A strategic plan for internationalization of an organization’s operations exposes it to large amounts data. Analysis of such data is essential as the basis of making decisions based on the acquired information. To accomplish this agenda, the employment of information management systems becomes inevitable. Such systems can be manual or automated such that they run on computer platforms in a virtual environment. Manual systems require an organization to employ large numbers of employees.
Their number increases geometrically as the size of an organization’s market increases in case Tech Lab Inc. does not deploy the management information system (MIS) to ease the data analysis process. However, from the perspective of Tech Lab Inc., a hypothetical company, such an approach introduces ineffectiveness and inefficiencies in decision-making, especially where decisions from different departments are to be fed into a central platform to arrive at an overall decision to execute a particular chore.
The current paper introduces ERP as an MIS strategy for handling customer relationship challenges, supply chain management, and manufacturing function challenges of Tech Lab Inc. It claims that arriving at the targeted marketing decisions in good time aids in determining the appropriate alterations to business practices to win more customers. This plan calls for Tech Lab Inc.’s attention. Continued use of its current information management systems, which are highly dependent on the interaction of human decision makers (department heads and general managers) with segregated information systems that run on different computers, makes the location of past records that contain customer communication hard to access.
Automated data processing systems are inevitable in an organization that has global operations. Successful exploitation of the large consumer markets requires a means of collecting, storing, and processing data from supply and logistics chains. The data includes consumer information and supplier records. The data is significant in developing marketing planning and strategies for enhancing the competitive advantage. Although manual data processing systems can help in making these important business plans, the excessive time spent in retrieving, collecting, processing, and storage of manual files makes such systems unattractive in the modern technologically perceptive business operational environments. The relevance of the designing and implementation of automated information systems is particularly attractive for Tech Lab Inc., a theoretical organization based in the US, which produces and services medical equipments.
For Tech Lab Inc., data remains crucial in making various strategic decisions for an organization. Its collection and storage, followed by analysis, require the possession of information management tools. Indeed, every organization seeks strategic plans for growth in terms of size and productivity levels. Growth increases difficulties in handling customer and supply chain complaints due to the large amount of information that requires analysis and synthesis.
Different organizations deploy different types of information management systems to handle big data. At medium-sized organizations, such as Tech Lab Inc., common information management systems are ERP systems, CRM systems, SCM Systems, Management Information Systems, Decision Support Systems, Executive Information Systems, Enterprise Portals, Data Warehouse and Data Mining Applications, Enterprise Collaboration Systems, and Knowledge Management Systems among others.
The current paper presents an information system that integrates decision support and transaction support systems into a sponsor organization (Tech Lab Inc). The MIS provides solutions to its information management challenges that arise from its strategy for expanding its business operation to include international markets. The proposal targets at convincing the sponsor on the appropriateness and effectiveness of the proposed new system. Therefore, the paper provides all the necessary information concerning the proposed system, including its analysis, the new system implementation challenges, and the steps of the Systems Development Life Cycle (SDLC).
Situation that prompts the Necessity for a New Information Management System at Tech Lab Inc.
Tech Lab Inc. makes vital decisions based on consumer information on the consumption and preference patterns of medical equipments. This situation requires the collection and subsequent analysis of a large amount of data. The situation indicates the need for collecting, analyzing, and managing big data. To this extent, one wonders what roles information management systems would play at Tech Lab Inc. when it comes to the collection and analysis of suppliers and consumers’ data to enhance success of the implementation of the organization’s internationalization strategy.
Tech Lab Inc.’s operations face various problems in the continued effort of the organization to resolve its supply chain and customer relationship problems together with complaints in a timely manner. This situation is a major problem that may hinder the success of the company’s internationalization strategy. Fui-Hoon and Lee-Shang (2001, p.285) assert, ‘in a fiercely competitive environment, business strategy not only determines success, but also governs business survival.’ This claim draws the attention of Tech Lab Inc. to put in place ways of developing a mechanism for responding to the matter and ensuring ardent reaction to marketplace demands. Otherwise, Tech Lab Inc. can suffer from devastating effects that accrue from the declining competitive advantage.
