresh technologies and platforms are offering numerous opportunities for companies to drive strategic business advantage and stay ahead of the competition. Companies need to work on new plans as to maintain flexibility and deliver customer satisfying products and services.

Types of Information Systems – Components and Classification of Information Systems

Introduction

An information system is integrated and co-ordinate network of components, which combine together to convert data into information.

Components of information systems

An information system is essentially made up of five components hardware, software, database, network and people. These five components integrate to perform input, process, output, feedback and control.

Hardware consists of input/output device, processor, operating system and media devices. Software consists of various programs and procedures. Database consists of data organized in the required structure. Network consists of hubs, communication media and network devices. People consist of device operators, network administrators and system specialist.

Information processing consists of input; data process, data storage, output and control. During input stage data instructions are fed to the systems which during process stage are worked upon by software programs and other queries. During output stage, data is presented in structured format and reports.

Classification of Information System

In any given organization information system can be classified based on the usage of the information. Therefore, an information system in an organization can be divided into operations support system and management support system.

• Operations support systemIn an organization, data input is done by the end user which is processed to generate information products i.e. reports, which are utilized by internal and or external users. Such a system is called operation support system.The purpose of the operation support system is to facilitate business transaction, control production, support internal as well as external communication and update organization central database. The operation support system is further divided into a transaction-processing system, processing control system and enterprise collaboration system.
• Transaction Processing System (TPS)In manufacturing organization, there are several types of transaction across department. Typical organizational departments are Sales, Account, Finance, Plant, Engineering, Human Resource and Marketing. Across which following transaction may occur sales order, sales return, cash receipts, credit sales; credit slips, material accounting, inventory management, depreciation accounting, etc.These transactions can be categorized into batch transaction processing, single transaction processing and real time transaction processing.
• Process Control SystemIn a manufacturing organization, certain decisions are made by a computer system without any manual intervention. In this type of system, critical information is fed to the system on a real-time basis thereby enabling process control. This kind of systems is referred as process control systems.
• Enterprise Collaboration SystemIn recent times, there is more stress on team effort or collaboration across different functional teams. A system which enables collaborative effort by improving communication and sharing of data is referred to as an enterprise collaboration system.
• Management Support SystemManagers require precise information in a specific format to undertake an organizational decision. A system which facilitates an efficient decision making process for managers is called management support system.Management support systems are essentially categorized as management information system, decision support system, expert system and accounting information system.

Management information system provides information to manager facilitating the routine decision-making process. Decision support system provides information to manager facilitating specific issue related solution.

Further Classification

An information system can be categorized based upon activity into strategic planning system, tactical information system and operational information system.

Information Systems vs Information Technology

Introduction

It is often observed that term information system and information technology are used interchangeably. In a literal sense, information technology is a subset of information systems. Information systems consist of people, processes, machines and information technology. The great advancement in information systems is due to development in information technology and introduction of computers.

Information System

An information system can be defined as set of coordinated network of components, which act together towards producing, distributing and or processing information. An important characteristic of computer-based information systems information is precision, which may not apply to other types.

In any given organization information system can be classified based on the usage of the information. Therefore, information systems in business can be divided into operations support system and management support system.

Information Technology

Everyday knowingly or unknowingly, everyone is utilizing information technology. It has grown rapidly and covers many areas of our day to day life like movies, mobile phones, the internet, etc.

Information technology can be broadly defined as integration of computer with telecommunication equipment for storing, retrieving, manipulating and storage of data. According to Information Technology Association of America, information technology is defined as “the study, design, development, application, implementation, support or management of computer-based information systems.”

Information technology greatly enhances the performance of economy; it provides edge in solving social issues as well as making information system affordable and user friendly.

Information technology has brought big change in our daily life be it education, life at home, work place, communication and even in function of government.

Comparison of Information System and Information Technology

Information system and information technology are similar in many ways but at the same time they are different. Following are some aspects about information system as well as information technology.

• Origin: Information systems have been in existence since pre-mechanical era in form of books, drawings, etc. However, the origin of information technology is mostly associated with invention of computers.
• Development: Information systems have undergone great deal of evolution, i.e. from manual record keeping to the current cloud storage system. Similarly, information technology is seeing constant changes with evermore faster processor and constantly shrinking size of storage devices.
• Business Application: Businesses have been using information systems for example in form of manual books of accounts to modern TALLY. The mode of communication has also gone under big change, for example, from a letter to email. Information technology has helped drive efficiency across organization with improved productivity and precision manufacturing.

Future of Information System and Information Technology

Information technology has shown exponential growth in the last decade, leading to more sophisticated information systems. Today’s information technology has tremendously improved quality of life. Modern medicine has benefited the most with better information system using the latest information technology.

Information systems have been known to mankind in one form or the other as a resource for decision making. However, with the advent of information technology information systems have become sophisticated, and their usage proliferated across all walks of life. Information technology has helped managed large amount of data into useful and valuable information.

Perils and Consequences of Information Overload and Drowning in a Sea of Information

What is Information Overload ?

We are drowning in a sea of information. We are inundated with news, views, opinions, facts, and information every time we log in to the internet or turn on the TV. This constant barrage of information thrown at us nonstop in a 24/7 cycle makes us weary and lost in this never-ending repetitive world. Therefore, it is very important for professionals, students, and anyone who wants to focus and concentrate to learn the art of separating the wheat from the chaff and to lead productive lives that are meaningful and deep.

For instance, knowing what is happening all over the world instantaneously and uninterruptedly would produce a fatigue in our minds and lead to exhaustion that can drain productivity and lead to loss of focus. One does not need to know all the news and happenings on Twitter, Facebook, Blogs, and on TV all the time. Unless one learns the habit of separating what one wants from what is available, most likely one would end up with what has been called information overload that denotes the extraordinary amount of information that we are being bombarded with constantly.

The Consequences of Information Overload

Many companies have banned social media sites and even internet sites in an attempt to make the employees focus on the work. Despite these measures, many employees still find ways and means to get updated and to log in to other sites much like addicts who would do anything for a fix. While we are not against getting facts and information from diverse sources in a bid to stay ahead of the curve, what we are advocating is the trend of being constantly on the move by surfing continuously which can have adverse side effects. It must be remembered that this trend when it goes out of control is as bad as getting hooked on to psychotropic substances and much like that it can lead to shorter attention spans, need for instant gratification, and a general sense of being frazzled.

The truly productive employees are those who do not multitask nor spend endless hours watching the big game scores or news and event updates from around the world. Indeed, one of the reasons investment bankers and consultants are much sought after is that they have learnt to distinguish between short term and ephemeral trends and instead, detect longer-term trends and extrapolations from existing information that is meaningful and makes business sense.

Present Shock and Generation Y and their Impact on Society and Businesses

The present generation Y has grown up not knowing what it is like to live without the internet or the TV. This means that their attention to detail is as short as the cryptic SMS (Short Messaging Service) or the Tweet and therefore, many occupational and lifestyle experts are worried that this aspect would lead us to a situation where we lose sight of the longer and deeper narrative and instead, settle for the fleeting moment that leads us to a “Present Shock” where the immediacy is more important than the longer term and where the present overwhelms us leading to a general sense of disorientation. This is not the way businesses and institutions have been built in earlier decades and this constantly changing and ever flux-filled times are proving to be a challenge for marketers, policymakers, and business leaders.

Managing Information Overload

Apart from this the crux of the issue is that when we are inundated with information overload, there is a danger that we might lose the essential information and instead, pick up drivel and nonsense from the information sources which would lead to situations where businesses make the wrong decisions based on faulty information and wrong assumptions. This is the danger that information overload poses to us and it is better sooner than later that we as individuals learn to “switch off” when needed and to master the art of managing too much information and develop the skill of finding the right data instead of paying attention to meaningless data.

Communication Systems and Groupware – Information System Concepts that Apply in All Functional Areas of Business

Introduction

Information systems can be defined as set of co-ordinated network of components, which act together towards producing, distributing and or processing information. Information systems in conjunction with information technology have various applications in today’s business environment.

Communication System

The process of transmitting information from one place to another is called communication. The transfer of communication needs to be done in an efficient manner without any interference. The transfer of communication has to be reliable and secure.

Communication system is a network of components and devices, which interact with each other to accomplish the task of transmission of information.

Components of a communication system are input device, transmitter, channel, receiver and output device. Functions of communication system components are as follows:

Input Device: Function of input device is to convert a message to a form suitable to that particular communication system.

Transmitter: Function of the transmitter is to convert the message suitable to that particular communication channel.

Channel: It is the medium through which message gets transmitted, for example, air, cable, fiber-optic, etc.

Receiver: Function of the receiver is to convert the signal into form suitable for the output device to consume.

Output Device: Function of the output device is to convert the signal into form suitable to the end user.

Communication systems are of two types, digital communication and analog communication systems.

Some of the communication systems currently in use are email, voice mail, smart phone, telecommuting, e-commerce, global positioning system, fax, instant messaging, video conferencing, the internet, web, etc.

Groupware

Groupware is a technology which provides support for work in a group. This technology is referred to as collaborative technology. This technology facilitates communication, cooperation, coordination, problem-solving and in negotiations among internal as well as with the external work group. Compared to earlier telephony systems, modern information systems use computer networks such as the internet, email, etc. to achieve collaboration.

Groupware is primarily divided into two sub systems synchronous and asynchronous. In synchronous groupware; interaction between users is at real time where as in asynchronous groupware interaction between users is at a different time.

Groupware is essential of all modern organizations. Groupware has a definite advantage over stand alone user.

Some examples of groupware are as follows:

Newsgroup and mailing list: This groupware looks at collaboration beyond on 1on1 communication. It enables faster flow of information across organization.

Workflow systems: This groupware allows smooth flow of documents and information across organization. For example, monthly time card, once entered by the employee is routed to the employee’s manager for approval, after manager’s approval time card is sent to the payroll department for monthly salary processing.

Hypertext: This groupware system is used to link several documents on the web.

Group Calendars: This groupware is essential part of the project management system. It provides information of project status, scheduling conflicts, etc.

Shared Whiteboards: This groupware allows user located at different location access to a common whiteboard. Whiteboards are commonly used in informal conversation and brain storming session.

Information systems concepts play an important part in today’s work environment. Collaboration and innovation are the mantra of success for today’s organization.

Emerging Trends in Information Technology

Introduction

21st century has been defined by application of and advancement in information technology. Information technology has become an integral part of our daily life. According to Information Technology Association of America, information technology is defined as “the study, design, development, application, implementation, support or management of computer-based information systems.”

Information technology has served as a big change agent in different aspect of business and society. It has proven game changer in resolving economic and social issues.

Advancement and application of information technology are ever changing. Some of the trends in the information technology are as follows:

1. Cloud ComputingOne of the most talked about concept in information technology is the cloud computing. Clouding computing is defined as utilization of computing services, i.e. software as well as hardware as a service over a network. Typically, this network is the internet.Cloud computing offers 3 types of broad services mainly Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).Some of the benefit of cloud computing is as follows:
   • Cloud computing reduces IT infrastructure cost of the company.
   • Cloud computing promotes the concept of virtualization, which enables server and storage device to be utilized across organization.
   • Cloud computing makes maintenance of software and hardware easier as installation is not required on each end user’s computer.
   Some issues concerning cloud computing are privacy, compliance, security, legal, abuse, IT governance, etc.
2. Mobile ApplicationAnother emerging trend within information technology is mobile applications (software application on Smart phone, tablet, etc.)Mobile application or mobile app has become a success since its introduction. They are designed to run on Smartphone, tablets and other mobile devices. They are available as a download from various mobile operating systems like Apple, Blackberry, Nokia, etc. Some of the mobile app are available free where as some involve download cost. The revenue collected is shared between app distributor and app developer.
3. User InterfacesUser interface has undergone a revolution since introduction of touch screen. The touch screen capability has revolutionized way end users interact with application. Touch screen enables the user to directly interact with what is displayed and also removes any intermediate hand-held device like the mouse.Touch screen capability is utilized in smart phones, tablet, information kiosks and other information appliances.
4. AnalyticsThe field of analytics has grown many folds in recent years. Analytics is a process which helps in discovering the informational patterns with data. The field of analytics is a combination of statistics, computer programming and operations research.The field of analytics has shown growth in the field of data analytics, predictive analytics and social analytics.Data analytics is tool used to support decision-making process. It converts raw data into meaningful information.Predictive analytics is tool used to predict future events based on current and historical information.Social media analytics is tool used by companies to understand and accommodate customer needs.

The every changing field of information technology has seen great advancement and changes in the last decade. And from the emerging trend, it can be concluded that its influence on business is ever growing, and it will help companies to serve customers better.

Impact of Internet Revolution in Business

Introduction

Worldwide influence of the internet is well-established and acknowledged. Penetration rate of the internet has been phenomenal; almost 1/3rd of Human population are accessing the internet. The way business is conducted in this digital age has changed due to so many people logged on to the internet.

Advancement in communication and information technology has further strengthen the role of the internet in business. The internet is widely used in organization for marketing and promotion of products and services. The internet is used to deliver customer support, share information and provide training to employees.

With the internet becoming a powerful tool for employees, the impact on business is undeniable.

Internet and Porter’s Five Force Model

Porter’s five force model is a framework for industry analysis, business strategy development and study competition. The five forces of the model are the threat from upcoming and future competition, threat from existing substitute, bargaining power of consumers, negotiating power of suppliers and threat of competition. Internet has great Impact on all five force of the model:

Threat of new entrants: The internet has considerably lowered entry barrier in setting up new enterprise. The setting up of a new company does not require much capital investment, for example, online retail sites, etc. Ever increasing competition has lowered the margins.

Threat of new substitute: The Internet has reduced the product life cycle; shelf life of products and encouraged innovation is customer serving.

Bargaining power of customers: The internet has made the customer well informed about products and available substitute. Companies have to be careful in presenting differentiation and pricing.

Bargaining power of suppliers: Suppliers are well informed about happening in the industry thanks to the internet.

Threat of competition: The internet has made transparency and honest important factor in success of the company. Customers tend to know more about the company. The internet has lowered the cost of searching new available products.

Internet and the way business is conducted

The internet has changed the face of business. It has opened up new avenues of conducting business. Below are some impacts of the internet on business:

Communication: communication technology combined with the internet has given a new dimension to connectivity and dispersion of information. Employees are in constant touch through email, instant messaging, office intranet, etc.

Collaboration: The internet has facilitated collaboration among employees of organization. Geographical boundaries no longer hamper project work and sharing of information.

Business Transaction: The internet has encouraged the culture of online business or e-commerce. In recent years many players have opened shops through e-commerce. Internet banking, payment gateways, etc. are part of normal supply chain transaction.

Work Flexibility: The internet has enabled workers to log in from remote location and home. It has helped on the move employees by remaining in touch with happenings of work.

Web based application: The internet has facilitated the development of concept like cloud computing, which has enabled process and storing of data in large proportion. The internet has helped reduce infrastructure cost of the company.

The internet thus has made a big impact in the way the business gets conducted in both positive as well as a negative way. The internet has made many business obsolete example post offices. Online security issues like hacking, identity theft, etc. are a constant threat to internet users.

nternal Technology Framework: 7S Framework

Introduction

In the modern age of cutting-edge technology and continuous innovation, product life cycle is ever shortening. There is constant pressure on companies to differentiate from competition and earn customer satisfaction. In such a business environment, it is essential that internal organization network is strong and efficient to deal with any kind of changes.

The 7S framework introduced by McKinsey is one of the ways through which analysis can be done to determine the efficiency of organization in meeting strategic objective.

The 7S model is utilized to study and suggest areas within company which needs improvement, examine the effects with change in strategy, internal alignment with every merger and acquisition.

7S Framework

The 7S framework constitutes of 7 factors, which affect organizational effectiveness. These 7 factors are strategy, organizational structure, IT systems, shared values, employee skills, management style and staff. These 7 factors can be broadly categorized into Hard Elements-Strategy, Structure, Systems and Soft Elements-Shared Values, Skills, Style and Staff. Hard elements highlighted above are the ones which are under direct control of management. Soft elements are not in direct control of management and are driven by internal culture.

The 7 factors as per the framework can be defined as follows:

1. Strategy: It is defined as an action plan working towards the organizational defined objective.
2. Structure: It is defined as design of organization-employees interaction to meet defined objective.
3. Systems: It is defined as information systems in which organization has invested to fulfill its defined objective.
4. Staff: It is defined as workers employed by the organization.
5. Style: It is defined as the approach adopted by the leadership to interact with employees, supplier and customers.
6. Skills: It is defined as characteristics of employees associated with the organization.
7. Shared Values: It is the central piece of the whole 7S framework. It is a concept based on which organization has decided to achieve its objective.

Usage of 7S Framework

The basis of the 7S framework is that for organization to meet its objective it is essential all the seven elements are in sync and mutually balancing. The model is used to identify which out of 7 factors need to be balanced as to align with change in organization.

7S framework is helpful in identifying the pain points which are creating a hurdle in organization growth.

Technology and 7S Framework

In digital age, technology and technology-driven information systems both are game changer as far as meeting objective for organization is concerned. Companies are moving towards automation, cloud computing, etc. This has led to technology as central nervous system of the organization.

The 7S framework is applicable across all industries and companies. It is one of the premier models used to measure organizational effectiveness. In this challenging environment, strategy of organization is constantly evolving. In such an environment, it is essential organization to look back upon its seven elements to identify the source which is hampering the growth.

Organization can use the 7S framework to identify its position with existing strategy.

The Alignment of Technology and Corporate Planning

Introduction

In the digital age, information technology plays an important role in the success of an organization. Technology provides edge in this globalized world. Companies are facing competition not only from local companies but from international companies as well.

In such a scenario, it is important that company invest in technology which is aligned with overall strategy of the company. This calls for technology strategy formulation.

Technology Strategy Formulation

Technology strategy formulation talks about alignment between technology strategy and the overall strategy of the organization. Here the role of the Chief Information Officer comes into prominence. The CIO should have short term as well as long term vision of technology advancement. CIO should bridge implication of technology advancement and organization strategy. A clear communication of technology impact on organization needs to reach executive leadership.

This alignment between CIO and CEO revolves around issues like:

• CIO roles and involvement in overall strategy formulation of organization.
• Financial resources available to make investment in technology.
• Earlier results of alignment between technology and organization strategy.
• External business conditions.

CIO faces challenge to provide technology value adds for organization in achieving its objective.

Planning

Corporate planning plays an important role in alignment of technology with organization strategy. In a perfect scenario CIO and CEO will have a same planning horizon. However, it is observed that the CEO and CIO do not share same vision, from planning to execution.

This introduces the concept of planning lead time. In some organization, strategy execution does not match to technology planning horizon and execution. By the time technology strategy is executed, more advancement is observed in that system, thus competitive edge is lost.

In the above scenario, companies become reactive rather than pro-active. Companies need to adjust with challenges posed by market leaders and trend setters. A strong CIO-CEO relationship ensure organization develop understanding of technological challenges and its impact on overall organization.

Organizational Structure

Organization needs to ensure that their structure is agile and flexible as to accommodate changes in the technology. They should be efficient and effective enough to deal demands of the market change.

