Information System Assignment
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Information System Assignment
Part A: Information Management Needs
Laudon and Laudon (1988) identified 4 levels of information users in the organization: workers, middle managers, senior managers and executive. In line with this, the author also presented a pyramid of systems which reflect the said levels of information users: transaction processing systems, management information systems, decision support systems and executive information systems, which is shown in figure 1. Thus, the four levels of information systems help these 4 levels of information users in different levels of the organization.
Figure 1 Four Level Pyramid Model (Information Users and Information Systems)
Source: (Laudon and Laudon, 1988)
The lowest level among the 4 information users is the worker. Workers need information that are related to short-term decision, thus focus on the transaction of the day-to-day business (Obermeyer and Pinto 2008). Thus, this level of users use transaction processing systems (TPSs) in order to deal with thousands or even millions of transactions with the customers and suppliers (Heathcote 2004). TPSs cope with well-structured routine processes and sustain many of the day-to-day operations of the organization (Visscher, Wild and Fung 2001). It collects source data regarding each business transaction, such as customer order, sales, purchases, movement of stocks, payments, invoices and receipts, which are reported on a regular basis, thus these are vital for control and audit purposes, but offer little usable management information (Collier and Agyei-Ampomah 2008).
The second level managers are responsible in formulation of plans in order to achieve strategic objectives and making different operational decisions, which include resource allocation, employee evaluation and short-term goal setting, thus, they need information related to general and specific information requirements (Obermeyer and Pinto 2008). With this, management information systems (MISs) are needed because it help management to control and plan the organization (Heathcote 2004) by summarizing data from operational and knowledge level systems (Barnwell 2007). Reports are commonly standard but information needs additional processing – extracted from standard reports to spreadsheet for manipulation and analysis by the managers (Collier and Agyei-Ampomah 2008).
Senior managers are responsible in strategy formulation, therefore, both internal and external information about the organization are vital (Obermeyer and Pinto 2008). Decision support systems (DSSs) can help in order to access data which offer the managers the ability to stimulate and ask ‘what if?’ questions in order to consider different options. For instance, DSSs will help managers to manipulate selling price in order to see its impact towards the volume and profit of the organization, which will be helpful in pricing and profitability decision-making (Collier and Agyei-Ampomah 2008).
The top of the pyramid is the executive. This level of management are responsible in long-term objectives, goals and strategies of the organization, thus, it is important to acquire information about the entire operation. Executive Information Systems (EISs) are used for decision support, which incorporate access to different summarised data, commonly presented in graphical form in order to help senior managers to evaluate and assess information about the organization and its environment. EISs smooth the process of drilling down facilities to move from aggregated data towards a more specific and detailed degree (Collier and Agyei-Ampomah 2008).
Part B: Call Centre Mini Case
A. Strategic Decision-Making and Call Centre
Call centres are centralised operation where in trained agents communicate with customers via phone and with the use of purpose built information and communication technologies. The normative model of call centre organisation is that tasks are tightly prescribed, routinised, scripted and monitored (Houlihan 2001). With this, the questions whether the information or data to be gathered in this means of communicating with the customers is questionable. However, in the ideal world, every customer will be catered as if she is the only customer of the company. Thus, ever communication and interaction she has with the company will be enlightened by all the important information regarding her needs and demands. In addition, all of the information that she expressed regarding preferences and background will be saved and will be brought to bear on the interaction in intelligent manner. It is not just a matter of collecting data and storing it in a back-office database wherever, where it is reported on and forgotten, but, it must go into two directions. When a company knows something about a customer, it must use that knowledge in order to establish the relationship between the two parties. Furthermore, it must do so in relentless manner, in order for the customers to reach the point where she is doing business with the company because she has so much invested in the company that it’s simply easier than switching to a competitor (Dawson 1999). With this, information gathered by the agents and the computer system can be used in strategic decision-making, particularly those related with the improvement of the products and services being offered by the company. It can also help in order to further improve the customer relation management of the company, which can help in order to drive and sustain customer satisfaction and loyalty.