The increasing number of people that Tech Lab Inc. needs to attend has created problems in the organization. Thus, it requires urgent solutions. For example, increasing the number of customers calls upon Tech Lab Inc. to look for ways of attending problems such as quick location of the customers and determining the frequency of purchases for each customer. Therefore, making decisions that pertain to market targeting has proved problematic over the past few years following the rapidly increasing clientele levels. The overall implications encompass making Tech Lab Inc. suffer from the inability to forecast its production to meet customer expectations and demands.
The above challenge is even more significant upon noting that making target marketing decisions in good time results in challenges, especially in determining the appropriate business practices that can increase clientele levels (Grant et al. 2006). The current information management systems at Tech Lab Inc. largely depend on human decision makers. Such people include the general managers and the heads of department. In terms of operation, the systems run on a number of computers in a segregated fashion. In this capacity, it becomes incredibly hard to find and trace communication concerning customer orders, their complaints, location, and even any other relevant information that may be deployed in ensuring quick delivery or facilitating effective sequencing of the production processes.
In executing transactions between the suppliers and Tech Lab Inc., it is necessary to have all information relating to particular suppliers stored in one computer. Alternatively, there should be a means of accessing information held in different computers that are run by different departments by simply running a specific program on one computer. This strategy can increase accessibility, retrieval, and integration of information.
Holding information in different computers creates difficulties in preparing all documents that carry specific transactions. This challenge forms a major hindrance to the attainment of the strategic plan of the company. The challenge is more clear upon considering, ‘every minute staff spends on editing or otherwise generating paper work is an extra minute they are being less productive than is ideal’ (Head 2005, p.65). Therefore, a solution is necessary to enhance speedy preparation of documents ranging from invoices, shipping labels, purchase orders, receipts, and customer communication to the preparation of manufacturing plans based on customer demands. This way, Tech Lab Inc. can build its competitive advantage around satisfaction of its customers together with other stakeholders, especially the suppliers.
In addressing problems noted in the above section, the integration of the information management systems is necessary. This move can enhance rapid decision-making. Rapid decision-making is required for an organization that has many stakeholders. Contribution of the stakeholders in an organization influences its activities (Dehning & Stratopoulos 2003). In the context of Tech Lab Inc., integration and automation of information management systems can be realized in three main ways. The first option entails designing and implementing decision support systems. Secondly, the organization can design and implement, design, and implement transaction-processing systems. Thirdly, it can design and implement an MIS that integrates these two systems. The appropriateness of any of the options depends on the SWOT analysis of each option.
Decision support system is strong in terms of helping to make various decisions based on the analysis of data and statistical projections. Transaction processing system has the strength of offering mechanisms for data gathering, its storage, displaying, modifying, and/or cancellation of transactions (Mureell 2001). Decision support systems create ways for improving the quality of the decisions by Tech Lab Inc.’s managers, as opposed to replacing managers who are overwhelmed by the increasing amount of data that has to be processed to yield information necessary for making effective decisions. Davenport (2003) reveals a major strength of transaction processing system arguing that through it, an organization acquires opportunities for conducting multiple transactions in a simultaneous manner.
Data collected via transaction processing system may be stored in databases. After accessing it (data) from the databases, Tech Lab Inc. can produce reports on billing, inventories, schedule for manufacturing, develop check registers, and/or process employee wages (Fryling 2010). Transaction and decision support systems share common threats. Their security poses a mega challenge. For the transaction processing system, the appropriateness of the transactions overly depends on the accurateness of the information maintained within an organization’s databases.
Decision support systems perform tasks slowly. This situation also reduces the speed with which decisions can be made. The weakness arises from the fact that decision support systems interact with human decision makers. By considering the strengths, weaknesses, and opportunities of both decision support and transaction processing systems, Tech Lab Inc. needs to take advantage of the strengths and the opportunities of both designs. Hence, an integrated information system may serve to resolve the challenges of Tech Lab Inc. in an effective manner than just designing and implementing one of these two options. Considering the data that has to be processed at Tech Lab Inc., Enterprise Resource Planning (ERP) is the most appropriate.