Organization needs to develop and maintain technology systems, which are flexible and adaptive. There are three types of technology infrastructure available with companies’ ERP, data warehousing and knowledge management.

All three dimensions ERP, Data Warehousing and Knowledge Management provide cutting edge to the organization.

Organizational Systems

Organization invests in technology looking at its present needs; future requirements and its capability to provide a competitive edge. Systems can be classified into three categories depending upon technology timeline, new systems, matured systems and declining systems.

New systems have latest technology and provide a competitive edge. As time progresses system and technology are adopted by more companies, thus losing competitive edge. Finally, systems and technology reach the obsolete stage where its usage has declined and is to be phased out.

Executive leadership of organizations is responsible to manage new systems range as to enjoy competitive edge. However, this requires substantial investment and clear vision of future technology state. Therefore, organization has to walk a tight rope in investment in new technology and phasing out the obsolete.

Information System for Business Effectiveness

Introduction

In this digital age with fierce competition, it is essential that managers within organization are completely aware and receptive to evolving changes. One the quickest evolving change is within information systems. This change in information systems is contributed to advances in computing and information technology.

Applying a concept that information system is strictly under the purview of IT department can lead to adverse situation for the company. Therefore, it is essential for organization to recognize information systems contribution in business effectiveness.

Systems and Innovation Opportunities

Development in information systems has brought opportunities but also threats. The onus is on the organization to identify opportunity and implement it. Organization needs to develop strategies, which can best utilize information systems to increase overall productivity.

The most common practice with regards to information systems is automation. Though automation is helpful, innovation using information systems give the organization a competitive edge.

Systems and Customer Delight

Organizations are fully aware that proliferation of information systems has reduced product life cycle, reduced margin and brought in new products. In such scenario customer satisfaction alone will not suffice, organization needs to strive for customer delight. Information systems with data warehousing and analytics capability can help organization collect customer feedback and develop products, which exceed customer expectation. This customer delight will lead to a loyal customer base and brand ambassador.

Systems and Organizational Productivity

Organizations require different types of information systems to mitigate distinctive process and requirements. Efficient business transaction systems make organization productive. Business transaction systems ensure that routine process are captured and acted upon effectively, for example, sales transaction, cash transaction, payroll, etc.

Further, information systems are required for executive decision. Top leadership requires precise internal as well as external information to devise a strategy for organization. Decision support systems are designed to execute this exact function.

Business transaction systems and executive decision support systems contribute to overall organizational productivity.

System and Workers Productivity

Information systems have facilitated the increase in workers’ productivity. With introduction of email, video conferencing and shared white board collaboration across organization and departments have increased. This increased collaboration ensures smooth execution and implementation of various projects across geographies and locations.

Information systems as a Value Add for Organization

Organization use information systems to achieve its various strategy as well as short-term and long-term goals. Development of information systems was to improve productivity and business effectiveness of organization. Success of information systems is highly dependent on the prevalent organization structure, management style and overall organization environment.

With correct development, deployment and usage of information systems, organization can achieve lower costs, improved productivity, growth in top-line as well as the bottom-line and competitive advantage in the market.

The readiness of workers into accepting the information systems is the key in realizing the full potential of them.

Development and deployment of information systems have revolutionized the way business is conducted. It has contributed to business effectiveness and increased in productivity.

Information Technology and Business Intelligence

Introduction

After 1990s there was a major transformation in the commercial world. All the organizations across industry sectors have started using information technologies to maximize their productivity and profitability. Organizations started using technologies like mainframes, PCs, telecommunications and the internet along with the goods and services which they offered to the consumers. This process has become the backbone of evolution of information technology. There has been manifold increase in investments in information technology sector.

A driving force of productivity:

The US economy has seen impressive growth in Gross Domestic Product in the past few years and it is in a state of expansion. There has been increased demand for labour and low inflation. The lack of increase in price has also flummoxed many economists. The traditional theories suggest that whenever there is growth in economy and decline in unemployment rate, there is an increased probability of price pressures.

“Productivity” means the process of utilizing the productive inputs to generate output. If all the input resources like men, machine/technology and materials are effectively used, then the costs can be better managed and the organizations can offer goods and services at moderate prices to the end users.

By combining the state-of-art information technology with business strategies, organizations can achieve increased productivity. Business strategy addresses various like identifying the target markets, consumer preferences and managing the process by which goods and services are produced/delivered to the end user.

Information technology makes it possible for the business leaders and decision makers to devise various business strategies based on economic theories. This is done with the flow of information to decision makers and employees throughout an organization. By implementing effective IT, the following operations can be easily analyzed by the managers. They are:

• Production
• Marketing/advertising
• Customer relationship management
• Distribution
• Finance
• Human Resource
• Telecomm and network processes

Organizations have already started experiencing the enhancement of business efficiency through the use of information technology. Significant breakthroughs have also happened in information technology like increase in speed and memory of computers. This in-turn has opened the doors for high-powered, state-of-art software applications. The latest developments in the telecommunications technology is a value addition to the internet. The combination of all these technology has created a vast information network and this has become information pulse of an organization.

What is Business Intelligence ?

Business Intelligence (BI) refers to the tools and technique which is used to convert raw data into meaningful and useful information. Using these techniques, large amount of unstructured data is handled to identify and create new business opportunities.

The main aim of business intelligence is to make the user easily interpret the data. Based on the insights provided by tools of business intelligence, organizations gain competitive market advantage and long-term stability.

When these unstructured or raw data is transformed into value-added information, it increases the knowledge of business to individuals of all categories in an enterprise. These data are used by decision makers to implement various business strategies based on economic theory. Resources also can be easily managed to cater the needs of the ultimate consumer.

Functions of Business Intelligence

Common functions of BI are:-

1. Reporting
2. Online analytical processing
3. Analytics
4. Data mining
5. Process mining
6. Business performance management
7. Predictive analysis; &
8. Prescriptive analysis

Information Technology as Driving Force for Innovation

Introduction

Last two decades have seen great stride in information technology. The development in information technology has changed the way business is getting conducted. One of the striking points about information technology is innovation. Information technology has been a driving force for product, service and process innovation.

Innovation in Last Decades

It has brought forward capabilities, which previously were only considered as fiction novel material. Information technology has supported miniaturization of electronic circuits’ making many products’ portable, for example, computers, phones, etc. Information technology has helped development in communication technology by making it affordable. Penetration rate of mobile phone is higher than ever before with greater coverage and with ever lowering cost.

The concept of big data has become reality, with development of high memory storage devices.

Function of Information Technology

Information technology is a network of devices, which are connected with each other, which process data into useful and meaningful information. Information technology, therefore, has six broad functions around which innovation is driven. The six broad functions are as follows:

• Capture: it is defined as a process to obtain information in a form which can be further manipulated. This input of information may be through keyboard, mouse, picture, etc.
• Transmit: it is defined as a process through which captured information is sent from one system to another. This system could be within same geographical boundary or otherwise. For example, Radio, TV, email, telephone, fax, etc.
• Store: it is defined as a process through which captured information is kept in safe and secure manner and, which can be further accessed when required. For example, hard disk, USB, etc.
• Retrieval: it is defined as a process through which stored information can be called upon when required. For example, RAM, hard disk, USB, etc.
• Manipulation: it is defined as a process through which captured and stored information can be transformed. This transformation could be the arrangement of data, calculation, presentation, etc., For example, computer software.
• Display: it is defined as a process of projecting the information. For example, computer screen, printer, etc.

Innovation and Information Technology

The last two decades of development and evolution in information technology is around six functions. The innovation driven by information technology has been the by-product of the six functions. Some of the significant development which has been achieved is as follows:

• Portability: advances in information technology have made portability of all electronic gadgets possible.
• Speed: computing is now done at speed at which earlier generations of super computer were working.
• Miniaturization: another innovation is in form of hand-held computing devices as well as an information system, like GPS, Smartphone, IPad etc.
• Connectivity: information technology has transformed communication capability.
• Entertainment: proliferation of multimedia and digital information has been tremendous.
• User Interface: advancement in information technology has changed way users interact with computing devices. The advent of touch screen has made computing intuitive and interactive.

From above cases it can leave no doubt that information technology and development in the driving force within today’s innovation.

lements of Information System Model

Introduction

Proliferation of information technology has increased in the last decade. Today’s organizations are acknowledging the importance of information systems. It has been accepted worldwide that information system provides competitive edge and are the bedrock for innovation. The six basic functions of information systems are capture data, transmit data, store data, retrieve data, manipulate data and display information.

Elements of Information System Model

The elements of an information system are customers, business processes, product services and communication technology. Design of an information system is done based on elements of the model.

1. CustomersEvery information system has end users or customers. An information system can have internal as well as external. Customers are beneficiaries of products and services provided by an information system. Here external customers could be people visiting a website for shopping or e-commerce transaction, people searching for cooking recipe, searching for tax saving tools, etc.Internal customer of an information system could be employee receiving salary from payroll system, employee checking inventory and stock, etc. Sometimes these employees could be the customer for the product and services, for example, employee working with a computer manufacturer could be customer of manufactured product.For a manufacturing organization, production department would be customer for supply department. Therefore, information system requirements of each department would be different. Information systems are design to service what is best for external customers. However, information systems should be flexible enough to support internal requirements also.
2. Products and ServicesThe result of data transformation is products and services. An information system can generate products as well as service depending upon industry it is developed for. In clothing industry designer clothes are produced based customer’s requirement. Here completed garments are product and custom design is a service. In internet banking, customer can accomplish the entire banking task, without visiting the bank. Internet banking, therefore, is a service.An information system can generate various types of services and products based on its design. An effective information system needs to satisfy customer expectation. An information system should provide product and service based on customer’s needs and requirements.
3. Business ProcessesBusiness activity consists of various processes. These processes include talking to customer, understanding her requirements, manufacturing product as per requirement, provide post sales service, etc. A business process may not be structured all the time and may not be formal. An improvement in the business process directly impacts business performance. An information system can improve a business process, by providing relevant information, increasing a step in business process or eliminating a step in a business process.
4. Communication TechnologyCommunication technology and computers are the central pieces of an information system model. Their presence is required to deliver efficient business process and customer delighting products and services. Infusion of technology within business creates win-win situations. Technology improves internal communication via email chat, etc. and improve external communication through website, webinar etc. Access to valuable information is quicker through information system, and this can provide a competitive edge in digital age.

Information system model highlights the pivot role information system plays in bringing efficiency in any work system.

Information and Strategy – The Virtual Value Chain

Information and Strategy

In today’s digital age information technology and information systems play an important role in success of organization. Information technology has challenged the way the business gets conducted. A company with superior product and service content become market leaders. There is a constant urge for the companies to provide a better and competitive content.

Organizations invest in research and development for superior content production, or they acquire/merge with companies. The purpose of acquisition is to either expand current product offering or add content as to provide end to end solutions.

Organization strategy can be devised using Porter’s Five Force model. Organization’s strategy should be to increase customer base and provide customized solution. Service also plays an important role in organization strategy. Service is the key factor in maintaining good customer relationship. Organization needs to devise a strategy which is convergence of technology, brand marketing, product innovation and world-class service.

Virtual Value Chain

A physical value chain consist procurement of raw materials, operations, delivery, sales and marketing and service. Information technology has changed the way we look at the value chain. Information technology has introduced concept of virtual value chain.

The components of a virtual value chain are as follows:

• Gather: Information age has helped digitization of information. Proliferation of information is higher than ever before. The internet provides data and information about markets, economies, government policies, etc. Companies gather information relevant to them as a first stage in the virtual value chain.
• Organizing: Information gathered in the first stage of the virtual value chain is in form of text, data tables, video, etc. The challenge in the second stage is to organize the gathered information in a way to retrieve easily for further analysis.
• Selection: In the third stage of virtual value chain, organizations analyze captured information to add value to customers. Organizations develop better ways of dealing with customers, product delivery, etc. using information.
• Synthesization: In the fourth stage of virtual value chain, organizations synthesize the available data. The data reaches the end user in the desired format.
• Distribution: The last stage of the virtual value chain is delivery of information to the end user. In a physical value chain, products are delivered to customers, in the virtual value chain this is replaced by a digital product. For example, digital movie streaming of movies compared to mail delivery of DVD. Therefore, today’s businesses are also known as information business.

Importance of Virtual Value Chain

The concept of a virtual value chain was devised looking at current internet penetration. It provides addition to existing value chain. Information technology helps in holistic view of physical value and making it efficient and effective.

Today’s information systems are capable of capturing information from every part of the value chain. This information is utilized to optimize performance at each stage. However, this information can also be utilized to improve customer experience at each stage. This enhanced experience can be through new product and services, thus generating more revenue to the company.

Introduction to Information Technology (IT) Strategy

Introduction: What is IT Strategy and Why it is Important

As the joke goes, A person who is sitting in front of a computer and not knowing what to do has been described as Intel Inside and Idiot Outside. Similarly, organizations that do not have an IT strategy in place are akin to clueless organizations adrift in the sea of the 21st century marketplace, rudderless, and directionless. Moreover, with technology becoming the norm rather than the exception, organizations cannot afford to simply have a basic IT strategy and instead, must actualize a comprehensive IT strategy that is aligned to their business and corporate strategies.

With the rapid spread of IT (Information Technology) and the increasing interconnection and connectivity in the contemporary world, having an IT strategy is no longer a luxury for organizations and indeed, it has become the very necessity for survival. This means that for organizations to harness the power of IT, leverage the synergies between their business processes, and capitalize on the efficiencies of the economies of scale, they need a robust, coherent, and proactive IT strategy. Further, with IT become ubiquitous, it is no longer the case that business strategy alone is enough and the alignment of the business strategy with that of the IT strategy has become paramount.

An IT strategy has been defined as the actualization of the plans, which consist of tactics, principles, and objectives concerning the use of IT within organizations. If we break down the elements of an IT strategy, the why, how, what, when, where aspects are the important components of an IT strategy. First, the organization needs to identify why it needs to use IT and then formalize a nuts and bolts plan on how it need to leverage IT. For instance, most business processes can be automated and those that cannot or need not be automated along with the practical implementation of the automation forms the what of the IT strategy. Next, the organization has to decide where it needs to deploy IT along with when the automation and the use of IT have to be rolled out.

After these elements are identified and codified in a written document that describes the operational details of an organizations IT strategy, care must be taken to ensure that this IT strategy is consonant with the overall objectives as well as based on scientific principles of technology. These objectives are related to what the organization wants from its IT strategy and dependent on the application of sound technology practices. Moreover, the organizations’ IT strategy must complement and supplement its corporate and business strategies and these cannot exist in isolation but instead must work in tandem.

To take some examples, if a bank wants to actualize an IT strategy, it must first define the objectives behind such a strategy. This can take the form of automation of 1000 branches in a year, the rollout of a core banking solution, which would be the foundation for the integration of the corporate, retail, and investment banking functions and their automaton, and then must identify the returns that it expects from such an IT strategy. The ROI or the Return on Investment of an IT strategy is very important, as the bank needs to have a clear plan, articulate, and justify the spending on IT, which would generate a return on its investment. In this case, the ROI can be expected to be a 10% rise in customer accounts, 20% rise in revenues because of handling higher volumes and processing more transactions, and a 15% cost savings because of lesser human effort as well as more rationalization of operations. All these figures should then translate into the percentage increase in profit that the bank expects from its IT strategy. Finally, it is also common for organizations to calculate ROI based on each dollar spent on IT and this can be the case with the example here of the bank which can actually note down all these figures and come up with a comprehensive IT strategy.

Typical Structure of IT Strategy

A typical IT strategy just like a corporate strategy must first perform an internal and external analysis, which would provide it with a guideline on the alignment between its strengths and opportunities and weaknesses and threats. Taking the example of the bank, it must identify the processes that can be automated and ensure that its strengths in the form of whether the bank derives its profits from retail, corporate, or investment banking arms justify the IT spend. This means that if it has say $10 Million to invest in automation, it must allocate this budget wisely so that it generates the needed return. Next, it must also introspect and find out whether automation and rolling out of IT systems would be consistent with its capability and capacity to raise the needed resources. The bank in this case cannot simply go in for an IT strategy if it is unable to come up with the desired amount for such an exercise.

Having said that, it must be noted that the primary reason why organizations go in for an IT strategy is to reduce the operational bottlenecks, actualize economies of scale, and derive value from technology. The bank should note these business drivers and rigorously apply them to the areas where IT can significantly add value. For instance, if the bank wants to expand its operations in Tier II and Tier III cities and towns and wants to automate its operations to enable real time systems that would benefit its customers, a good IT strategy can ensure the successful outcome for all these objectives. Thus, it would be able to meet the external challenges such as increased competition in these markets successfully.

Whereas the first paragraph in this section was about matching strengths with opportunities, the second paragraph dealt with reducing its weaknesses and dealing with threats. To complete the actualization of the IT strategy, the bank would then need to have a implementation plan in place and a time bound implementation replete with governance, milestones, and the roles of the CIO (Chief Information Officer) along with the assignment of responsibilities and fixing accountability have to be incorporated into the IT strategy.

Alignment of IT Strategy to Corporate and Business Strategies

It is often the case that organizations embark on an IT strategy without defining the benefits, the ROI, and without being clear of which business and which corporate function has to be automated. In other words, many organizations roll out an IT strategy without it being consonant with the overall business objectives. This results in a situation where the organizations’ IT strategy is clueless and directionless as an absence of an alignment with the corporate goals and objectives and a disconnect between business drivers and the IT strategy can lead the organization nowhere.

For instance, turning to the example of the bank, if it decides to extend its ATM network and expand it into all areas where it operates, the bank first needs to identify whether the business objective is clear and whether its corporate strategy of raking in more profits is in alignment with the IT strategy. In other words, just because the CEO or the Chairperson of the bank wants to be seen inaugurating ATMs and Bank Branches without a thought as to whether these would be profitable spells disaster.

Though you might think that this does not happen in practice, there are many instances where the CEO wants one thing, the CIO wants another thing, and the CFO wants something totally different. The point here is that just like the organization prepares a financial and operational budget that is aligned with its capabilities and capacities and is forward looking as well, the IT strategy must not be pursued in isolation but must be in tune with the business and corporate strategies. This is the reason why the IT strategy in most organizations has become part of the corporate planning department so that all the three strategies complement and supplement each other.

CONCLUSION

We have introduced the bare bones elements of an IT strategy. To wrap up our discussion, it would be pertinent to note that the CIO in recent times has become as important as the CEO because of the fact that a good strategy can significantly add value to an organizations’ bottom line as well as its competitiveness. A well thought out IT strategy can be a source of sustainable advantage as well.

Value Chain and E-Strategy – Components of Commercial Value Chain

Introduction

All companies undertake series of activities in order to deliver a product to the customers. These series of activities like procurement of raw material, storage, production, distribution, etc. are referred as value chain activities. The function of value chain activities is to add value to product at every stage before it is delivered to the customers. There are two components, which make value chain – primary activities and secondary activities. The primary activities are directly associated with the manufacturing of products like supply management, plant operations, etc. The secondary activities are referred to as support functions such as finance, HR, information technology, etc.