B. Call Centre and Insurance Company
Insurance company can take advantage of the general or typical benefits being offered by call centre to any organization which will use it. It can offer competitive advantage because it can help in order to improve some of the fussy procedures and information flows inside the organization.
First, it can help in order to improve the customer relation management of the company. This is because, the callers or the customers will be immediately connected to the office, where they can directly transact their business minus long waiting time, therefore, it can offer the clients the quick access to information that they want to have, which improve relationship with the customers (Fritzgerald n.d.). For example, the case of Interpolis (www.interpolis.nl) a large insurance company in Netherlands. The company gained competitive advantage by establishing its “Damage-Claim Services” call centre. This enable the company to stop using intermediates or agents to report insurance damage claims, instead, it enables the clients directly report their damages instead of indirect reporting via intermediates or agents. The agents have the adequate training and knowledge regarding the different products and services being offered by the company and they are well-equipped to answer questions and enquiries about damage report (Feinberg, de Ruyter and Bennington 2005). As a result, it can also help in order to improve the efficiency of the company, due to the fact that its customers can be connected towards the office in easy manner, at the same time, they can connect to the company any time they want, because call centre offers 24/7 services. Above all, it can also help insurance company to save money, time and effort, because it is possible just to hire outsource call centre service. With this, insurance company that are processing thousands of claims daily can be backed up by call centre – without hiring additional personnel or staffs or installing extra phone lines in order to meet the volumes of caller, it can be done by simply hiring call centre (The Lead Tree, LLC 2010). With this, insurance company can gather information which can be helpful in decision-making, at the same time, improve their customer relation management process.
Part C: Information Systems and Internet Technology
A. Types of Information System
The common types of information systems are: Transaction Processing Systems (TPSs), which support central activities (i.e. customer order processing, accountant receivable and warranty claim processing (Shelly, Cashman and Rosenblatt 2007)); Management Information Systems (MISs) (i.e. online payment and ordering system), which support managers in decision-making in operational level of the company; Office Automation Systems (OASs), which support secretarial needs (i.e. word processing, e-mail); Decision Support Systems (DSSs), which support specialised managers and users (i.e. medical diagnosis, bank loan verification system); Executive Information Systems (EISs), which support members of the strategic management level (i.e. drill drown tools (Umar 2003)); Intelligent Support Systems (ISS), which support managers who are included in the first two levels of managements as well as the internal specializes consultants which the need for support regarding the critical issues from Artificial Intelligence (AI) techniques (i.e. intelligent agents (Sugumaran 2007)); and Knowledge Management Systems (KMSs) which support businesses to establish and share information (Matsatsinis and Siskos 2003).
B. Internet Technology
Internet opened a wide door of opportunities to an expanding company. The Internet is considered by many businesses as one of the main aspects or elements in marketing procedure. The report of ACNielsen in 2005 alone shows that 1/10th of the population of the world or 627 million people are doing buying products and availing services online. Thus, the Internet offers a vast market, which will be helpful in profitability and sales. In addition, Internet also help to decrease costs of marketing process, because it can help to remove or lessen some of the important but costly aspects in marketing, which include the place and promotion. With this, Internet helps to decrease the cost of expansion and introduction of product, expands the market, improve competitiveness, improve the image of the business, and increase sales and revenues (Intrapairot and Srivihok 2003, p. 199).
On the other hand, the materialization of the intranet dramatically changed the way information are being accessed inside the organization (Terplan 2000). It is like a closed-circuit television system, which can only be viewed by those people in the organization which own the system (Lowe 2009). Thus, it can only be viewed by those who are inside the network of the organization. With this, intranet will be helpful in order to enable the members of the organization to take advantage of accessibility and flexibility of the Internet in terms of information system, at the same time, take advantage of its security and confidentiality, because although intranet is using the same protocols as the WWW, it is protected from the outside world via firewall (Matthews, Matthews and Poulsen 2003).