System Development Life Cycle
The development of an ERP system software solution for a complex and big organization such as Tech Lab Inc. calls for combined efforts of architects, system analysts, program developers, and testers. This human resource collaborates in creating millions of codes that are customized to suit the needs of Tech Lab Inc. In achieving this goal, various system development life cycles (SDLC) may be adopted. Examples of models for SDLC are cascade, corkscrew, rapid prototyping, and incremental model among others (Parag et al. 2008).
Tech Lab Inc. can adopt the waterfall (cascade) model. The model comprises cascaded chronological phases. The stages are divided into project planning or the achievability study, system investigation, execution, assimilation and testing, reception, and maintenance. However, to overcome the challenges of the pure waterfall SDLC model, these stages iterate. As shown in figure 1, even after the completion of one stage in the development process, one can still revert to the previous stages to make improvements, which will influence the next stage until an optimal system is finally developed.
This phase determines a high-level analysis of an intended system and determining its goals while defining various participants in the system development. Planning has activities such as budgeting, resource planning, analysis of risks and their mitigation, scheduling, and staffing (Grant et al. 2006). Cost budgeting forms an important part of the planning phase for any system development life cycle. The new proposed ERP system will cost approximately US$ 2 million. About 55% of the total cost will go to the procurement of the hardware while 20% should be invested in the procuring the software. About 10% goes to meeting administrative costs while 5% should be used in the training of organizational staff on the use and maintenance of the system. The remaining 10% absorbs any unprecedented costs such as expenses associated with system alterations and overcoming low productivity due to delays and reluctance in the implementation process.
The ERP MIS project requires planning of resources such as staffing (human resources) and the rating of support systems (Grant et al. 2006). For instance, the ERP MIS system needs to support Windows NT, UNIX, and mainframe. Planning for major players is also necessary. The main activities that require planning include the initiation of the ideas, making decisions to proceed with the project, and scheduling of the project after selecting the ERP as the main software solution for implementation. Rollout and system configuration should also be done. Key players in the ERP system project encompass Tech Lab Inc.’s team members, internal information technology specialists, vendors, and managers from the functional areas and business units to be integrated under the ERP.
System analysis refines various goals of ERP MIS project. Thus, it involves refining specifications, tasks, and responsibilities. The goal of the new management information system (ERP system) entails enhancing the capacity to solve problems such as quick location of the customers, their records, and determination of the frequency of purchases made by all customers. Besides, the ERP manages manufacturing operations (Fryling 2010). Tech Lab Inc.’s ERP system should have the capacity of changing the current manual information processing and management system that highly depends on the interaction of human decision makers. The current system makes the location of records for customer communication incredibly hard to access. The new system should resolve this problem.
The system design phase describes various features, which may include pseudo codes, business rules, and process diagrams. Figure 2 shows a schematic modeling the ERP version recommended for Tech Lab Inc.
Important challenges of a new MIS system entail issues of system compatibility and/or whether the system’s applications are commercially available or they need to be developed in-house. For example, in case of the ERP system, Tech Lab Inc. may construct it by designing system codes followed by their testing. Construction entails building or developing both software and hardware. Instead of in-house construction of the hardware and software, Tech Lab Inc. can source it from third-party manufacturers. The manufacturers can then customize various applications to suit the information integration requirements for Tech Lab Inc. This option is recommended to save time that is required for ensuring that the new MIS becomes operational. The option also eliminates challenges associated with unlearned system applications.
After identifying an appropriate solution to information management needs of an organization, the next challenge entails how to implement it while minimizing potential hindrances for its implementation. In terms of sourcing the ERP software, bidding marks the first step. Tech Lab Inc. should select bidders based on the price of the bidder. The ERP is an expensive MIS in the short run. Hence, Tech Lab Inc. should cut on the costs of hardware. Therefore, the supplied ERP needs to be compatible with the current Tech Lab Inc. hardware. The hardware supports Windows NT, UNIX, and mainframe.