In the era of advanced information and communication technology, many businesses have started operations on the internet as its medium. Through the internet, many commercial activities like buying, selling, auctioning is taking place. This online commercial activity is known as e-commerce. E-commerce value chain has series of activities like electronic fund transfer, internet marketing, distribution channel, supply chain etc.

Value Chain and E-Strategy

Every activity within a physical value chain has an inherent information component. The amount of information that is present in activities determines, company’s orientation towards e-commerce. It has been observed that companies with high information presence will adopt e-commerce faster rather than companies with lower information presence.

For example, a computer manufacturer has high information presence, i.e. they can provide a great deal of product information through their website. Consumers also have flexibility to determine the product configuration using the website. Such computer manufacturers and companies with comparative business model are also likely to adopt e-commerce.

Activities which comprise of the value chain are undertaken by companies to produce and sell product and services. Some of the activities done within the value chain are understanding customer needs, designing products, procuring materials for production, production, storage of products, distribution of products, after sale services of products and customer care.

Understanding Information Presence

There are two ways to assess information presence. The first way is by looking at the industry, and second way is by looking at the product. In an industry with high information presence, it has been observed that:

• Industry will have large number customer base.
• Production process is complex.
• Order turnaround cycle is long.

For a product with high information presence following is observed:

• Product is simple to manufacture.
• Product has multiple functionalities.
• Product requires in dept end user training.

Industry and product which satisfy above conditions are likely to adapt e-commerce.

E-Strategy

Companies with high information presence were the first to look at e-commerce as an alternate way of conducting business. For example, software companies, much of there is business is done through the internet. Their website provides in-depth product information through e-brochure, video, client opinion, etc. Sales leads are generated online; purchase and fund transfer is done, and also after-sales service is done online.

These high information companies have made substantial investment in human resources and information/communication technology.

Challenges

Companies which are moving towards e-commerce need to have business model developed to support online activities. The dotcom burst of 2000 has served hard example about companies doing e-commerce.

Components of Commercial Value Chain

Introduction

The concept of the value chain was introduced by Michael Porter. The concept helps categories’ activities undertaken by enterprise to deliver a successful product to a customer. The concept since its introduction in 1980s has become a forefront in developing strategies around customer delight and commercial success. The value chain is series of activities undertaken by organization to deliver a product to end users. Here the concept does not apply to one single manufacturing organization, but it also applies to the players in the value chain. One of the purposes of the value chain is to understand activities, which add value during creation of the end product.

Value Chain

Enterprise undertakes several primary activities as well as secondary activities to deliver the final product to customers. Here primary activities are defined as activities, which directly support production of product or service. Secondary activities or support activities are activities which primary activities.

Primary Activities

Primary activities in the value chain are directly related with the production and delivery of the final product. The objective of these activities is adding value to product that is more than the cost of product. This will ensure that company can generate healthy margin and stay in business. Primary activities mainly consist of inbound supply chain, operations, dispatch, sales and marketing and service.

Inbound supply chain is made up of activities like receiving raw materials, storing raw materials and inventory management.

Operations consist of activities which convert different raw material into final product.

Dispatch activities consist of sending final product to distributors, retailers etc.

Sales and Marketing activities includes promotion of products to potential as well as existing customers, networking with channel partners etc.

Service consists of activities like solving customer issues before the sale of the product as well after sale of the product i.e customer care or customer support.

Commercial Value Chain

Commercial value chain is defined as any value chain used to achieve its organizational goal. Every company in any given industry will have its own value. However objective all the different value chain is to add value chain at every stage till product is delivered. The value chain of business includes activities:

Potential Customer Attraction and Existing Customer Repeat: For online business it is very important that they are able to generate visitors for their website. This will ensure customers are aware of available products and pricing. Companies also want to ensure that website is able repeat customers also.

Customer Interaction: Website design and navigation should ensure that potential buyers are able to reach the required web page. Another option available is customers entering their requirement and website displaying potential products.

Order Processing and Payment: Once a potential buyer has selected the product, website should be equipped to display other product similar to purchase or pop a question whether customer would be interested in making another purchase. Purchase order should also highlight possible shipping date and number of days before product will arrive. After purchase transaction, the next important step is payment through secured fund transfer.

Order Delivery and Customer Care: Website should be able to provide online tracking of the product; it should also provide details about possible delays. Website should be equipped to solve any queries online through frequently asked question, email support etc.

The Quantitative Approach for e-Strategy – Seven Dimensions of e-Commerce

Introduction

The way business or commerce gets conducted has undergone a great deal of change due to the advent of information and communication revolution. In the last two decades or so there has been a phenomenal growth in e-commerce. Electronic commerce or e-commerce consists of buying selling and auction of various products and services through an online medium such as the internet. The payment of transaction is done through a secure online payment system. All or majorities of today’s companies either have websites or conduct e-commerce. In such a scenario, it becomes very important to have well defined business model and formulated e-commerce strategy.

E-strategy Formulation

The two very important factors which determines a successful strategy is customer requirements and commercial scalability. Without either, business will fail in its venture. Customers expect superior quality in product and service they purchase. For e-commerce, quality means easy negotiable website, secure transaction and web-site management.

For companies to develop and manage e-commerce sites, it has to invest in manpower and technology. E-commerce sites consist of complex software and hardware structure. Companies make a choice for technology to run its site based on cost-benefit analysis and project scalability.

Therefore, it is important for companies to undertake a quantitative approach towards e-commerce.

Seven Dimensions of e-Commerce

A successful e-commerce strategy model consists of organization structure policy and positional structure policy.

Organization Structure

Organization structure is building block of successful strategy. It consists of leadership, infrastructure and organizational learning curve.

A successful strategy starts with vision and mission statement. This vision comes from corporate leadership. Corporate leadership should keep open mind about prevailing new technology and should be flexible in changing strategy to tune with an ever-changing world.

Another building block of successful strategy is technology infrastructure. The technology infrastructure has to be adaptive to constant innovation and requirements throughout the organization. The technology infrastructure needs to be cost effective, secure and manageable.

The last important portion of organizational structure is organizational learning. Organization needs to maintain and encourage culture of organizational learning. This prepares company for adaption of new strategy and introduction of new technology.

Organizational Positioning

The second important factor of e-strategy is the organizational positioning in technology, brand, service and market.

Technology leadership provides companies the competitive advantage. Therefore, it is important to identify emerging trend and invest in that technology solution.

The internet has provided an alternate medium through which an organization can benefit in brand development. People are logging onto the internet more than ever. This has provided golden opportunity for organization to reinforce it brand leadership or create brand awareness.

Another dimension of successful organization positioning is service leadership. Service includes providing customer with delightful experience in pre and post sales scenario. Delightful service does not translate into revenue immediately, but helps in building relationship, creating brand awareness and creating brand ambassadors.

Organizations have managed to achieve phenomenal growth using the internet. They have assessed market conditions preemptively and responded by providing correct market offering.

Clearly from above in the current business environment, it is important to acknowledge importance of e-commerce and prepare a strategy which provides an organization competitive.

The Marketing Function – Market Environment, Marketing Cycle and Components of Marketing Information System

Introduction

The role of information technology and systems is to improve productivity of organization. Information systems are deployed across functional department of organization.

The Marketing Function

In broader terms, marketing is defined as a process through which organizations are able to deliver products and services as per the need of the customers. Organizations conduct market research to identify needs and requirement of customers.

The marketing process ensures the following:

• It ensures that customers are able to buy the products they want.
• It ensures that producers are able to sell products in a free market.
• It ensures a stable financing is available to conduct production.
• It ensures that perishable goods are stored in an appropriate manner for consumption.
• It ensures that products are transported to all customer markets.
• It ensures that quality standards are always maintained.

The Market Environment

The market environment directly impacts the function and working of an organization. The 3 categories of market environment are internal environment, micro environment and macro environment. Organizations develop strategies as to be successful in all three environments.

The culture and environment of organizations play an important role in delivering value to customers. Internal customers of organization are the ones which contribute in delivering the final products. Organization needs to look at strategies to motivate internal organization to satisfy external customers.

Internal customers, suppliers, etc. combine to make the micro-environment of an organization. Organization to deliver a good final product needs to develop and maintain strong relationship with vendors and external agencies. Therefore, it is important for organization to maintain continuous analysis of ever-changing micro-environment.

The macro-environment of an organization consists of government policies, global economic condition, and political stability. Organization does not have direct control or say in the macro-environment.

The Marketing Cycle

The marketing cycle is closely associated with the product life cycle. The marketing life cycle is divided into development stage, introduction stage, growth stage, maturity stage and decline stage.

Companies deploy different marketing strategies during each stage of marketing life cycle. These strategies are closely associated with revenue generation from product sales.

Marketing Information System

An information system which captures, stores, analyzes and distributes marketing information to facilitate the decision-making process is called marketing information system.

The source of marketing information comes through internal records and external records. The internal record includes day to day production data as well as product sales data. Internal data helps manager track marketing impact on the different product mix.

External data is market performance of a competitor also plays important in the decision-making process. Company’s sales force is a huge data source. Therefore, it is essential for system to capture their market intelligence input.

The data collected through external or internal market research agencies plays an important to provide a holistic market view to the managers.

An information system captures information from all the different sources. The information is analyzed and then distributed to managers for decision-making process.

Marketing information systems advantages is as follows:

• It helps organizing data from different sources at one location.
• It helps in development and tracking of marketing plans.
• It helps in manipulation data as per management requirement.
• It facilitates historical analysis of marketing data.

Marketing Channel Systems

Introduction

The last two decades have changed the way business is getting conducted. Some businesses are still using traditional channel systems but advent of the Internet has revolutionized distribution channels. Companies are changing business models to leverage Internet advantage.

With open proliferation of information, customer expectations are reaching new heights. Companies need to figure out the right channel mix with multi channels’ strategies. From a manager stand point marketing channel is defined as any external agencies, which facilitate distribution of products and services.

The marketing channel is one of the key drivers for strategies around the marketing mix, i.e. product, price, place and promotion.

Channel Flow and Structure

The channel flow is a flow which relates different agencies involved in the distribution of goods and products.

The channel structure is referred to as the combination of different channel members in achieving organization’s marketing mix strategy.

Channel Participants

The marketing channel consists of various players like manufacturers, producers, wholesalers and retailers. Manufacturers and producers develop their own marketing channel to reach the end user. However, not all manufacturers have the expertise in managing channel participants. Therefore, they need wholesalers and retailers for distribution of goods.

There are three types of wholesalers; merchant wholesalers, agents and producer’s branch offices. Merchant wholesalers usually have good capacity of storing and managing goods. In contrast, agent works as middlemen for producers and end users. Retailers are responsible for selling goods and products to end users.

Importance of Channel Participants

The major role of channel participants is to make the distribution and selling of goods and products efficient. Intermediaries provide manufactures opportunities which for them financially would not be feasible. Intermediaries provide greater market exposure, market intelligence, economies of scale and operational knowledge.

Managing Channel Conflict

Conflict among channel partners adversely affects the distribution of goods and products. It is important for the channel managers to understand the nature of conflict and come with solution, which strengthens the distribution network.

However, all issues in the channel cannot be considered as a conflict. The channel manager needs to assess the frequency of disagreement, level of disagreement and importance of issue.

The top three reasons for an emergence of conflict among channel partners are as follows. The first reason is the different business objectives of channel partners (producers, wholesalers and retailers). The other reason is a narrow vision of each channel partner, i.e. they do not view channel on whole but only at their level.

Conflict between the channel partners can be resolved by improving communication among themselves and also with producer. Another way of solving conflict is by directing all channels to a single objective of creating customer delight.

Multi Channel Marketing System

Multi channel marketing system has become a prominent way through which goods and products are delivered to end users. The multi channel system enables the companies to deliver goods and products to end users as per their preference. The delivery of goods can be through store, website, mail order, etc.

Franchise

Another innovation in the marketing channel system is the franchise. Franchise enables brand recognition, standardization of operation structure, access to learning curve and less financial investment.

Sales Support System

Introduction

Sales support systems were developed to assist the sales force in improving productivity. This improvement in productivity was through continuous communication with the field offices about customer activities and requirements. The sales force focus was on cultivating long and fruitful customer relation.

Before the advent of information system, customer-related information was recorded in individual sales representative’s personal books rather than on a centralized data center. This meant that the customer information would be lost with movement of sales representative.

Therefore, to preserve and utilized customer relation and improve performance of sales force, sales support system was developed.

Sales Support System

A sales support system can be divided into:

• Sales Activity Management
• Sales and Territory Management
• Contact Management
• Lead Management
• Configuration Management
• Knowledge Management

Sales Activity Management

This module of the sales support system looks at offering calendar based activities to plan and coordinate meetings with customer relationship accounts. The module looks at consolidating team activities for a given period of time. The module provides in-depth analysis of the historical and current sales cycle.

Sales and Territory Management

Sales force racks up into team member and team member into the sales manager. Therefore, sales manager has to monitor activities of more than one sales team. This module helps sales manager generate reports, which provide data point around current sale activities performed by the different sales team. This module helps sales force connect with various product specialists based out of various sales office locations. Territory-wise pipeline management becomes easy for the sales manager.

Contact Management

One of the important needs of sales force and sales team is management of various contact points across different organization. Contact management module should be able to organize contact across current and potential client organization.

Lead Management

Sales force work relentlessly to generate a sales lead. Lead management module provides management of leads, which come through marketing campaigns and referral management. This module also tracks characteristics of each lead as to highlight other possible leads.

Configuration Support

Every organization has distinctive and varied product requirement. It is important for the sales force to have ready access to different product configuration and associated price. This module facilitates configuration support.

Knowledge Management

The modern information system can hold large volume of data, which can be effectively converted into information.

Advent of the Internet has simplified sales force access to centralized databases. It helps sales force stay in touch with each other as well as sales manager. Availability of the Internet has reduced the cost of managing communication. Mobile devices have further contributed to proliferation sales support system.

Post Sales Service Support

Another aspect of sales is after sales product support. Organizations have on-site or field service staff. The Internet has made field service management possible on a real-time basis.

Sales Support System & Customer Relationship Management

Sales support system enhances productivity and efficiency of the sales force. The sales force remains aware of development around the potential clients on a real-time basis. This increases probability of closing a sales deal. The productive sales force not only increases market share but also improves profitability of organization.

Information System in Retail Sector

Introduction

An important element of the supply chain is the retail. Retail is the place where the products and goods are sold to the end users. Retailer purchases goods and products from producers in large quantities and in turn sells them to consumers in smaller quantities.

Information Flow

It is very important for the retailer to communicate with the supplier as well as the consumer. From the producer, the retail should know the following:

• Retailer should know when a new product is getting launched or whether the producer is introducing a new variant for the existing product.
• Retailers should get a regular training from the manufacturer about brand new products and fresh technology.
• Retailer should have information well in advance about any impending pricing change.
• Retailer should also know about sales forecast from producer for given line of product.

Consumer is also as important for the retailer as the producer. From the consumer, the retailer should know the following:

• What attract the consumer to a particular retailer?
• What are good and bad points about a particular retailer?
• How did they hear about a particular retailer?

Retail Management Information System

If the retailer is on top of above information, then he would be able manage his business efficiently. In the current scenario, large retailers have their shop across physical geographies. For them, it becomes very important to centrally manage all shops. Retail management information system precisely does this with help of hardware, software, database and various modules.

Objective

The objective of the retail information systems is as follows:

• An information system should provide relevant information to retail manager regularly.
• An information system should anticipate needs and requirement of the retail manager.
• An information system should be flexible enough to incorporate constant evolving needs of the consumer market.
• An information system should be able to capture, store and organize all the relevant data on a regular and continuous basis.
• The retail Information systems should be aligned with strategic and business plans of the organization. Therefore, it should be able to provide information, which supports and drives this objective.

Characteristics of Retail Information System

The retail information system should have following characteristics:

• Retail Information systems Information systemsRetail Information systems should connect all the stores under the company’s
• Retail information system should allow instant information exchange between stores and management.
• Retail information system should handle the various aspect of product management.
• Retail information system should handle customer analysis.
• Retail information system should allow the store manager flexible pricing over a financial year.

Role of Retail Information System

Retail information system should support basic retail function like material procurement, storage, dispatch, etc. It should allow the manager to monitor sales of product mix and daily sales volume. An information system should help in inventory management.

Variety of Retail Information System

Retail information system is applicable to different types industry within retail management. An information system can be developed to manage fashion store, pharmacy, a grocery store as well as a toy store.

Retail Sector

Technology is and will play an important role in the Indian retail sector. Various groups in organized as well as the unorganized sector has taken to IT for supporting this growth.

Information System for Recruitment and Selection

Introduction

Human resource is one of the pillars which defines a strong and successful organization. Workforce is the backbone of any organization and form integral part of its strategic plans and initiatives.

Recruitment and Selection

Recruitment and selection are two of the main function carried out by human-resource department. An organization undertakes recruitment under following circumstances:

• If the organization is implementing business expansion plans. This expansion may be in line with an increase in sales. Company may be looking forward to exploring brand new markets or coming out with new products.
• If there is attrition within the existing workforce. This attrition could be that existing employees are moving to other employers or changing industry or employee has some personal reason like sickness, maternity, etc.
• Organization also undertaken recruitment if they require employees with a specific skill set which they currently don’t have.
• If business is changing base of operation. In such case many employees may not prefer re-locate hence the need for recruitment.

Change in Employee Mix

The current workforce is constantly evolving with regard to the employee mix. Organizations are moving more and more toward temporary employees. Furthermore, there is an increase in single parent employees. Women as percentage of workforce have as well significantly increased. Human-resource manager needs to be aware of these changes and develop a recruitment process accordingly.

Recruitment Management System

Every Human resource department has a team to manage the recruitment and selection process. Information systems have made it possible for companies to have a dedicated tool which helps in organizing the complete recruitment and selection process.

Recruitment management system greatly enhances the performance of recruitment process and delivers efficiency to the organization. The key characteristics of the recruitment management system are as follows:

• Organize the whole recruitment process in a well-defined and manageable manner.
• The system enhances and facilitates comprehensive, reliable, faster and precise online application management.
• The system reduces the overall recruitment time cycle, thereby reducing cost for the company.
• The system consolidates online application, outside recruitment agency process, interview stage, etc.
• The system stores all the applicant information within the database as to facilitate faster future requirement processing.
• The system facilitates a user friendly interface between applicant, talent acquisition team and online application link.
• The system has various tools to improve overall productivity of the recruitment process.

Selection

Selection is a process through which candidate’s qualification and job’s requirement are matched as to establish suitability for the open position. The selection needs to have structured and definite process flow.

Selection process consists of various steps like interview, aptitude test, interaction with hiring manager, background verification, job offer and job acceptance.

Recruitment and Selection

Recruitment is a process in which there is search for potential applicants for various open positions, where as selection is a process in which candidates are short listed based on their potential.

Employee recruitment and selection are building block of any successful organization. In recent years, information system has played major role in driving efficiency in the process through standardization and process evolution.

Information System for Training and Development

Introduction

A successful organization is built on satisfied and trained employees. They are the company’s greatest assets. Employee development is defined as formal education, on-the-job training, previous job experience, personality mapping, and improvement in the current skill sets as to prepare the employee for future.