Part D: Problem Solving and Information Processing Methods
A. Problem Solving
There are different problem solving techniques and tools which can be used in any level of organization. This can help in order to tackle the problems which can be huge, overwhelming and excessively complex. These tools can offer starting point in solving small and big problems. These include: cause and effect diagrams, affinity diagrams, risk analysis, swot analysis, Pest analysis, Porter’s five forces, the Boston Matrix, core competence analysis, USP analysis, critical success factors, the McKinsey 7Ss and the Greiner Curve.
The cause and effect diagram or known as the Ishikawa Fishbone diagram can help in order to consider all the possible causes of the problem rather than one source. In addition, affinity diagrams or known as the KJ (from Kawakita Jiro) method, which help to synthesize large amounts of data by looking for the connections between ideas, which can help to organize the dissimilar items into a related group. Then, the risk analysis can help in order to have formal framework in identifying the different risks and problems which an organization can be faced. All of these tools can help in order to work out strategies to be implemented, at the same time, controlling them (Mind Tools n.d.).
SWOT analysis (Strength, Weaknesses, Opportunities and Threats) can help in order to focus on the survival and success strategy towards the environment; this will be supported with PEST analysis and Porter’s Five Forces which will help the entire environment, where the business operates. These internal and external analyses of the environment can help organization to focus on the possible source of problems, and the possible solution towards it. On the other hand, The Boston Matrix, Core Competence Analysis and USP Analysis can be helpful in order to come up with the actions and strategies to be done in order to gain competitive edge. On the other hand, Critical Success Factors, the McKinsey 7Ss and the Greiner Curve will be helpful in complex problems of the company, which will be used by the upper management level (Mind Tools n.d.).
B. Information Processing
The four types of information processing are: batch processing, real-time processing, distributed processing and parallel processing. Batch processing exists when data is being collected and stored in files for a while before processing, which makes it more common with data back-up (Behl 2009). Example of this is payroll, when company calculates the wages for its employees and prints the payslips (The Teacher n.d.). In real-time processing, the transactions are processed in order to update a file or to alter any changes in a data right after the transaction occurs in the real life. Examples of this processing are all online-based transactions, ticket booking and reservations (Behl 2009). Distributed processing perform some data processing tasks at the points of the user activity, at the same time, allowing other tasks to be transferred to a centralised computer for processing. The Internet is the classic example of distributed processing because it connects millions of workstations from different locations (Brooke and Paige 2007). Lastly, parallel processing offers a steady flow of work to the computer (Behl 2009). Thus, it focus on taking large tasks, dividing it into smaller tasks, then working on individual smaller tasks in simultaneous manner. Examples of this type of processing are: grocery store and weather forecasting (Mahapatra and Mishra 2000).
Part E: Evaluation of Information System
Evaluation and assessment of information systems is difficult, complex and challenging task. This is because evaluation is interdisciplinary by nature, thus it is designed by both information technology people and the end-users of the system. With this, there are different barriers towards the communication process between the entities involved in the process. First, both of the parties may have difficulty in understanding each other, for instance, it will be hard for IT people to understand medical procedures and terms, then it will be hard for medical people to understand IT-related technical terms, thus, there will be a lack of common tools (Baud, Fieschi and Le Beux 2003). In addition, for instance, in public health informatics, an evaluation commonly deals with dynamic and ubiquitous data and with different information systems. Therefore, system designers, implementers and researchers must develop a comprehensive analysis which includes a broad range of evaluation methods. Furthermore, evaluation process is also complicated because many information applications are extremely complex (O’Carroll 2003).
Because the system is controversial and there is a problems related to the stakeholders of the system, both types of evaluation will be done: Prior Operational Use Evaluation (POUe) – predictive evaluation performed in order to forecast the impact of the project; and Operational Use evaluation (OUe) which is carried out when the system becomes into operational use, which will help in order to justify the adoption of the system (Irani 2002). This will help in order to first, present the possible outcome of the project in order to convince those hesitant stakeholders, then present the end result or outcome of the project based on its advantages and benefits towards the organization and the individual member or stakeholder. Therefore, it will be helpful in order to compare the anticipated result with the actual result, which will enlighten all of the entities involved in the system.
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