Implementation of the ERP at Tech Lab Inc. requires change management. This step entails alteration of the processes that employees deploy in executing organizational business. Many operations that were previously executed by the employees manually or with the intervention of computers will now become integrated and automated throughout into Tech Lab Inc.’s processes. Consequently, employees need retraining on how to use the new system. This training is critical in aiding in the sharing of common practice and data within and outside Tech Lab Inc. This arrangement permits production while increasing the accessibility of data and information in real time (Fui-Hoon & Lee-Shang 2001). Consequently, when a decision has to be made at any particular time, appropriate data or information is available to facilitate the decision-making process.
Tech Lab Inc. does not have a technical team to facilitate the implementation of the ERP system. A third vendor should be hired to evaluate the customization needs of the organization for the ERP system to suit Tech Lab Inc. needs. Customization requirements of the ERP should include developing marketing and sales, financial, manufacturing, and human resource applications that suit the needs of Tech Lab Inc. These four applications should correspond to Tech Lab Inc.’s market planning, resource planning, customer relations management, manufacturing management and planning, supply chain management, procurement planning, and finance and accounting practices.
These areas of customization suggest that the scope of the ERP calls for a significant alteration of staff work practices and working processes (Monk & Wagner 2009). Hence, incomplete understanding of various processes before initiating the implementation of the system may lead to failure of the project (Zekic & Samarzija 2012). This case should be avoided at all costs by preparing the employees to embrace the change and/or build their understanding of the system through training and development programs.
Integration and Testing
The supplied ERP software must support the integration of external and internal aspects of information management at Tech Lab Inc. It should have modules for managing manufacturing functions, service and sales, and modules for the running of customer relationships. The system also needs to have capabilities for inventory controls, production planning, and forecasting and procurement among other modules that enhance information flow from the organization to various business functions within and outside the boundaries of Tech Lab Inc. in an integrated manner. More importantly, an ERP system should have connectivity to external stakeholders (Yusuf, Gunasekaran, & Abthorpe 2004). Testing is done to identify bugs or inappropriate decision constructs. Shakedown should then follow. In this process, bugs are fixed together with system reworking, retraining, tuning of the system performance, and/or ensuring adequate staffing to mitigate temporary inefficiencies.
After declaring the new ERP project complete, compiling and releasing various documents that detail different resources that were utilized will follow. The documents are handed over to the sponsors of the project. In this case, the sponsor is Tech Lab Inc. Any project manager endeavours to acquire legal and administrative acceptance of the project subject to its capacity to deliver its objectives and goals that form the main reason for implementing it (Zekic & Samarzija 2012). Upon acceptance of the ERP system, the project manager relieves all staff members of their responsibilities and duties, as the project no longer exists. This period sets the stage for the project owners or sponsors (Tech Lab Inc.) to take over the new ERP system in its operational mode.
Maintenance addresses issues such as what happens after the acceptance and making the system operational within Tech Lab Inc. In the entire life of the new ERP system, corrections, new changes, additions, and shifting of the applications into new computing platforms are unavoidable. Therefore, it is necessary to train staff continuously on the maintenance and software usability. Such staff members are also charged with continuous system monitoring. The goal here is to warrant continuous debugging to increase both the system’s availability and reliability. Reliability is the degree of the ability of the system to execute its function of integrating information into all functional units of the organization. Availability implies the probability that the system will be accessible to perform its functions when required at any particular time.
The problem of addressing customers and supplier information processing due to increased company’s growth has pushed Tech Lab Inc. to develop effective solutions. With the increasing clientele, a large amount of data requires has to be processed to guarantee timely fulfillment of orders and improving products consistently with customer requirements. Thus, Tech Lab Inc.’s current manual information processing system operates in isolation of computer platforms. Its use of human decision makers proves ineffective and inconsistent with the internationalization strategy of the company. The proposal paper has recommended a customized ERP system. If the sponsors (Tech Lab Inc.) accept the new system, it will help in resolving Tech Lab Inc.’s current challenges in its data collection and information processing needs.
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