A trained and developed staff will contribute to productivity increase, improved profitability and significant increase in the market share. Therefore, it is very important for companies to design and maintain efficient training/development systems for employees.

An employee development system consists of induction, training, development, periodic counseling, performance appraisal and career management. This system is deployed to ensure that employees are able to perform the task they have been hired for and are competent to make career progression along with it.

Training and Development

Training and development are different from each other. The focus of training is short term while for development, it is long term. The utilization of work experience is low in training and high in development. The aim of training is preparation for current assignment while development looks at upcoming assignment. Employee participation is voluntary in training while it is mandatory in development.

Importance of Training and Development

An employee development system ensures alignment between employee’s potential and organizational expectation. There are various approaches to ensure this alignment. The 1st approach is to inform an employee about his expectation and his progress towards the goal. The 2nd approach is to improve the employee’s ability through continuous training. The 3rd approach is to assign responsibility to each stakeholder in employee’s development and make them accountable.

The aim of employee development is not only to make them progress in their career but also to train them as per company’s requirement.

Training and Development System

The key features of training system are as follows:

• Training management systems is developed to ensure that all training requirements of organization are effectively managed.
• Employee management modules of the system help manager design and develop a training calendar as per the employee’s requirement.
• Employee management module automatically prepares a list of employees as per upcoming development sessions.
• Employee management module also helps in preparing the progress sheet for employees.

The development system is not only restricted to online tools but also includes various policies and procedures. The comprehensive development system helps the coaching staff continuously asses’ progress of employee but also effectiveness of the development session. The development system consists of software, hardware and company’s development policies.

Employee Development Tools

Employee development tools are also important part of training management system. 360-degree feedback system helps to improve employee performance by gathering feedback from various sources like peers, managers, customers, colleagues, etc. The feedback is anonymous in nature and should be used as a developmental tool rather than as an administrative tool.

Companies should identify high-performing development system before investing in it. They should continuously strive to improve developmental systems. They are possibilities that exiting system, session and procedure may become monotonous in long term there by affecting employee motivation.

One of biggest employer fear is that post training employees would look for employment change and hence they do not encourage training. Though this concern is valid in some cases, but overall it has shown that trained employee show better motivation level and loyalty.

Employee Relationship Management (ERM) through Information System

Introduction

Employee relationship management is management of relationship between employees and employers. It is made up of initiatives which improve employee morale and loyalty towards the company. Employee relationship management approach looks to maintain effective relationship through three way approach of continuous communication, conflict resolution and employee development.

Importance of Employee Relationship Management

Employee is crucial and critical for overall progress of an organization. Employer-employee is very complicated association and at times strenuous to manage. Employee relationship management is much difficult compared to customer relationship management. For example, if the customer is not satisfied with the association with a given company, they can move on to another company. However, if the employee is unhappy with an employer, there are possibilities that he will continue his association with company. However, this employee-employer relationship will not be fruitful and convenient for both the parties.

If employee and employer are in cordial relationship and then overall efficiency and competitiveness of the company will improve. An improvement in relation can result in employee with high morale, which will increase his/her or her loyalty towards the company. If there is an increase in the loyalty employee turnaround is possible and corresponding communication can be established.

Information System and Employee Relationship Management

In the last decade or so information systems have changed the face how business gets conducted. Information systems are actively used to improve productivity of organization. In employee relationship management also information systems are actively used.

Following is example information system’s usage in employee relationship management:

• The current payroll systems are linked with an information system which ensures that employee are getting timely as well as accurate salary.
• Online learning and development tools can easily be managed by employees.
• Information systems facilitate leave, tax, and insurance management of employees.
• Performance appraisal and individual development management are done online with help information systems.
• Employees are aware of the latest development within the organization through access to Company’s blog and news board.
• Executive management of the company can communicate directly to staff through email.
• Online staff meeting brings together employees from all parts of the world.

Employee Relation Life Cycle

Employee relation life cycle starts as soon as talent is shortlisted for an interview. Post hiring process employee undergoes training to become a full time contributing team member. Over time with involvement in projects and various other association employees is considered as a family member. Finally, employee reaches the stage of the brand.

Factors Influencing Employee-Employer Relation

There are several factors, which drive employee employer relation. The correct management of this factor creates long-term and fruitful association for an employee as well as the employer. For example; compensation, work culture and environment, rewards-recognition, etc.

Every organization has its own work culture and environment. Any job within organization requires a certain skill-set. Human resource team along with hiring manager scout for talent and hire an employee. Companies invest time and resources for training employee. This training in turn enables an employee to excel and help the company meet its business objective. For this whole process to reach the desired end, it is essential healthy employee-employer relationship is maintained. Information systems contribute a lot to this success.

Information System for Talent Management

Introduction

Information technology and system have changed the way business gets conducted. Every decision-making process is enhanced with utilization of an information system. Information systems have been deployed by human-resource team to enhance employee employer relationship.

Companies require great deal of contribution from employee for its success though information systems have made several processes automated.

Talent Management

Talent management and human-resource management are completely two different fields, although the human-resource team is responsible for talent management.

Talent management is organization focus towards complete management of recruitment, retention, development of brightest talent available. The focus of talent management is to attract best talent in the market and convert them into efficient and effective work force. Talent management team is responsible for hiring, maintaining and retaining the best talent.

Talent Management Evolution

Talent management finds its roots in earlier workforce management and human management concept. Earlier concept saw intervention of human resource in managing and retaining talent. However with talent management, this responsibility is transferred to manager.

Talent management empowers manager to take upon greater responsibility. The manager is actively involved from talent acquisition, recruitment process, retaining and development of the employee. Organizations have their own approach towards talent management. Certain organizations include only their star performers as part of talent management, whereas some organizations consider all staff within talent management.

Talent Management as a Strategic Tool

Talent management is actively used by organization as a strategic tool. Companies need to blend talent management with business strategy as to boost employee management activities. The onus of attracting and managing the best industry talent is on the respective managers.

Organization needs to develop a process through which employee talent can be recognized and shared. This would enable best utilization of talent across the organization.

Employees are encouraged to manage their individual development plan.

Talent Management System

A talent management system is an information technology solution to manage four corner points of human-resource management:

1. Recruitment,
2. Performance management,
3. Learning-development management and
4. Compensation management.

The existing enterprise resource planning systems are focused on employee transaction such as payroll, leave management, etc. The talent management system looks at providing human-resource solution for long-term strategic goals.

The key features and development history are as follows:

• Talent management system became a reality with the advent of client/server technology. It was now possible to electronically manage applicant base important for multi-national companies. The Internet and data analytics also helped the development of the talent management system.
• Talent management system became important to manage high-performance work environment, reduced top management attrition, increase employee satisfaction, create talent pipeline, and develop better compensation models and creation of uniform performance measure metrics.
• The two driving points of the talent management system are recruitment and retention.

An organization needs to align its business strategy with human-resource strategy to develop and manage effective talent management system. A development of the talent management system requires the following:

• Finalization of various competencies around which future development of an employee is to take place.
• Creating of a human-resource model to rank and stack the existing workforce.
• Examine the current human-resource process to identify the developmental areas.
• Develop tools to increase existing talent pool.
• Pro-actively identifies future skill set requirements and manages the talent pool accordingly.

Information System for Knowledge Management

Introduction

Knowledge is very important for survival of organization. Historically, employees have gathered knowledge through trial-and-error method or by working as an apprentice under a tenured knowledgeable employee. Management guru Peter Drucker forwarded a concept that knowledge is as valuable as a company’s various asset like plant, machinery, etc.

Importance of Knowledge Management

Knowledge provides a competitive advantage to an employee as well as the organization. The data and information which come with knowledge help organization make an informed decision. For example, knowledge about competitors pricing model or business strategy can help organization work towards bettering the competitor. Historical data e.g sales data, pricing data, etc. can help organization improve existing or proposed business initiative.

Knowledge management is a highly iterative process which consists of six major tasks like create, capture, refine store, tag and circulate. The first step is to create or capture data and store it at appropriate location. The second step is to refine the data into meaningful information. The third step is to transmit information to relevant stakeholders.

There are two types of knowledge, which need to be capture as part of knowledge management. The first type is hard data in terms of numbers and figures. The second type of knowledge is the interpretation of data captured based on experience. The real need of the knowledge management system is to provide access to the knowledge base whenever required.

Knowledge Management System

The systems develop to capture, create, refine, tag and circulate information used to improve business productivity of the organization. There are three broadways of managing the knowledge system. The 1st way is utilization of information technology and systems to improve business efficiency. The 2nd way is utilization of organizational method to improve business efficiency. The 3rd way is creating a healthy workplace to facilitate improvement of business efficiency.

Structure

The structure of the knowledge management system is dependent on the business strategy of the organization. The final structure needs to have alignment of technology, organizational structure and work culture.

Types of Knowledge Management Systems

Based on structure and requirement of organization, there are several types of knowledge management systems. Some of them are as follows:

• Expert SystemsThese are knowledge management systems developed to facilitate a Subject Matter Expert. This module provides knowledge of different subjects.
• GroupwareIn the current global scenario, team members are spread across regions. However, it is important for them to collaborate on various projects. Groupware is a knowledge management system which helps in sharing calendar, project activities and instant messaging.
• SharePointIt is important for team to store various documents at a single location. SharePoint enables a user to store multiple version of the same document, helps a user search through folders for document, etc.
• Decision Support SystemDecision support system helps floor managers; Sales Manager, CEO, etc. take decisions to finalize business or operational strategy. Decision support system comprises of primary data as well as secondary data. Decision support system enables editing of data and converts it information in the desired format.
• Database Management SystemKnowledge management systems which support active storage and retrieval of data are known as a database management system.

Employee Portal for Human Resource

Introduction

Information systems have revolutionized the way businesses get conducted. It facilitates automation across departments. Information systems are getting actively used by human-resource team. Most of Human-Resource activities are done through online or web-based portals. This web based portal help employee or HR team member access data from anywhere in the world or from remote locations.

Employee Portals and Human Resource

Human-resource team undertakes functions like talent hunting, selection, recruitment, performance management, compensation management, payroll management, etc. Advent of information technology and system has facilitated the development of portals, which can help the human-resource accomplish its task in a much quicker and efficient manner.

Employee Portals

Employee portals for human-resource department undertake different tasks some of them are as follows:

1. Employee InformationDuring the employee on-boarding process, information pertaining to an employee like name, address, previous work experience, pension details, insurance details, etc. are entered in a central database, which remains in place until the employee maintains their employment. Portals have the flexibility to edit certain information as and when required.
2. Timesheet ManagementEmployees are required to fill their timecard on daily, weekly, fortnightly or monthly basis depending on the nature of employment. Portals are available in which employee can directly input the information. Portals are flexible to incorporate holiday schedule depending on country or location.Timecard on submission goes to the manager for review or approval. Portals also allows employees’ to manage their leaves information.
3. Compensation ManagementHR utilizes portals actively manage compensation for an employee. Past and current compensation data from the employee is stored in the compensation management tool. Payslip is electronically generated, and the payroll tools let an employee view their current and past payslip details.Based on compensation received or to be received in a given financial year, tax calculations are made visible to an employee as well as payroll department.
4. Appraisal Management and Employee DevelopmentHuman-resource team utilizes online portals for appraisal management. Employees are required to enter their annual plan onto portals, which are reviewed by managers and HR manager. During the end of the year, assessment, managers enter employee performance onto this portal. This appraisal portal is utilized for further calibration process of various team members as to assess their performance.Employees are also encouraged to develop their individual development plan, which encompasses short term and long term goals. Employee than are asked to chart out activities, skill required to achieve long term as well as short term goals.
5. Employee ExitWhen an employee decides to leave organization, there are several formalities, which need to be completed. These formalities are required from the employee as well as from employer side. Exit Tools are used by human resource to accomplish this task. It helps the employer as well as the employee has a smooth and risks free exit process.

Information technology, systems and global environment have facilitated the development of several portals, which are extensively used by human-resource department. These portals have streamlined various processes which before were time-consuming and exhaustive. Portals have enabled organization control over employee-related activities.

Information System for Decision Support

Introduction

In the current globalized business environment, decision making is becoming more and more difficult. Some of the problems faced by business are as follows:

• There is large volume of internal organizational data on hand thanks to the modern data-storage system. However, not all data available would be useful for decision.
• The flow of information over the Internet is increasing daily. Decision makers need to keep a tab on latest information available on the Internet.
• More and more business transactions are done online. Proliferation of e-commerce has created opportunity as well as challenges for decision makers.
• Multi-national companies are faced with scenarios where decision makers are spread across the globe. Every decision maker would bring his or her own perception during team discussion. Thus reaching a decision through consensus make become difficult.

Challenges in Decision Making

In today’s corporate environment, there is encouragement for diverse and inclusive work environment. Therefore, employees come together from a different background to achieve a single organizational goal. However, to achieve this target several decisions need to be made. And a good decision-making process will encounter challenges.

Some decision may be stalled due to lack of experience, in particular, area of operations. Sometimes it is difficult to pin-point pain areas and fresh pair of eyes would be required to highlight the problem. Often past experiences stop us from making a decision.

To overcome such challenges it is important to develop decision support system, team decision support tool and executive information system.

Decision Making Process

Simon’s decision-making process identifies three main steps – intelligence, design and choice. During the intelligence stage, the current business environment is scanned to identify the problem. Once the problem is identified, it needs to be considered whether the decision maker is capable of handling the problem. Investment in time is required to develop complete problem statement.

Based on information gathered, a decision model is developed, which can solve identified problems.

In the choice phase, various solutions proposed by the model are evaluated and examined. Feasibility study is carried out if the solution can be implemented in the current business scenario.

Decision Support System

Decision support system consists of three main parts – data management system, model management system and user interface.

Data-management system contains primary as well as secondary data. This data is then fed through a model management system. Model management system will carry out simulation analyst, What-If analysis, etc. and pass on the result to end users in form of data, chart, sheets, etc.

Group Decision Support System

Some decision-making process requires group involvement. Group decision support system includes tools like brain storming tools, idea ranking tools, etc.

Executive Information System

An information system designed to facilitate top level management undertake a strategic decision is called executive information system. Executive Information systems contain both primary as well as secondary data.

The information system provides summary of information in a required format. The information system also has drill through facility to see the 2nd and 3rd tier of data.

Working Capital Management

Introduction

Businesses require adequate capital to succeed in business environment. There are two types of capital required by business; fixed capital and working capital. Businesses require investment in asset, which has to be utilized over a longer period of times. These long-term investments are considered as fixed capital, e.g. plant, machinery, etc.

Another type of finance required is short term in nature. This short term finance or capital is required to undertake day to day operation. Such short capital is called current capital or working capital.

Working capital refers to company’s investment in short term asset such as cash, inventory, short term marketable securities and account receivable.

Information technology is playing a big part in today’s working capital management. Several aspects of working capital management like the cash management, inventory management, account receivables/payable management, etc. are managed through enterprise resource planning modules.

Cash Management System

The cash management module within the working capital management system should be fully integrated with other modules like account receivable/payable, payroll and general ledger. The main features of cash management tools are as follows:

• The module tracks complete audit trails of all transactions and adjustment for controls.
• It highlights current and future balances for all cash accounts.
• The module has the capability for complete drill down to the source of all transactions.
• The module provides full bank reconciliation.
• It allows export of information for analysis, forecasting, presentation, reports, etc.

Inventory Management System

Inventory management and control module is utilized by companies to avoid product overstock and outages. There are several components of an inventory management tool such as order management, asset tracking, product identification, etc. The main purpose within the inventory management system is to reduce the overall costs of carrying. An inventory management tool helps in:

• Sustain a balance between too less and too much inventory.
• Track inventory between locations.
• Track inventory been received at warehouse.
• Track product sales and finished goods inventory.

The main advantage of an inventory management tool is cost savings, increased efficiency, warehouse management, etc.

Account Receivable Management

An account receivable management tool helps solve critical question like when payment is due, how much payment is due, etc. The main features of account receivable tool are as follows:

• Permits transfer of account receivable information for analysis, forecasting, presentation, reports, etc.
• Maintain complete customer information, including sales history, current balance, open deposit, last payment, etc.
• Minimize data entry errors and permit print invoice, credit memos, debit memos, etc.

Appropriate credit policy is essential to maintain the cash flow cycle and return on capital.

Short Term Financing

Another important aspect of working capital management is short term financing. The short term financing tool based on cash flow cycle, inventory position and requirement helps in deciding the quantity of capital required. It also helps identify the term of financing and track payment.

Working capital management decision directly affects day to day business operations. One of the such factors is the cash conversion cycle which immediately affects the liquidity of the organization.

Financial Analysis and Planning

Introduction

Financial analysis and planning are one of the fundamental activities and responsibility for the finance department. Financial analysis and planning help an organization in achieving strategic tasks and objective within available resources. The key responsibility of financial analysis and planning team is facilitate management in formulating short and long-term objectives, carrying out cost-benefit analysis and ensuring targets are met through periodic reviews. Another responsibility is to ensure that management’s actions create profitability for organization by providing relevant financial information. Financial analysis and planning are essential divided into four parts forecasting, budgeting, reporting and analysis.

Information technology and systems have made a big impact on financial analysis and planning. The advent of databases and modern analytics tool have smoothen the whole process.

Forecasting

The first major step in management planning is formulating future sales strategy and assessing the financial requirements to execute that plan. Organization needs to analyze the current and future internal business scenario as well as external developments, which impacting the business.

Forecasting tools such as Hyperion Planning Tool is apt in helping organization achieve this task. Forecasting module of the tool provides information happenings of previous financial years, broken down various cost elements. This provides organization with a trend with past results.

Budgeting

The second major step is budgeting for management objectives. After analyzing the past trends, organizations are able to asses’ trend of expense within various cost elements. The next step is to expense all the cost account on a monthly basis. This will bring about financial requirements of organization for given financial year.

For example, Hyperion Planning Tool’s budgeting module facilitates organizations to enter financial information on a monthly basis in all relevant cost accounts. It creates a scenario of financial requirement for the given year.

Reporting

The third major step is reporting financial information at every end of the month. Essentially reporting can be defined as providing financial information for decision making at a periodic interval of time. Financial reporting could be for internal stakeholders’ as well external stakeholders. The internal stakeholders could be the business owners and the management team. The external stakeholders could be investors and financial institution.

For example, Financial Data Mart kind of system pulls in information from different payroll, accounting and payables/receivable modules to provide accurate monthly financial information.

Analysis

The fourth major step in financial analysis and planning is the analysis part. When there is over spend scenario, we need to analyze what is causing overspend, which factors are driving over spend. A further analysis needs to be done whether factors driving over spend can be controlled or not.

Financial analysis requires studying of liquidity, profitability and long-term sustainability. Financial ratios play an important role in financial analysis. Financial ratio analysis module helps in creating analysis about financial performance of company and compare with organization within the same industry. Module has templates for current ratio, production costs, cash conversion cycle, etc.

Financial analysis and planning function comes within the purview of the chief financial officer. Hence it is important to develop financial systems, which support executive decision also.

Strategic Finance – Meaning and Important Concepts

Introduction

For an organization to succeed in the global and competitive world, it needs to have a robust strategic plan in place. The strategic plan is made of several definite targets it aspires to achieve. Some of the targets are internal (Productivity improvement, sound finance discipline, etc.) as well as external (EPS, Stockholder value, etc.). Therefore, organizations strategic consist of long-term planning, organizational development, treasury management and value management.

Financial Planning and Forecasting

Financial planning and forecasting are integral part of strategic finance. Organization needs to develop strategic finance tools, which can take into account scenario analysis as well as modeling capabilities. A strategic finance tool should help in quickly developing finance models and evaluate various financial scenarios. These financial scenarios can suggest sophisticated debt and capital structure management. Strategic finance tools should be connected to enterprise performance management tools as well as other databases. A strategic finance tool should provide a convincing finance solution which further can be used to set internal targets, perform financial analysis and provide data to perform informed decision making.

Strategic Finance and Strategic Planning

Organization requires a robust and flexible finance tool to analyze ever evolving financial and business market. The finance tool should be capable of doing what-if scenario modeling. It should also allow development of finance models, which can be used to carry our impact analysis based on dynamic variables and reach targets, which can be assigned to other departments.

At present, most of the finance modeling is done through spreadsheets. However, these spreadsheets are somewhat difficult to manage, lack data integrity and do not integrate with other aspects of finance modeling like strategic planning and treasury.

Business Intelligence

Strategic finance module helps the organization in the sensitivity analysis as well as what if analysis allowing to gain deeper understanding of various strategic scenarios and develop business intelligence. Since the strategic finance tool is integrated with other business modules all possible disconnect between strategic targets, and operational plans are analyzed.

Complete Finance Modeling

Finance modeling provides insight into impact of strategic decisions on company’s bottom line, cash flow, balance sheet and shareholder value. Strategic finance module provides the bridge between finance modeling and financial analysis. Its gives flexibility in developing finance models and measure impact on financial statements. Strategic finance modules have an in-built finance model which saves time from designing and developing spreadsheet based models. Finance modeling tools’ users need not be trained in writing complex logic statements. The finance tool provides users flexibility of adding as many complexities as required. The finance tool provides users to invest more time in doing analysis and developing alternate strategies rather spending time in validating data.

Strategic Finance and Capital Management

Any strategic finance decision has a direct impact on cash flow of the company. In turn cash flow impacts the balance sheet, hence financial performance within the company. The strategic finance tool connects finance decision-making process to working capital management to capital structure to taxation. This connection adds value to organization and reduces overall cost of capital.

A strategic finance tool also has a consolidation module which provides the total view to decision makers.

Finance Intelligence and Its Components

Introduction

In the modern global and competitive business world, it is very important to the companies to enjoy financial success. This financial success can be achieved through financial discipline, goal setting and periodic reviews. Companies which have enjoyed financial success are likely to see that trust among employees have increased; profit has improved, and employee turnover has decreased. These three factors contribute a lot to stability in company which in turn is the cradle for growth.

Finance intelligence is a combination of art as well as science. Finance intelligence talks about empowering employees with basic finance knowledge so that they can make a sound business decision. Finance intelligence is a skill set which every senior executive needs to have. Finance intelligence help employees’ right question for a business decision.

Finance Intelligence and Its Components

Finance intelligence is skill set comprising of the following four competencies; understanding the foundation, understanding the art, understanding the analysis and understanding the big picture. All the four competencies need to be put into practice and implemented for whole hearted success of finance intelligence. Finance is the business language recognized and used across all organizations. It is common denominator on which all the organizations are measured.

Understanding the Foundation

Organization needs to build on strong foundation for its non-finance manager to understand the concept of finance. The foundation requires basic understanding of income statement, cash flow and balance sheet. Non-finance managers should not be baffled when presented with an array of numbers. The purpose of finance intelligence is to ensure that when non-finance managers are presented numbers, they should be competent enough to make business sense out of them.

Understanding the Art

Finance as well as accounting is considered science and art. Both the discipline tries to quantify what cannot always be represented as numbers. This quantification of concept is based upon rules, assumption and principles. Non-finance managers should be able to apply this art/science to scenarios and make financial sense out of them. By doing this, they are prepared for any challenging scenarios.

Understanding the Analysis

Once the basic idea of finance and its utility is formulated, the application part comes from the picture. Numbers presented to non-finance managers can be better understood, right questions can be asked, and further analysis can be done around that. Finance intelligence equips managers to make sense of various ratio analyses, return on investment, etc. The new understanding helps them make informed and calculated decisions.

Understanding the Big Picture

It has been observed that the financial numbers alone do not tell the complete story about what is happening within the organization. A financial result or analysis needs to be understood from top level or broader perspective. A financial result should be analyzed considering the macro environment under which the company is operating. The macro factors which influence financial results are competitive environment, government regulations, changing demographics, evolving technologies, etc.

Finance Intelligence and Beyond

Understanding the finance concepts and finance intelligence competency are first steps in gaining broader financial knowledge. It should prepare managers to look beyond the finance numbers with an analytic eye and make informed decisions.

Introduction to Tally Software and Its Features

Introduction

Tally is powerful accounting software, which is driven by a technology called concurrent multi-lingual accelerated technology engine. It is easy to use software and is designed to simply complex day to day activities associated in an enterprise. Tally provides comprehensive solution around accounting principles, inventory and data integrity. Tally also has feature encompassing global business. Tally software comes with easy to use interface thus making it operationally simple.

Tally accounting software provides a solution around inventory management, stock management, invoicing, purchase order management, discounting, stock valuation methodology, etc.

Tally accounting software also comes with drill down options, which can track every detail of transaction. It helps in maintaining simple classification of accounts, general ledger, accounts receivable and payable, bank reconciliation, etc.

The technology employed by tally makes data reliable and secure. Tally software supports all the major types of file transfer protocols. This helps in connecting files across multiple office locations.

Tally accounting software is capable of undertaking financial analysis and financial management. It provides information around receivables turnover, cash flow statement, activity consolidation and even branch accounting.

Tally accounting software is east to set up and simple to use. A single connection can support multiple users. It can be easily used in conjunction with the Internet making possible to publish global financial reports.

Tally accounting software can seamlessly connect with various Microsoft applications.

Benefits of Tally Accounting Software

Any business owner understands the importance of maintaining proper books of account. This practice ensures that finance for the company is always in order and are correct at all given points of time. Company should always be aware of its financial positions.

Earlier, most of the businesses were employing manual practice in maintaining books of account. However, with the advent of modern information technology, this task can be performed by accounting software. Tally is one such all powerful accounting software.

Tally accounting software provides a solution to all the problems real businesses have to encounter. Single software takes care of all tasks required for enterprise management. Accounting task such as records keeping, accounts receivable and payable management and bank reconciliation are made simple through tally.

Financial management is also made simpler under Tally software. The software allows management of finances across multiple locations can handle multiple currency transactions, manage cash flow and interest payment.

Thus, Tally software is flexible, reliable, secure, easy to use and affordable.

MS Excel and Financial Decision-Making Model

Excel 2010 features rich analytical functions such as Pivot Tables, Advanced Graph and Decision Analytics. The current excel have developed functionality and reduces the dependency on VBA codes. Excel has formula groups and nested functions, which are able to undertake major of financial calculations. Conditional formula such as logic, lookup, indirect and match functions help in data analysis and What-If analysis.

Excel provides the basic framework to develop simple and manageable financial models. Though excel framework is unstable for certain type of analysis, but still it functionalities and compatibility make it an ideal tool for finance decision making.

The Capability Maturity Models and their Usefulness for Organizations

Capability Maturity Models

When organizations want to be certified for their quality or operational excellence, they usually turn to quality frameworks like Six Sigma, Kaizen, or TQM. These are just representative of the different quality and operational excellence models and there are many other frameworks as well. Similarly, there are process capability models like the SEI-CMM model (Software Engineering Institute – Capability Maturity Model) or the iCMM, which is specific to software companies, and the PCMM, which is an indicator of the HRM process capability or the people management capability. All these models pertain to how well the organizations are mature in terms of the Processual aspects. For instance, for a long time in the 1990s and the 2000s, many software companies made it a point to get themselves certified as SEI-CMM capable because the trend and the fad during those decades was for Processual maturity which was widely seen as an indicator of how well these companies managed their processes. Apart from this, there were other drivers of change like the widespread perception that Asian software companies (especially in India) were not processual to the extent that the western companies were. This was the reason why the SEI-CMM model was widely adopted by Indian software companies as it was touted as a badge of Processual maturity.

The SEI-CMM Framework

These frameworks like the quality and the operational excellence frameworks were based on how defined and optimizing the companies were with respect to processes and maturity in terms of quality and operational excellence. The SEI-CMM model had five stages that were initial or undefined, repeatable, defined, managed, and optimizing that were deemed to indicate the extent to which the organization’s processes were mature. The first stage was when the organizations did not have any defined processes in place and this stage was supposed to mean that the organization resembled a chaotic and unplanned approach to processes. The second stage was when the processes in the organization were mature enough to be repeatable which meant that the organization was able to repeat them across the organization. The third stage was when the processes were defined though not managed which meant that the company was yet to apply standard metrics for determining Processual maturity. The third stage was when the knowledge from a particular project could be carried over to the next project and where the processes were mature enough to be replicated across the organization. The fifth stage or the highest maturity stage was when the organization was capable of optimizing the processes with each iteration, which meant that there was a conscious continuous improvement plan in place.

How Asian companies view the CMM Model

These stages were deemed indicators of how well the organization had matured in terms of process capability and how well the organization was engaging in process improvement with each iteration. It is interesting to note that the trend of process maturity was seen by many in Asia as a worthy business model whereas some behemoths like Microsoft are still not process mature. The reason for this as advanced by some experts is that process maturity is not the holy grail of innovative companies like Microsoft, Google, and Apple that thrived on instant improvement and improvisation. When contrasted with the earlier assertion that this CMM framework was adopted widely in the East, the implication is that the Indian and Chinese companies were eager to portray themselves as being mature in terms of processes and saw this certification as a route to proving themselves to be on par with the western companies that were already mature according to the CMM framework.

Concluding Thoughts

Finally, certification according to the CMM model has its advantages, these outweigh the costs, and the time and effort put in by organizations to get themselves certified. This is because unlike the industry leaders who are anyway perceived to be role models despite not being certified, the Asian companies had a need to portray themselves as being process capable and process mature.

Emergence of ERP System

Introduction

Enterprise Resource Planning or ERP is one the most common term used among corporate world, business school and in the technology structure. There are several definitions of the ERP, but the term can be best understood if each word is looked at individually.

Enterprise refers to any organization with aspiration and business motive. In any organization, there are several resources in form of human capital, plant, machinery, capital, etc. Every organization is looking at ways to use all resources in optimal manner and to get the most out of them. Therefore, for effective utilization of these resources, organization needs to set about controls and check points around them. These control and check points are known as strategic planning, for example, inventory planning, sales planning, human-resource planning, financial planning, etc.

ERP software looks to combine all the resource planning and execution at the corporate level. This facilitates tracking of resources and supplementing executive decision. ERP is an integrated information system which utilizes a central database and has a common computing platform, which assists in effective resource planning to ensure business transactions.

Advent of Enterprise

The last couple of decades or so has seen the emergence of techniques to improve productivity. However, with the advent of information technology, ERP has been in the forefront in organizational success. Traditionally, all organizations were built of different departments undertaking distinct task such as manufacturing, sales, operations, human resource, finance, etc. A thought prevailed that if individual departments could meet their respective goals, organization will also meet its objective. However, it has been observed that different departments have their own objectives and productivity metrics. These departmental objectives may not align to the overall organizational objective. For example, sale team makes a commitment of next-day delivery when the distribution team may not be ready for that task. So there were always inter-department conflicts plaguing the organization.

This led in the development of enterprise approach towards management. Under enterprise approach, the whole organization works towards a single set of objective; all the departments need to develop their objective in line with the organizational objective. The whole organization works as a single unit with departments working as a sub-unit.

Enterprise Resource Planning System

As organization started moving towards enterprise approach, focus started shifting from function to process. Delivering customer delight became not just a sales function, but is part of the performance delivery process. This change of focus reorganized company structures. Earlier individual department had their own system catering to their own needs and demand. This led to duplication of data, lack of integration between department/systems and continuity in flow of information.

ERP system looks at the process as a whole. For example, a goods receipt will lead to update in stock inventory, update in purchase order history, update accounts payable, and update need of inspective of new stock.

ERP system leads to removal of data duplication as one entry or activity can be captured just once, and this record cannot be accessed without proper authorization.

ERP systems lead to standardization of data as entry fields are not left to user discretion. ERP System helps in data tracking from origin to destination.

Introduction to E-Procurement – Tools, Application and its Benefits

Introduction

In layman’s term, e-procurement is nothing but electronic data transfer to support operational, tactical and strategic procurement. E-procurement has been existence for long time in one form or the other earlier it was done through electronic data interchange. In today’s environment, most of the e-procurement is done through the Internet.

Traditionally, procurement of supplies and material was done through paper, which slowly migrated to usage of an electronic medium for order printing and storing. With the advent of the Internet e-commerce flourished, and procurement was done through email and websites. As the Internet technology evolved e-catalogue came in the forefront thus traditional procurement was getting done through the Internet. In the current market with data security and advanced tools whole process of e-procurement is done through the Internet.

Procurement as a Function

Procurement departments are found in most of the organization. There are responsible for purchase of raw material, office supplies, office equipment, facility maintenance, etc. It is important for them to know and understand the e-procurement concept so that they can add efficiency and effectiveness to the whole process.

Procurement managers must have complete understanding of various e-procurement applications. He must be able to identify processes, which can make procurement effective. He should have understanding of e-procurement benefit. He should understand risk associated with e-procurement implementation.

E-procurement Tools and Application

There are several tools and application which fall under e-procurement some of them are as follows:

• In electronic data interchange system, procurement messages are exchange between computers of two separate organizations. Message is exchange in batch and can be easily transmitted and stored. EDI is mostly used for order transmission, order confirmation, logistic information and order invoicing.
• Enterprise resource planning system have separate module to handle the procurement function.
• Internet based tools and resources help in the process of procurement. Some of the common applications are email, internet based EDI, XML based data exchange via the internet etc. Internet provides tools for e-sourcing, e-tendering, e-auctioning, e-ordering and e-catalogue.
• E-sourcing tool is used to identify potential suppliers during the selection phase. E-tendering tool is used to send out tenders with procurement requirements, supply schedule, contracting terms, etc. E-auctioning tools bring together potential supplier identified during selection phase under one umbrella to undertake auctioning process. E-auctioning tools operate under two separate mechanism, upward price mechanism for selling organization and downward price mechanism for the buying organization. E-ordering tool is used procurement of office supplies and services; it is accessible by all employees within the organization and is mainly used for ad-hoc purchases. A web-based ERP tool is used for product-related purchases, is exclusively used by the procurement department, and falls under a planned process.

A traditional procurement process starts with phase requirement definition, sourcing, solicitation, evaluation, contracting and contract management. In the internet based this steps are replaced by e-sourcing, e-tendering, e-reverse auction, e-ordering and web based ERP.

E-procurement Benefits

E-procurement influences the following:

• The cost incurred on goods and services associated with production.
• The cost incurred on procurement process such as ordering, administrative support etc.
• The cost incurred on specification formulation, supplier selection etc.
• The cost benefit in establishing relationship with suppliers.
• It promotes transparency in the process and therefore improves accountability.

Enterprise Marketing Automation

Introduction

Enterprise marketing automation is part of customer relationship management module. Enterprise marketing automation can also be an independent software installed by the company. The main function of the enterprise marketing automation module is to run different marketing programs in the organization. The enterprise marketing automation module also helps the given organization develop a business plan.

An enterprise feeds from the customer data which is maintained by the company. Therefore, the module helps the company to maintain, manage and filter customer-related information.

When a company decides to start a marketing campaign for a particular product than the enterprise marketing automation tool provides the company a short list of customer who could be interested in the product. This filtration of customer is done based on customer segmentation.

Customer Segmentation

Customer segmentation is an important parameter to consider when designing marketing campaigns. Customer segmentation technique splits the customer on various parameters. If the marketing campaign satisfies those customer parameters, then, enterprise marketing automation tool will provide their list.

Parameters considered for customer segmentation are as follows:

• Homogeneity within a particular customer segment.
• Heterogeneity across different industry and customer segment.
• Customer should respond in an identical manner to a particular marketing campaign.
• Customer should be reachable through the marketing campaign.
• Organization should be able to create a marketing strategy for the group.

Segmentation Strategy

An organization looks to target a particular segment for following reason:

• Organizations are better able to understand and satisfy needs of the customer.
• Organizations are able to generate higher profits through segmentation.
• Segmentation provides a great opportunity of growth.
• Segmentation can create a long and fruitful customer relationship.
• Segmentation can lead to higher market share.

However, to devise a successful segmentation strategy is difficult. Organizations typically run into challenges around selection of variables to define segment. There is also a difficulty in identifying correct algorithms for segmentation.

Components of Enterprise Marketing Automation

There are about five components of enterprise marketing automation. They are as follows:

1. Promotions: These are the activities undertaken by organization to increase their sales. Promotions can be categorized as cross selling or up selling. In cross selling, customers are offered similar products to one they have already bought. The aim of cross selling is to satisfy all the customer requirements. In up selling customer are offered expensive product as well as an upgrade to the existing products. Up selling is more profitable, and it is in top up of existing sale.
2. Event Based Marketing: This involves registering customers for seminar and in case web cast via the Internet. Companies look forward to sponsoring events and include their products as part of the marketing event.
3. Loyalty and Loyalty Programs: Loyalty is defined as continued commitment of a customer to a particular product, brand or organization. Customer tends to maintain their loyalty if companies provide value to them and/or it is much expensive to change product brand or organization.
4. Partner Management: It is a marketing campaign organization joins hands to promote their and partner’s products. This could also be referred to as joint promotion.
5. Response Management: This gives flexibility in marketing campaigns based upon the initial reaction from the customer. It is a response management in real time.

Top 5 ERP Solutions Providers and their Pros and Cons

Introduction

Enterprise resource planning has been the forefront in providing efficiency and productivity solution to the companies all over the world. In the global and competitive environment, it is essential for companies to have some sort of ERP in place. Enterprise resource planning ensures that deployment of resources take place, and company can monitor them on a real-time basis.

Top 5 ERP Solutions Providers

The top 5 ERP Solution providers not in a particular order are Epicor, Infor, Microsoft, Oracle and SAP.

1. Epicor: This company has been in the enterprise solution market for a very long time. The company was founded in 1972 and since then it has introduced several reputable products. The company has over 20,000 customers all over the world at present about 140 countries. In last decade or so and after some critical acquisition, company has achieved high growth. Company has a good value added reseller channel and provides strong industry solutions. One key success factor to the company is its pool of ERP consultants. Products offered by the company are low to moderately price.
2. Infor: This company is 3rd largest player on the ERP market. The company was founded in 2002. The company has introduced enterprise software for financial systems, supply-chain management and customer relationship management. The company has more than 70,000 customers all over the world. The company is known to provide vertical ERP solutions and boast key strength in manufacturing solutions. It provides ERP solutions for complex and non-continuous manufacturing. The products sold by the company are low to moderately price.
3. Microsoft: This company has a very strong presence in the Small Medium Business segment and in the mid-market. Microsoft has over 83,000 world- wide customers. Microsoft has a very strong channel network to handle ERP products. Microsoft ERP products are only sold through Value Added Re-seller only. This raises question over its strategy around ERP products. The products sold are low to moderately price.
4. Oracle: This company is 2nd largest player on the ERP market and the current number 1 in the CRM market. The company has over 30 years of proven record on the ERP market. The products offered by the company have a very flexible module, therefore, open to much customization. The products offered by the company are in the high-price band.
5. SAP: This company is the largest player in the ERP market. Their name has been synonymous with ERP products. The company is the pioneer in the ERP market. The products offered by the company are in the high-price band.

Small Business Market Leaders

The small business market is dominated by the Microsoft ERP products. Since 2000, the company has acquired a string of companies, which has added to value to its ERP portfolio.

Middle Market Leaders

Epicor and Infor both are strong players in the middle market. Epicor is very robust in financial services, hospitality, retail, etc. sectors.

Global Companies and Large Enterprise

SAP is the world leader in this market because it provides superb accounting solution software, which tightly integrated all major departments throughout the company. Oracle through acquisition of PeoplSoft has emerged a strong force in ERP market.

Business Analytics – Meaning, Importance and its Scope

Introduction

The word analytics has come into the foreground in last decade or so. The proliferation of the internet and information technology has made analytics very relevant in the current age. Analytics is a field which combines data, information technology, statistical analysis, quantitative methods and computer-based models into one. This all are combined to provide decision makers all the possible scenarios to make a well thought and researched decision. The computer-based model ensures that decision makers are able to see performance of decision under various scenarios.

Application

Business analytics has a wide range of application from customer relationship management, financial management, and marketing, supply-chain management, human-resource management, pricing and even in sports through team game strategies.

Importance of Business Analytics

• Business analytics is a methodology or tool to make a sound commercial decision. Hence it impacts functioning of the whole organization. Therefore, business analytics can help improve profitability of the business, increase market share and revenue and provide better return to a shareholder.
• Facilitates better understanding of available primary and secondary data, which again affect operational efficiency of several departments.
• Provides a competitive advantage to companies. In this digital age flow of information is almost equal to all the players. It is how this information is utilized makes the company competitive. Business analytics combines available data with various well thought models to improve business decisions.
• Converts available data into valuable information. This information can be presented in any required format, comfortable to the decision maker.

Evolution of Business Analytics

Business analytics has been existence since very long time and has evolved with availability of newer and better technologies. It has its roots in operations research, which was extensively used during World War II. Operations research was an analytical way to look at data to conduct military operations. Over a period of time, this technique started getting utilized for business. Here operation’s research evolved into management science. Again, basis for management science remained same as operation research in data, decision making models, etc.

As the economies started developing and companies became more and more competitive, management science evolved into business intelligence, decision support systems and into PC software.

Scope of Business Analytics

Business analytics has a wide range of application and usages. It can be used for descriptive analysis in which data is utilized to understand past and present situation. This kind of descriptive analysis is used to asses’ current market position of the company and effectiveness of previous business decision.

It is used for predictive analysis, which is typical used to asses’ previous business performance.

Business analytics is also used for prescriptive analysis, which is utilized to formulate optimization techniques for stronger business performance.

For example, business analytics is used to determine pricing of various products in a departmental store based past and present set of information.

Data for Analytics

Business analytics uses data from three sources for construction of the business model. It uses business data such as annual reports, financial ratios, marketing research, etc. It uses the database which contains various computer files and information coming from data analysis.

Challenges

Business analytics can be possible only on large volume of data. It is sometime difficult obtain large volume of data and not question its integrity.

Business Intelligence – Architecture, Components and its Benefits

Introduction

The current business environment is constantly evolving. The global economic scenario is providing opportunities as well as challenges. The factors affecting business environment are consumer needs, globalization, and government policies, etc.

In such a business environment, organization basically has four action steps. The organization can be reactive, anticipative, adaptive, or/and proactive. For this, organization can develop a new strategy, get into partnership, etc.

Today most of the businesses are having a computerized business support. This support is in form of decision support system, business analysis, etc.

The main objective of business intelligence is to bridge the gap between organization current status and its desired position. Business intelligence helps organization achieve commercial success along with sound financial management.

Business intelligence is framework designed to support decision-making process. This framework combines architecture, database, analytical tools and applications. Business analytics forms an integral part of business intelligence.

Framework of Business Intelligence

More and more businesses are moving towards business intelligence. The reason for this movement is the business environment. Organizations are forced to capture, store and interpret data. This data is at the core of business success. Organizations require correct information for any decision-making process.

Business intelligence combines data warehousing, business analytics, performance, strategy and user interface. Business receives data from various sources. This data is capture in the data warehouse where it is stored, organized and summarized as per further utilization. Authorized users can access this data and work on it to get desired results. This result than are shared to executives for decision-making process. These data results can be published through dashboards or share points.

Business Intelligence Architecture and Components

The main components of business intelligence are data warehouse, business analytics and business performance management and user interface.

Data warehouse holds data obtained from internal sources as well as external sources. The internal sources include various operational systems.

Business analytics creates a report as and when required through queries and rules. Data mining is also another important aspect of business analytics.

Business performance management is a linkage of data with business objectives for efficient tracking. This business performance is then broadcasted to an executive decision-making body through dashboards and share-point.

Benefit of Business Intelligence

The benefits of Business intelligence are as follows:

• Business intelligence is faster more accurate process of reporting critical information.
• Business intelligence facilitates better and efficient decision-making process.
• Business intelligence provides timely information for better customer relationship management.
• Business intelligence improves profitability of the company.
• Business intelligence provides a facility of assessing organization’s readiness in meeting new business challenges.
• Business intelligence supports usage of best practices and identifies every hidden cost.

Business intelligence usage can be optimized by identifying key projects on which company would like to focus. This process of highlighting key projects is called business intelligence governance.

The importance of business intelligence is growing, and its usage has proliferated across various types of users. Earlier, it was in the domain of IT staff, but now business team is also independently handling business intelligence.

Business Intelligence Architecture and Tools

Introduction

Business intelligence is an important to ensure the following:

• Various decision-makers and analyst have a direct and un-interrupted access to data. The data been used across the organization should be non-disputable.
• Decision makers spend their time analyzing the data rather than collecting and formatting them.
• Decision makers are able to focus their energy in improving the business process rather than searching for data across systems.
• Decision makers can instantaneously carry out what if analysis without much manual intervention.
• Data management is done from enterprise perspective rather than at a departmental level.
• Data is considered as a strategic resource rather than as an input for business intelligence process.
• Business forecast is used supply and demand side of business users.
• Majority of the decision-making process is done through an automated process.
• Data is shared effortlessly within the company.
• Reports generated utilize primary and secondary data without any additional efforts.

For business intelligence to ensure the above it is necessary that it has a robust architecture. Business intelligence architecture is divided into six critical elements’ data management, transformation tools and processes, data repositories, application tools for analysis, presentation tools and operational processes.

1. Data ManagementFor to achieve data integrity following points need to be addressed. The 1st major point organization is the need of the data. The organization must come to agreement that a particular analytics will provide competitive advantage and enhance business performance.The next question which needs to be addressed is the source of the information. This sourcing of data can be from enterprise itself, or it may be from the external sources. If the source is within the organization than it is essential there is a common platform for all flow of information.The next question is the quantity of the data. Since there is large volume of data available, based on the required company should gather data to have a normalized business behavior.The next question is to make data valuable, once that is determined data management comes from the picture, i.e. acquisition of data to retirement of data.
2. Transformation ToolsThe required data needs to undergo ETL process. ETL process consists of extracting data, transforming the data and loading the data. The process extracting data from the repository is a straight-forward process. However, validation and cleansing of data is a difficult task. This validation and cleansing of data is done through various well established business rules. Transformation of data involves converting the data to standardized form.
3. Data RepositoriesOrganization can store data through data warehouses. Data warehouse sometime has data mart, which is a partition to handle single business function. A metadata repository is used to store data definition and technical information.
4. Analytical Tools and PresentationThere are several business tools available on the market, but it is essential to identify what it intends to do with the data and then choose the tool.
5. Presentation Tools and ApplicationsBusiness intelligence can only work if end users are able to make sense out of that data. Presentation tools should allow the users to manipulate complex data into to ad hoc reports for company-wide distribution.
6. Operational ProcessOperational Process determines how data management and business intelligence is to be implemented within the organization. It deals with the question how the organization creates manages data and different applications.

Data Warehouse, Data Marts and Online Analytical Processing (OLAP)

Introduction

One of the critical components in the information technology age is the data. Data is the source of all the information and information is valuable for decision making process.

Decision support systems are developed to support executive management and relevant decision makers. In the modern era, there is large volume of information is available. Data warehouse is required to store huge volume of data.

Since the data warehouse is supporting decision support system, therefore, it should be subject oriented, integrated, collected over a period of time and static.

Data Warehouse

Data warehouse has subject oriented data. This subject oriented data could be information such as sales, customer name, etc. Data warehouse excludes information, which is not useful for decision-making process.

Data warehouse is developed as an integration of multiple heterogeneous data sources. As the data source have their own data protocol, data processing is required while data warehousing.

Data warehouse provides information with time as function. This gives historical perspective to the information.

Once data is captured into the data warehouse, it cannot be changed.

Data within the data warehouse is maintained in form of star schema, snowflake schema and galaxy schema.

Data Mart

The data mart is that portion of the access layer of the data warehouse which is utilized by the end user. Therefore, data mart is a subset of the data warehouse. Data mart is usually assigned to a specific business unit within the enterprise. Data mart is used to slice data warehouse into a different business unit. Typically, ownership of the data mart is given to that particular business unit or department.

The primary utility of data mart is business intelligence. A data mart requires very less investment compared to data warehouse and therefore it is apt for smaller business. Set up time for data mart is very less again making it practical for smaller business.

The main advantages of data mart are as follows:

• It provides easy access to daily used data.
• It improves decision making process for end user.
• It is easy to create and maintain.

Online Analytical Processing (OLAP)

OLAP or Online Analytical Processing is a concept in which data is analyzed through multiple dimensions with help of structure called cube. OLAP helps in converting data into information.

The main objective of OLAP is to summarize information for decision making process from large data base. The report generated through OLAP can be presented in a format as per the requirement of end user.

The advantages of OLAP are as follows:

• It ensures that response to query is quicker consistently.
• It provides facility to work with data which are difficult to query through SQL.
• It lets user create view with the help of spreadsheet.

There are three types of OLAP multi-dimensional OLAP, relational OLAP and Hybrid OLAP. In multi-dimensional OLAP data is usually stored in proprietary structure suitable for multi-dimensional analysis. In relational OLAP data base is structure through standard database in star or snowflake schema. A combination of multi-dimensional OLAP and relational OLAP is the hybrid OLAP.

Information Technology and Business Alignment: Why it is Important

Introduction: What is IT Business Alignment and Why it is Important

The saying about the Blind Men and the Elephant in which three blind men touch the Elephant and state different things without knowing that it is an Elephant, firms and organizations must ensure that their IT and business strategies are complementary and supplementary to each other and not like the blind men in the parable quoted above.

IT Business alignment is defined as the dynamic actualization of organizational goals and objectives and the Operationalization of the IT strategies according to those objectives. Typically, the organizational objectives are expressed in terms of improved financial performance and sustained market competitiveness. For instance, organizations can state that using IT, they hope to increase sales and revenues by 20% and reduce costs by 10% and increase profits by 15% and achieve profitability. Further, organizations might also want to state their market based objectives such as increased market share wherein they hope to penetrate into newer segments and extend their reach in established segments with IT. Thus, IT business alignment is the organizational capacity to leverage the former for the success of the latter. This means that for an organization to claim that its IT and business strategies are aligned, there must be harmony between them and little or no friction between the decision makers in corporate/business departments and the IT department.

IT business alignment is also defined as the organizational imperative to actualize a positive relationship between the use of information technologies and stated and accepted measures of financial and business performance. However, IT business alignment is easier said than done in practice as there exist significant gaps between what the business wants and what the IT systems deliver. This is mainly due to an inadequate understanding of how IT systems work and how they deliver value as well as due to cultural aspects in addition to a lack of coordination and cooperation between the business and IT departments. Often, one hears the complaint that IT staff talks in arcane terms, which is the refrain among the business and corporate executives. On the other hand the IT staff point to how the business and corporate departments expect the moon from an IT system when in reality an IT system delivers more or less what the realistic requirements state. Many CIOs also complain that CEOs, CFOs, and COOs often think of the CIOs as Magicians who can help the organizations reach the stars. Further, they also are frustrated because in practice, IT systems and their Operationalization are according to the mutually accepted requirements and not something, that manifests from thin air.

The Six Steps to Actualize IT Business Alignment

IT business alignment is usually referred to as the “Holy Grail” which the organizations must strive for as there are substantial benefits of aligning IT and business strategies in terms of the significant value that can be added to the organizations provided they leverage IT strategically, efficiently, and efficaciously. To do this, organizations can do six things or six characteristics that would ensure that IT and business are aligned with each other. The first step is to recognize and realize that IT can be used as a transformative tool in organizations. To do this, businesses have to realize the potential of IT to integrate disparate and discreet business functions and processes into a holistic business stream as can be achieved when the entire sales and marketing cycle starting with cold calling customers and including the bidding and finalization of the contract and ending with the post sales customer service are automated in a single value chain that would result in eliminating redundancies, reducing duplication, and simplifying complex steps. The second step follows from the above wherein organizations must use IT to target customers both from within and externally using IT.

The third aspect is related to the manner in which the IT and business staff must “talk to each other” in a manner that is mutually comprehensible. We have already described how there exist significant communication gaps between these staff. Therefore, to actualize tighter IT business alignment, the organization must rotate staff between these functions so that they have a working knowledge and a personal experience of how it feels to be on the other side. This is the reason why many organizations prefer IT professionals who have specialized in business management as well as business management graduates who have specialized in IT to staff the roles of CIOs and to some extent, in the corporate and business executive functions.

The next aspect is to do with defining the goals and objectives for the IT department in a clear and coherent manner. This entails management by objectives wherein the IT department is given the financial, operational, and strategic objectives that are expressed in the SMART (Specific, Measurable, Achievable, Realistic, and Time Bound) model. The fifth and perhaps the most important aspect in the road to actualizing closer IT business alignment is to devise foolproof and near accurate as well as reliable and measurable Returns on Investment (ROI) from the IT systems. Often, organizations fail to devise as well as define the ROI from the IT investment, which results in a lack of clarity on whether the IT spends, is worth the time and the effort. This is the reason why many organizations resort to expressing the ROI in terms of every dollar spent on the IT systems.

Finally, the sixth aspect is to get all these aspects together into a (preferably) written document that enumerates the IT and business strategies and how they are expected to work together. At the risk of sounding repetitive, we want to emphasize that unless the IT staff are given a requirements and a specifications document wherein the former is couched in business terminology (developed by the business departments) and the latter in technical terminology (developed by the higher level IT staff for the use of the programmers), the resultant IT systems usually resemble a chaotic and wasted effort. It is often the case that the CIO and the CEO or the COO sit together and come up with the business requirements, which are then signed off by both the parties, and then the technical specifications are prepared by the IT staff, which is again signed off by the CIO. Further, the key imperative here is the existence of a “single source of truth” which is the artifact describing the IT business alignment and how the organization wishes to actualize the same.

IT Business Alignment, Governance, and Transformation

The key to successful IT business alignment is the creation of value at each step of the value chain of the organizations’ internal and external processes. This value is created through technology as well as process improvements. Since we are discussing the role of IT in creating value, we can think of IT as the enabler and transformer of organizational processes that lead to increased productivity and higher value at each chain of the internal and external value chain for the organizations. Further, IT is used by many organizations to automate, integrate, assimilate, and deliver real time information in the business processes. Thus, the business driver in these cases is the leveraging of synergies between these processes that were otherwise inefficient. Moreover, organizations also use IT to ramp up their operations which are known as actualization of the benefits from the economies of scale. Apart from that, IT is used to expand into newer geographical and virtual market segments as automating and using IT often results in an anywhere, anytime, everywhere, every time experience for the end users.

For all these to happen, the IT and the business functions must work together as a team and in a synergistic manner. IT must become a tool of transformation as well as a source of sustained competitive advantage. For instance, if your bank offers 24/7 virtual banking as well as an extensive network of ATMs would you prefer a competitor whose banking hours are restricted and which forces you to visit the branch for even minor transactions? This is the power of IT and which can only be achieved if the business strategies and the IT strategies complement and supplement each other.

Conclusion

In real world organizations, it is often the case that there are ego clashes, turf battles, resistance from vested interests, and pushback from established power centers for any new initiative. Considering the fact that IT is seen as a positive force for change, it is in the interests of the organization to avoid these friction points and instead align their IT and business strategies for the continued success of the organization.

Emerging Platforms – Cloud Computing

Emerging platforms are new technology developments and business models for which a theory is yet to be formulated, and yet there are rapid, radical innovations happening in their field. In this article, we will learn about one such platform – Cloud Computing by doing a critical assessment of its current trends, appreciate the challenges in implementing it and gain a perspective on how this technology impacts business outcomes.

What is Cloud Computing?

Cloud computing is a suite of tools which enables companies to lease their digital assets somewhere ‘in the cloud’. So unlike the ‘on-premise’ data centers, the location of computers, applications and databases that employees are using is unknown. The point is to free companies from details and ‘rent’ whatever is needed from the cloud. They don’t need to buy and thus the IT expenses are switched from fixed capital to operating expenses.

Let us clarify some jargons that are often used in tandem with the cloud terminology. The offerings of the cloud can broadly be categorized into the following:

1. INFRASTRUCTUR-AS-A-SERVICE (IAAS): This is the simplest form wherein server(s) or a storage capacity is there on cloud. Clients opting for this arrangement are typically IT companies who don’t want the hassle of installing or maintaining the space, but want to avail access to their material whenever required.
2. PLATFORM-AS-A-SERVICE (PAAS): This platform enables employees to write code, develop applications and integrate with their existing resources. The environment is conducive to development as it comes installed with technologies such as .NET, Java, Ruby on Rails, Python, etc that can prepare code and then host it for sharing.
3. SOFTWARE-AS-A-SERVICE (SAAS): This is the most mature offering of cloud that comprises of applications residing on the cloud as opposed to the physical database. CRM Salesforce.com was the first to implement this offering all customer relationship management data and analytics on cloud instead of on the hard drive.

How does the Cloud help?

Apart from doing away with purchasing and installing massive data centers and making information available on web browsers, cloud has several benefits:

• Productivity: Employees can control their own accounts reducing precious time. Consider a non cloud environment such as the FTP server. Usually it is difficult to use and runs out of capacity. The IT department has to perform the repetitive task of creating a folder for each user and granting them the required access. If the folder details are to be shared with anyone else, the requisition has to again be routed via the IT department. In contrast, a cloud environment can enable self administration of accounts.
• Collaboration: Teams and communities can work collectively as all resources are shared online. This proves very useful in a typical IT onsite-offshore arrangement.
• Better Intelligence: Cloud platforms have their own study softwares that can be combined with company specific resources to create unique results. For example, Google Earth Builder, an application pre loaded on cloud, facilitates to companies to upload their own data on Google Earth or Google Maps thereby establishing their presence on these resources.
• Cost Savings: Instead of purchasing and maintaining expensive servers themselves, companies can invest in cloud based platforms which proves out to be a cheaper alternative. This is because cloud providers acquire mammoth quantities of bandwidth, hardware and power to get better price points.
• Reliability: Cloud providers build redundancy to avoid major disruptions. This investment may not be possible for individual companies. To illustrate, as monitored in 2010, Gmail was available 99.984% of the times, with an admirable down time of only 7 minutes per month. As per research, this is 32 times more reliable than a typical company email setup.

Concluding Remarks:

The cloud is still in its infancy stage and hence is an emerging platform. There is a fast increase in the number of cloud vendors; they are trying to be creative and segregate their offerings. In times ahead, there are expected to be transformative changes in this field and wider acceptance of the technology.

Insight into Big Data

Organizations produce an exploding amount of data while capturing bushels of bytes of information pertaining to their operations, customers and suppliers and this data is continuously increasing. To give an idea, it has been forecasted y International Data Corporation (IDC) that between 2009 and 2020, data will mammoth 44 times amounting to 35.3 zettabytes which is equivalent to 1.8 trillion gigabytes. Thus, a burgeoning volume of digital ‘exhaust data’ is generated by companies as they manage their businesses and interact with stakeholders.

Introduction to Big Data:

Big Data refers to an amalgam of various kinds of data. It comprises of traditional company produced data such as customer relationship management (CRM), administrative and financial particulars, management information systems, supply chain operations , etc that can be stored in the company’s database. It also comprises of content such as social media, video, sensor data (produced by clicking links on social networks) and email. But the term Big Data is coined for the above kinds of data when it is too big for conventional systems to control it. Size alone is not an indicator for bigness. Data is big because of:

• Volume: Abundance of information.
• Velocity: Changing rapidly.
• Variety: Unstructured and not usable in current form.

This data can be made very useful by slicing and dicing it with analytical tools to identify trends and patterns, and assist in decision making by performing business intelligence. In today’s world, information can easily be shared across the organization by deploying SAP, Microsoft Dynamics and Oracle Enterprise Resource Planning (ERP) systems. This merging and sharing of data not only increases the complexity, but also the analytical potential. To illustrate, around a decade ago, company historical data was the only way to estimate future sales. But today, many more resources such as competitive analysis, market economics and website clicks can be used as an input to predict revenue. All these are nothing, but avenues of Big Data.

Challenges:

Data is truly big when companies have to design innovative ways to collect it and make sense out of it which is a challenging task. Companies are being bombarded with data and may not be proficient in handling and analyzing trillions of bytes of data. This can be attributed to:

• Company’s paucity of infrastructure to manage the sheer volume of data: There is often limited storage or server size to accommodate all the data being generated.
• Lack of appropriate talent, i.e. Big Data Analysts or Business Intelligence professionals: As per McKinsey and company, there is a shortage of workforce appropriately trained on experienced in Big Data analysis. Also, management in most small and midsized firms and to an extent large corporate lack management strategy to capitalize on the data.
• Threat of data integrity: As previously mentioned, owing to ERP systems, unstructured data from various sources often gets mixed making it difficult to validate its accuracy leading to garbage data.

Approach for utilizing Big Data:

IT departments are struggling in dealing with Big Data. There are several measures available to ease this problem. The cloud has the bandwidth to manage monster data and hence provides a suitable environment without the need to invest in expensive huge capacity servers. XBRL is extensively used as a structured data language to format data and make it computer readable. A popular technology for analyzing Big Data is Apache Hadoop(High-availability distributed object-oriented platform)

IT-Governance and Why it is Important

Introduction: What is IT governance and why it is important

It is not enough for corporations to have IT systems and expect them to deliver strategic value to them. Instead, there needs to be a mechanism in place to regulate, monitor, and govern the value creation efforts of the IT systems. This governance mechanism of IT systems deals with the performance and risk management of those IT systems in a manner that would create value for the organizations and ensure that the intended alignment of the IT and business objectives is on track. Hence, IT governance deals with identification, establishment, and linking of the mechanisms of the IT systems to both manage risks and at the same time ensure that their performance is in tune with the stated objectives.

The need for IT governance is felt because the interests of the organization and those managing the IT systems can be at odds or in other words, there is a conflict between these two imperatives. Thus, IT governance is needed to ensure that the IT systems are doing their assigned duty and that the objectives of the CEO and the CIO are the same. Indeed, it can be said that IT governance includes all the key stakeholders in the organization starting with the executive management and the boards and including the staff, customers, and ending with the regulators and investors.

There are many definitions of IT governance and for the purposes of this report, the definition that is closest to our discussion is that IT governance is the alignment of leadership, organizational structures, and processes to actualize and sustain the organizational objectives through the use of IT. Further, IT governance is also defined as the governance of IT in a manner that would be directed and controlled and consists of evaluation and monitoring the plans for the IT systems so that they are in alignment with the objectives of the organization.

Apart from this, it also needs to be mentioned that corporate governance and IT governance must not be viewed in isolation but must act and move in tandem. Indeed, many experts point to the fact that IT governance is a subset of corporate governance and that both must be framed in a mutually dependent manner.

Broadly speaking, the objectives of IT governance can be summed up as assuring the creation of value through the use of IT; oversight of the management’s performance; mitigation of the risks associated with the use of IT; and a general tendency to have oversight over the IT systems so that there is alignment between the organizational goals and the goals of the IT systems.

Key terms explained

The terms IT governance, IT management, and IT controls are often used interchangeably though this is fallacious as each of these terms refers to different aspects of organizational imperatives. The primary objective of IT governance is the marshaling of the IT resources available to the organization and the stewardship of the IT systems in a manner that would create value for the organization. On the other hand, IT management is all about the plans to operationalize the use of IT resources, directing and controlling the use of such resources, and organizing the management of such resources. Similarly, IT controls are the mechanisms put in place to ensure that the organizational IT systems are being monitored and tracked. Thus, as we can see, there is a difference in each of these terms, which is more than semantic and instead, extends to the scope as well as the depth of the organizational mandate for each of these terms. We have used the term organizational mandate, as IT governance is a higher-level business imperative whereas the other terms are more micro-managerial in nature.

The best way to think about IT governance is to ask the question as to what can be achieved through the use of IT and how well the existing IT resources can be leveraged for the benefit of the organization. In other words, IT governance can be seen as a superstructure that encompasses the other terms defined above. Moreover, IT governance is itself a substructure in the overall superstructure of corporate governance and business governance. This means that IT governance is effective only when there is a vertical and horizontal alignment between these various elements of the organizational structure.

Framework of IT governance

There are many IT governance frameworks that are used by organizations worldwide and the most widely used framework is COBIT or the Control Objectives for Information and Related Technology). This framework prescribes a set of 37 different IT processes and the means of managing these processes through identifying the inputs and outputs along with key process activities, performance measures, and process objectives to ensure that the IT systems are indeed delivering business value.

The key reasons why organizations use the IT frameworks are to ensure that they use the IT systems in an efficient and effective manner. Further, risk mitigation and performance management are key business imperatives, which the organization must follow so that there are no surprises for its operations and that the business objectives are being met.

Conclusion

IT governance has emerged as a key imperative for organizations as during the 1990s there were several corporate failures and disasters arising out of poor corporate governance as well as lack of alignment between business objectives and the IT objectives. To conclude this report, it would be pertinent to note that to avoid such instances of business failure, organizations would be well advised to actualize effective and efficient IT governance along with responsible and reliable corporate governance.

IT and Systemic Risk and its Implications for Business

Introduction: What is Systemic Risk and How Does it Affect Business

Globalization has brought the world together and the rapid spread of Information Technology or IT has made us all interconnected, networked, and always on in a 24/7 paradigm. This means that the convergence of globalization and IT has resulted in businesses being able to not only cater to clients worldwide but also have a level playing field where in the noted expert on globalization, Thomas Friedman’s words, “The World has become flat”. However, all this interconnectedness and integration has downside risks as well. When systems are bound together and integrated, a fault in one part of the system has implications for the other parts and indeed, the system as a whole.

Consider what happens if you are a manager in a global company sitting in New York and having suppliers and customers around the world. If a storm breaks out in China or India, chances are that your supply chain would take a hit as deliveries are delayed leading to cancellation of orders etc. next, consider that you are a stockbroker sitting in London. Because the global financial markets are integrated through IT and operate on a 24/7 continuous basis, a crash in say, Mumbai, would affect your portfolio as you might be owning stock of Indian companies as well as would have invested in the country’s capital markets.

The above two examples are how systemic risk is increased because of globalization. Now consider a software company located in the United States and having its subsidiaries all over the world. If an IT system in one location goes down, then the work of everybody is affected, as it is often the case that these companies work according to load sharing as well as deliverables being done piecemeal. This is the example of how IT can cause systemic risk as well.

We have seen how globalization and IT create systemic risks for the companies. We can now understand the implications of this interconnectedness by examining what happened during the collapse of the American Investment Bank, Lehmann Brothers. On Sep 15, 2008, the bank declared bankruptcy sending global markets into a tailspin as the participants in the markets were all connected in one way or the other to each other and given the fact that global markets are tightly interwoven, a risk in one part of the system affects other parts as well as the entire system.

The point that we are trying to convey here is that while the integration of the global economy has brought prosperity, it has also brought in its wake severe exposure to systemic risk as can be seen from the examples listed above. Moreover, with increasing interconnectedness, there is simply no way to gauge which part of the system is vulnerable and damage to which part causes the system to topple over.

In business jargon, these systemic risks are known as the Butterfly Defect or the Butterfly Effect that is used to refer to the theory that if a butterfly flaps its wings in one part of the world, a storm is caused in another part of the world because of the systemic nature of the world. Of course, this Butterfly Effect has been in existence even before Globalization and the spread of IT. The difference between earlier eras and now is that globalization and IT have increased the vulnerabilities of the system to failure as nobody knows how many pressure points, fault lines, and vulnerabilities exist in the global economy.

This means that one is not sure how many butterflies are around and how many of them are flapping their wings. However, this does not mean that the world is prone to collapse and systemic risk with nobody having an idea or are clueless about how to mitigate it. As we shall discuss in the succeeding sections, there are ways and means of handling systemic risk through understanding complexity, reducing vulnerabilities, and increasing vigilance over the systems. It would suffice to state in this introduction that the acknowledgement of systemic risk is the first step towards dealing with it.

Black Swans, X-Events, and Collapse

We have discussed how systemic risk affects all of us whether we realize it or not. Some of the risks have been given names such as Black Swans, X-Events etc. Black Swans refer to low probability high impact events that occur and which cannot be predicted in advance. The term is derived from the belief that Swans are only white until someone spotted a Black Swan and the completely paradigmatic conception of what was known until then was replaced by the new theory. Similarly, the global economy is vulnerable to such Unknown Unknowns wherein we are subject to a sudden crash that happens without warning and has not happened before leading to a high impact.

On the other hand, X-Events are those that are known to happen but for which we do not have adequate preparation mainly because we have not yet quantified and understood the risks. This can be events like Terrorist Attacks, IT systems being hacked by sophisticated cyber-war techniques etc. the clear implications of both Black Swans and X-Events is that they fall in the category of Known Unknowns and Unknown Unknowns which means that both ignorance as well as risk blindness plays a part in not resolving these systemic risks. However, as we shall discuss in the next section, it is not the case that we are helpless before these risks and there is indeed a way to mitigate them.

Strategies to Minimize Systemic Risk

As set out in the introduction, while we are indeed prone to systemic risk, not all is lost, as some would think by insisting that we go back to our earlier paradigm that was simpler and easier to handle. This kind of thinking blames globalization and IT for systemic risk without understanding the fact that these trends have brought prosperity to Billions of people around the world. therefore, in order not be like the Ostrich in the Sand who is oblivious of the approaching cataclysm and like the Dodo that refused to change with the times and hence faced extinction, the key to mitigating systemic risk is to understand the pressure points, the vulnerabilities, the fault lines, as well as stepping up vigilance.

As they say, technology is value neutral. It can be used for both good and bad purposes. Just like technology and IT have ensured more value addition and innovation in the global economy, they can also be used to hack into computer systems, bring down the servers, as well as lure unsuspecting people into frauds and other Ponzi schemes. Thus, we need to figure out a way in which we deal with systemic risk and the first step towards that is to acknowledge the fact that systems are vulnerable.

The key to mitigating systemic risk is through establishing early warning systems that raise flags and put out warnings in advance of the approaching dangers. Just like we learnt to forecast the weather better than our ancestors in previous eras, we can master the art of predicting the dangers. Indeed, if we look back, weather forecasting was a hit and miss affair for a long time and it is only in the later parts of the 20th century that we began to get it right.

Similarly, predicting Black Swans, X-Events, and other systemic risks can be done if we leverage artificial intelligence, ubiquitous computing, Big Data, and market sensing and market intuiting techniques. All these techniques are predictive and predicative in nature meaning that these techniques provide us with the capability to detect risks before they manifest into full-blown storms. Moreover, we can also ensure that we understand and control complexity instead of letting it take over our lives. Finally, we can put in place continuity of business strategies to ensure that if by chance , a disaster strikes, we are prepared for it.

Conclusion

Life is risky even without IT and globalization. As has been emphasized throughout this article, it is indeed the case that risk has been with us ever since humankind emerged. The difference between those times and now is that the risks have magnified because of interconnectedness as well as highlighted because of the 24/7 global media that relentlessly and breathlessly plays up the risks leading to a sort of perpetual breaking news cycles wherein it seems as though the world is coming to an end. Therefore, the conclusion is that without behaving like an Ostrich or the Dodo, we can indeed master and tame the risks and ensure that our IT systems as well as business systems are made more resilient.

How Information Technology can Enable Governance in Developing Countries

The Problems of Governance in Developing Countries

Governance is a problem in many Third World countries where the structures and the systems of governance are slow, archaic, and bureaucratic. Moreover, many developing countries do not have processes in place that would ensure reliable delivery of public services. For instance, take the example of the Asian and the African countries where even if the government intends to deliver public services, corruption and bureaucracy ensure that such services almost always do not reach the intended beneficiaries.

Further, there is the problem of last mile connectivity wherein citizens in remote areas inaccessible through road and rail transport find that they do not receive any benefits let alone being aware or empowered to demand such services.

What is Last Mile Connectivity ?

Last mile connectivity is the phenomenon where the final step in the delivery value chain is poorly planned and executed leaving those without access (any form of access) without any benefits. For instance, consider the case of some African countries where the hinterland is so poorly connected to the delivery value chain that people living in those areas have to fend for themselves. Indeed, even in moderately developed countries such as India, the government finds it hard to reach everyone because of the last mile connectivity.

IT Enabled Governance

This is where Information Technology (IT) enabled governance is highly effective. If those people in the rural and the interior areas are provided with an internet connection (wireless) and a bank account, then the government can ensure that subsidies and welfare benefits are directly transferred into their accounts thereby solving the problem of last mile connectivity. In addition, the use of IT enabled governance can also reduce or even eliminate corruption as the people now receive direct transfers instead of through governmental and unofficial middlemen who hitherto were siphoning off the money or demanding a cut.

Red Tape and Bureaucracy

Further, IT enabled governance can also reduce the red tape associated with bureaucracy. For instance, it is often the case that many people are unaware of the various benefit schemes under the governmental welfare policies. This is because governments and especially the bureaucrats at the lower ends of the hierarchy are reluctant to part with information regarding the schemes for various reasons. If the details of such schemes are made available on the websites of the governmental agencies, then the people can get to know and become more aware as well as empowered to avail and even demand that the benefits of such schemes be made available to them.

Indeed, the biggest advantage of IT enabled governance is that it empowers the ordinary people and ensures that information is available to them at the click of a mouse. As the saying goes, knowledge is power. This means that once people have information as well as knowledge about the various schemes and the policies of the government, they are in a position of strength since they can approach the government and demand the officials to let them avail of the benefits. In this sense, IT enabled governance is empowering to the citizenry of the country.

Example of UID as a Method of IT Enabled Governance

Apart from these advantages, IT enabled governance also ensures identification and tagging of citizens so that bogus beneficiaries as well as the scope for fraud and corruption are minimized. A good example of this in practice is the UID (Universal Identification Number) method of providing Identity Cards that are based on biometric data to the citizens in India. This scheme which has been recognized the world over as a stellar contribution to both IT enabled governance as well as the power of IT to change and transform lives and countries has already reached a major part of the population and is now showing results wherein the basic as well as the advanced services under the welfare schemes reach the intended beneficiaries without any leakage or loss of funds in the delivery value chain.

Making the Delivery Value Chain More Efficient

As can be seen from the points made so far, it is clear that the delivery value chain starts with the government and ends with the ultimate beneficiary. In the process, it encompasses a wide variety of stakeholders who can create obstacles and hurdles.

Using IT, most of the middle layers in the value chain can be done away with and the direct contact between the ends of the value chain ensures that the middlemen and the intermediaries do not get a chance to indulge in corruption and red tape. In short, IT enabled governance is indeed a game changer for developing countries where the delivery value chain is so corroded that only 20% of the intended amount reaches the last point which is the beneficiary and the rest is lost at various stages in the value chain.

Conclusion: The Promise and the Challenges of IT Enabled Governance

Before concluding this article, it would be pertinent to note that there are challenges with IT enabled governance as well and these are to do with the low level of IT penetration, lack of education among the people who even with IT cannot access services because of illiteracy. Therefore, the next step in any IT enabled governance is to target the education and health sectors which world over have the active involvement of the governments. In conclusion, it is the case that we should make optimum use of technology when it is available and instead of using IT for everything except governance; we would be losing a vital opportunity to actualize social welfare to the masses.

Information Security Threats in Organizations and Ensuring Prevention and Recovery

It has become commonplace in contemporary organizations to have extensive IT (Information Technology) infrastructure and software and hardware assets. Indeed, with the wholesome adoption of IT by organizations, there is no organization worth its name that does not have an IT backbone no matter how small it is. This means that organizations cannot function without IT systems.

Further, IT has become crucial and critical to ensuring competitive advantage for organizations and there is no way in which business can be transacted without IT.

Having said that, it must be noted that having an IT system does not mean success or guaranteed outcomes unless organizations take steps to ensure that their Information Security protocols and procedures are well designed and their IT assets are protected and safeguarded against external and internal threats.

Indeed, with IT becoming pervasive, so are the multiple threats such as hacking by external actors, stealing of confidential and private information by internal actors including employees, cyber attacks that leave the IT infrastructure vulnerable to financial loss, and above all a pervasive threat of all these malign actors gaining access to the organizational IT systems and resorting to acts that can compromise the business of the organizations.

We have listed external and internal threats above. While it is well known that external threats manifest due to hackers and cybercriminals taking advantage of loopholes and vulnerabilities in the IT systems and infrastructure, it must also be noted that threats from within are something that are as dangerous as threats from outside.

Indeed, in recent years, there has been an increasing tendency for the cybercriminals to be assisted by internal actors within organizations who provide them with inside information and details about the organizational systems and IT infrastructure.

Moreover, it has also been found that more often than not, it is the insiders who enable the hackers from outside to break into the organizational IT systems and create chaos and wreak havoc.

On the other hand, one cannot completely ignore threats from hackers who are out to penetrate the IT systems not only with ulterior motives but also from competitors and other entities who have now taken to cyberspace as a means of extending their competitive games.

Indeed, if not anything, the threat from hackers who owe allegiance to rivals and peers is something that is slowly being recognized as a legitimate cause for concern among IS (Information Security) professionals.

Further, even entire countries and their intelligence agencies are now engaged in cyber hacking of their rival countries organizations in order to cause damage and economic loss to them. this is especially so in the context of the rivalry between the United States, China, and Russia wherein hackers from all countries who are aided and abetted by their backers from the commercial and national security interests hack into systems of their rivals so as to inflict damage and cause economic, financial, and reputational loss apart from causing disruptions to business.

Therefore, all these aspects mean that IS professionals in organizations have to foolproof their systems to safeguard them against these multiple threats and ensure that their IT assets and hardware as well as the IT infrastructure are protected. Indeed, with so many threats lurking in cyberspace, it is not uncommon for organizations and the IS departments to erect firewalls and restrict access to their systems from external sources.

This is also the reason why many organizations in recent years have taken steps that would curtail the internet usage of their employees so that they do not leave “digital footprints” in cyberspace that can be exploited by malign hackers and cybercriminals.

Another area of concern for IS professionals is the growing incidence of phishing and identity theft which is far more serious when it concerns the accounts of managers and senior executives apart from the leadership in their organizations.

While identity theft and phishing can cause losses to anyone and to organizations, where it affects the senior employees, it has the potential to seriously harm the organizational objectives as most of these employees would have highly classified and confidential information stored in their systems.

This is the reason why many IS professionals are now advocating secure and protected systems for the managers and senior leaders that are different and more “walled” than that used by rank and file employees.

Indeed, with so much concerns over these aspects, the IS professionals are also ensuring that above a certain level in the organizations, the IT and internet access is through dedicated and standalone lines rather than generic and companywide access that other employees have.

Finally, as the saying goes, prevention is better than cure and offense is the best form of defense, which means that IS professionals would be well advised to take steps to prevent rather than react to cyber breaches and to adopt aggressive postures against potential hackers as well as malign insiders instead of reacting after the breach or the hacking incident.

Further, it is also the case that things as mundane as writing down the passwords on papers that are left unattended and not locked away can also cause IS breaches. In addition, while one thinks that hacking is something that happens “out there”, as simple as visiting a website with inadequate security controls can also become the source of a major breach. In conclusion, it is worth remembering that carelessness and oversight are at the root of IS risks and hence, it is advisable to take measures to minimize these aspects.

Transformation of Business Intelligence in the Age of Big Data

The Transformation of Business Intelligence from Analysis to Prediction

Business Intelligence which refers to the slicing and dicing of data to mine it for clues on everything from consumer behaviour to the business strategies of rivals and competitors has come a long way since the earliest days when it was used for market intelligence to the times Data Warehousing and Data Mining were used as aids and props for marketing strategies to the present times when it has far exceeded its initial capabilities to become truly predictive and indicative of market trends and that too in a real time manner.

Indeed, it can be said that while Business Intelligence was always used for predictive purposes, its transformation from a relatively minor function or process in firms to a more strong and predictive indicator of the future means that the arrival and emergence of Big Data have indeed transformed the practice and purpose of Business Intelligence. For instance, in the 1990s, Business Intelligence was mostly used in conjunction with Data warehousing and Data mining where two and Three-Dimensional views of Databases was done to enable the firms to understand consumer behaviour and clues to future market trends.

Example of How BI was used in the 1990s

In this context, it would be useful to consider how Business Intelligence was used in a typical bank as far as data pertaining to credit card transactions was concerned. Typically, firms used to slice and dice purchasing patterns and payment data to understand how consumers behaved in terms of different products. Apart from this, by analyzing payment patterns, banks were able to determine which customer and which credit card user was likely to pay on time and which consumer would default or have to be placed on a credit watch. Indeed, this was the most common form of analysis that was done using customer data through Business Intelligence enabled by Data Warehousing and Data Mining.

How BI now has God like Capabilities

Fast forward to the present when Business Intelligence is now a predictive and real-time enabler of consumer behaviour and market trends wherein it is now being used to look ahead in Crystal Ball fashion leading to Banks and other Retailers as well as firms acquiring God Like Capabilities in predicting the future. Indeed, this transformation or revolution in the way in which Business Intelligence works has been achieved mainly through the use of Big Data Techniques that enable firms and other users to not only understand how consumers behave but also to predict how they would act in the future.

Example of How Business Intelligence (BI) is Used Now

Consider, for instance, the example of Amazon which uses Big Data and Business Intelligence extensively. This eCommerce giant mines consumer purchasing data and browsing data to build a database of information that can be used to predict what they are likely to purchase next and thus, provide them with the recommendations and suggestions for products and brands. Not only this, Business Intelligence enabled by Big Data also allows Amazon and other retailers to build Real Time Maps of consumer behaviour wherein they can offer brands and products across categories instead of linear suggestions restricted to particular categories.

This means that firms that use BI techniques no longer have to be content with Data Analytics that is linear or two or three dimensional and instead have Five Dimensional Capabilities that can predict and extrapolate as well as build an All Seeing Database that is truly revolutionary and transformative in nature. Indeed, if not anything, BI is no longer restricted to a particular function or a subset or even a superset of data and instead, it is cross-functional and all encompassing as well as holistic and comprehensive.

Consider for instance how the CDC or the Centre for Disease Control in the United States which is a Federal Agency tasked with preventing outbreaks of diseases uses BI in conjunction with Big Data. The CDC has now the capabilities to build a real-time map of diseases and their occurrences along geographical, demographic, racial, and class lines that allows it to predict future outbreaks of disease across these parameters. This means that the CDC is no longer reactive meaning that it steps in after the eruption of a disease and instead, is predictive meaning that it has moved from its initial capabilities to a point where it uses real-time data and information to map the outbreaks of diseases.

Data is the New Currency of Power

The reason why BI has undergone such transformative capabilities is that in the present Information Age where Data is the New Currency of Power, marketers and any firm for that matter are now collecting data about virtually anything and everything and which in jargon terms means Big Data. Thus, using these Big Data techniques in conjunction with Advanced Artificial Intelligence capabilities has resulted in firms having the capabilities to use BI for accurately measuring the present as well as predicting the future in addition to using the past to understand both.

Building a Better Society

While there might be some who complain about the takeover of machines or point to ethical concerns of having these capabilities, one cannot say that BI with Big Data can be used for creating a better society as the example of the CDC reveals. Indeed, while ethical concerns over any business strategy or innovation have always been the case, the point remains that responsible use of BI with Big Data can indeed transform and revolutionize the way we work and live. To conclude, the emergence of Big Data Techniques has indeed revolutionized the way in which BI is used and hence, one must welcome the same.

Importance of Critical Thinking in the Age of (Mis)-Information

Information Overload can Drown Us

We are literally and metaphorically drowning in information. From the time we wake up and check WhatsApp messages to the time we login to Facebook and Twitter or Google News, we are bombarded with an excess of information and data from multiple sources that can leave us drained and confused if we cannot sort out the facts from fiction and information from misinformation.

Indeed, Information Overload, the term used to refer to the surfeit of information that we consume every day is taking such a huge toll on us that most of us often fall prey to rumors, half-truths, and downright lies.

As recent events worldwide such as the Election of Donald Trump as the President of the United States and the Brexit vote show, separating the news from the fake news and the truth from post truth and facts from alternative facts has become that much more important if we are to make informed and intelligent choices.

The Need for Critical Thinking in the Information Age

This is where Critical Thinking and the ability to think for oneself without falling prey to misinformation in the Age of Information come into play. The term Critical Thinking refers to the capacity to read and digest information and then make judgments based on the information through the lens of objectivity and one’s own thought processes instead of relying on others to make the decisions for us.

Indeed, critical thinking can be said to be the most important skill that one must develop as part of the cognitive and intellectual abilities that are necessary for the toolkit of any professional or student whether they are in the corporate world or they are in the public sector.

How to Develop Critical Thinking

One can develop critical thinking skills in many ways. The time tested, and most effective method of developing critical thinking is through reading a wide variety of sources including books, academic journals, reputed magazines, and independent and objective news sources. In addition, critical thinking can be developed by following the works of famous journalists and opinion makers without any hidden agendas and biases.

Having said that, one must also note that even the most objective of the authors and the opinion makers have their own biases and hence, it is very important for us to question everything and anything and not take someone’s word at face value all the time.

Critical Thinking for Corporate Professionals

If you are wondering whether Critical Thinking is only for those who have the time to read serious books and journals, remember that even in the corporate world, it is essential to have cognitive and intellectual abilities where one can sift through the jumble of information and data and make meaningful conclusions.

For instance, when professionals and executives want business news and information as well as data regarding the future trends, more often than not, they turn to reputed sources instead of relying on the “Breaking News” stories which sometimes are thinly disguised attempts by rivals and those who are paying for it to push their point of view.

Example of the Demonetization Exercise

Indeed, critical thinking in one’s career is as important as it is in one’s life. Consider for example the recent Demonetization exercise in India. Throughout the entire process, business professionals had a need for the impact that DeMo would have on their businesses and the resultant effects on the sales and other future forecasts.

Now, in this situation, there is an acute need for accurate and reliable information in addition to valid and realistic data on the nuances and the fine print of the DeMo exercise. For this to happen, businesspersons need to necessarily look to objective analyses and more importantly, use their critical thinking skills to make their judgments regarding the impact of the Demonetization on their businesses.

Develop an Eye for Detail and a Nose for Objectivity

Thus, what is needed is an ability to think for oneself rather than falling prey to WhatsApp rumors or Social Media “Chatter”. This can only come through by developing an “Eye for Detail” and a “Nose for Objectivity” without being distracted by the humungous information that we are bombarded with.

In addition, even for those who are not at the top and are middle-level managers, they often need to follow their instincts and rely on their own thinking if they have to judge what is in their best interest and what is against their interests.

Critical Thinking for Students

Coming to the students and others just beginning their careers, it is very important for them to inculcate critical thinking as a habit right from their student days so as to have a well-developed faculty for making independent decisions and not relying on misinformation or disinformation.

For instance, consider the number of recruitment scams and fake companies that take money from students and then cheat them. Unless one knows whom to believe and what to believe, the chances are that one can easily fall prey to such scams if one does not think for oneself and instead, blindly follows others.

Conclusion

Lastly, as this article has pointed out earlier, do not for a moment think that critical thinking is only for intellectuals and not for laypersons.

Indeed, anyone can think critically for themselves anytime and more importantly, at this present time when one is bombarded with so much information that is confusing and confounding and hence, more than anything, critical thinking is badly needed if we are to keep our head above the sea of information overload which can drown us unless we learn to think for ourselves.

All You Need to Know about Data Security and How to Protect yourself Online

Data Security in the News for All the Wrong Reasons

The issue of data security has been in the news in recent months. First, there were reports of hacking of computers in the Presidential Election of 2016 where Russian hackers were alleged to have hacked into the computers of the Democratic Party and reveal insider information designed to help Donald Trump, who was the Republican Candidate to win.

Next, in recent weeks, there was much noise about how Facebook had allowed Third Party Apps to access the personal data of its users and thereby compromising on the issue of protecting such data which is the cornerstone of their privacy policy.

Lastly, in India, there was much controversy over how the Governmental flagship Biometric Identification project, Aadhar, and the data associated with it was compromised by sundry individuals. In addition, the news is full of how so and so corporate was hacked and its sensitive data stolen along with reports of individuals being scammed online and how their bank accounts are being hacked.

Thus, it can be said that in an age where almost all are online either through computers or through Smartphones, data security has become the Holy Grail of our times.

Why Data is the New Oil and What it Means

What these incidents reveal is the increasing importance of personal data to the Tech companies and how access to such data can indeed make them and their partners very rich.

Indeed, many experts opine that Data is the New Oil wherein access to consumer data for data mining and harvesting the personal information for marketing and advertising as well as more sinister purpose of profiling them or targeting them with criminal intentions has now taken center stage.

Thus, the Big Five Tech Giants, namely, Facebook, Amazon, Apple, Google, and Microsoft, are all collecting humungous amount of personal data from their users and harvesting such data for profit.

Further, the fact that these firms also sell such data to Third Parties means that the problem of data security extends to unknown realms as well wherein anyone who has that data can use for both good and bad purposes.

In addition, since personal data is valuable for anyone who wishes to target such users by marketing and advertising as well as for political and economic purposes means that all of us have to be extra careful in what we reveal about ourselves online and how much personal information are we sharing with sundry firms.

How to Protect Yourself Online

So, the next time you sign up on a website or an app or even for that matter, allow Third Party Apps to access your Social Media accounts, be mindful of how much and what information you reveal about yourself.

Indeed, while annoying ads and intrusive marketing might seem bothersome, there is other more important and sinister ways in which your data can be used for nefarious purposes. For instance, pesky telemarketers might bother you with their incessant calling and mails as well as mobile messages, sometimes; it can extend beyond this and include hacking and other criminal activities targeted at your bank accounts as well as other vulnerable financial aspects.

All of us who are online would have received emails, calls, text messages, and other targeted marketing and some of us would have no doubt experienced the scam mails asking for contact information that can lead to you losing money in the process.

Thus, no one is safe online and hence, one has to be very careful about what and how much information one reveals as well as the Digital Footprints one leaves behind on the internet and indeed, on Smartphones as well.

The Tech Firms and the Governments Have to Act as well

Having said that, it is also the case that no matter how much we try, there are some basic details which we have to share online. For instance, how many of us can avoid having Email Accounts and how many of us can desist from using Smartphones for browsing and communication as well as shopping and eCommerce and mCommerce.

Further, when the Government collects personal and biometric information about us through Aadhar and other initiatives, we really do not have a choice but to part with such information.

Thus, it is incumbent upon the Tech firms and the Government who collects and gathers our data to use it in a safe and reliable manner as well as have robust safeguards against the nefarious use of such data.

In addition, we can also subscribe to security providers who shield our online behavior and warn and protect us when such services feel that we are giving away too much information or accessing dangerous websites and apps.

Indeed, it is a very good idea for those who spend a lot of time online to go in for identity protection as well as secure protocol based apps that block unwanted content from being downloaded on our computers and Smartphones.

Conclusion

Lastly, as mentioned earlier, since Data is the New Oil, the battles over data mining and data harvesting are only going to become shriller and hence, it is high time the regulators and the other stakeholders design measures and put in place measures to ensure that our data and personal information is secure online.

In addition, it is also our personal responsibility to ensure that our online and mobile activities are secure as well as we only reveal what is needed and be extra cautious when we allow login using our social media accounts.

Optical Character Recognition and E-Invoicing

Automation of business processes has become the single objective of every multinational corporation. Automation saves a lot of money in the long run. It also streamlines the process and makes it more robust. In the recent past, two technologies have helped companies automate their accounts payable departments. These two technologies are optical character recognition and e-invoicing. In this article, we will have a closer look at these two technologies as well as their advantages.

Optical Character Recognition

In the past, companies had an accounts payable department. The task of this department was to collect all the paper invoices from their supplier. The information from these paper invoices had to be entered into the system. Once this information was present, all the boring stuff like taking approval for invoices, and actually paying invoices also had to be done manually. This process was obviously very expensive and wasteful. A large number of people had to be hired to do mindlessly do data entry jobs.

The introduction of optical character recognition technology has brought efficiency and cost-effectiveness to the process. The steps followed to manage invoices via optical character recognition (OCR) process have been mentioned below:

• Read: The first step in optical character recognition (OCR) process is to make sure that all the invoices can be read by the computer. This can be done by scanning paper invoices and converting them into a machine-readable format. The other formats like e-mails and PDF are already readable by machines. There are software tools available which train the computer to extract information from invoices. Hence, the role of data entry operators can be completely eliminated. Few employees might be required to validate the business information. However, by and large, the process will be automated and will run on its own.
• Route: Once the invoice information has been extracted, it needs to be routed to the correct personnel for internal approvals. All companies have their internal approval processes in place. These processes depend upon the dollar value of the invoice being posted. Sometimes, these also depend upon the type of invoice being posted. Most optical character recognition (OCR) tools also provide the technical capabilities required to get these invoices approved. Once again, this saves time and the workflow software deployed is more efficient than the e-mail approval processes that companies tend to have in place.
• Management: The invoice posting and payment process need to be monitored for efficiency. This creates the necessity of reports that allow tracking of pain points and enable quick resolution. Optical character recognition (OCR) tools have an inbuilt capability to configure out of the box reports. These reports automate the management information systems(MIS) process as well.

Downside:

Although the optical character recognition (OCR) technology-driven processes might seem to be a godsend, they also have their disadvantages.

• Technology Intensive: Implementation of optical character recognition (OCR) tools converts the accounts payable department into a technology-intensive department. This means that the maintenance and management of processes will have to be done by technology experts. The skillset required for this are very different. Hence, companies either have to hire new workers or they have to subcontract their work to technology companies. This leads to increased costs and increased dependence.
• Upfront Costs: It is true that per invoice processing costs are drastically reduced. However, a significant layout is required upfront. These costs need to be recouped from the savings. Hence, the implementation of these tools only makes sense if a large number of invoices are processed. If the number of invoices processed is small, then a longer time will be required to reach breakeven and then there are chances that the technology might become obsolete.

E-Invoicing

E-invoicing is different from optical character recognition (OCR). It can be said to be the next level of technology. This technology recognizes the fact that the disparity between the vendor and the company’s system leads to duplication of processes. For instance, there is a person employed at the suppliers end to create an invoice. Then another person needs to be employed by the company to enter the same invoice. Instead, if the two systems were connected, the information entered once could be electronically transmitted to the other system and the duplication of efforts could be stopped.

E-invoicing tools provide a common platform where suppliers and customers can enter information and transmit to the other party. Since these tools are connected to the ERP systems of both parties, they can provide real-time status updates, and the coordination effort between the two departments is also drastically reduced.

Most e-invoicing tools give flexibility to their customers. This means that both parties can decide the extent of information that they want to share with their counterpart. The idea of e-invoicing has been derived from the idea of a paperless office. All information including purchase orders, invoices, credit notes etc. is transmitted electronically.

To sum it up, there are a lot of tools in the market which allow for easy automation of the accounts payable processes. The adoption of these technologies is increasing at a fast pace. Within a few years, these tools will become standard and accounts payable processes as we know them now would have become obsolete.