Integrated Business Information Systems

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Integrated Business Information Systems

 

Abstract

Integrated business information systems (IBIS) help an entity to deliver services and products more efficiently by availing up-to-date information in a timely manner. This paper discusses the need for and use of IBIS to support business operations and decisions. The need for IBIS arises from business factors that require an entity to have a timely, consistent and effective response to external and internal environment challenges. This arises since IBIS allow effective sharing among stakeholders within and external to the organisation thus enabling the entity to provide relevant information to decision makers. Availing of relevant information in a timely manner allows the entity to provide services in a consistent manner at different service points, respond to changes in the external environment more readily, and develop strategies that allow them to compete effectively even in the case of disruptive changes in the external environment.

 

Integrated Business Information Systems

Organisations are increasingly using information systems to support their strategies in order to adapt to the business environments that are changing rapidly. Integration of information systems has become a common trend to ensure the effective accomplishment of organisational goals. Information is an essential tool for any business to succeed in the competitive world. Modern business organisations need information about different aspects such as sales, customers, stock, orders and inventory. This information needs to be accurate, integrated and up-to-date in order for the organisation to benefit from it. Organisations collect vast amounts of data about their processes, consumer behaviour and suppliers. Such information is important as it helps the organisation to monitor its performance and enable it to make changes that will help it meet the needs of the customer better. In the subsequent discourse, this paper evaluates IBIS to highlight how they benefit organisations by enabling such organisations to meet the needs of their customers, both internal and external, more readily. Further, the role of information and communication technologies in organisations will be explored followed by a discussion of the business information needs of knowledge workers as well as managers. Finally, the requirements for the management of information systems are discussed.

The Nature of Integrated Business Information Systems

IBIS enable an organisation to integrate different areas of its business such as sales, human resources, planning, marketing, inventory, finance and purchasing. It involves the development of software applications that enable the sharing of information and communication between different functions of a business (Nicolaou, 2010). All the departments of an organisation have different systems that are specific to their tasks but these systems are interconnected such that information from each department can be shared. Through information sharing, an organisation is able to organize information into facts that boosts decision-making.

Initially, organisations developed or bought separate business information systems to support their activities (Doom, 2010). Such separate information systems caused inefficiency in organisations due to aspects such as lack of interoperability thus presenting various challenges when information from one unit is needed in a different unit. For example, the processing and handling of business data in the organisations was prone to errors and was time consuming. It was not possible to share data between departments and if the employees needed to use data from one system, they would have to extract it and then enter it manually into another system. IBIS were developed to support diverse business functions by integrating all the data and ensuring its access by different departments. As such, departments that have requisite authorization can view information available in a different department.

IBIS supports organisation’s supply chain by integrating different functions starting from the acquisition of raw materials up to the delivery of finished products to consumers. IBIS enable the integration of the activities of distributors, suppliers and consumers (Nicolaou, 2010). In this way, the systems allow entities to integrate customer feedback in subsequent product or services by collaborating with stakeholders such as suppliers who are upstream in the supply chain. IBIS ensure that a single application is used to support diverse business operations thus reducing interoperability problems that cause inefficiencies. All processes are integrated with the information that the organisation’s supply chain creates being accessible by stakeholders who have relevant authorization for access. This enhances efficiency and improves reporting since it provides more timely information that can be integrated into periodic reports.

 

The Need for Integrated Business Information Systems

IBIS have become a common phenomenon in most organisations today. The shift from the reliance on separate information systems for each function to integration was necessitated by several factors. There was a need to enhance efficiency in organisations and eliminate redundant procedures. Moreover, there was a need to enhance consistency across all departments because of increasing errors in organisational operations. It was also necessary to embrace integration because employees were wasting a lot of time communicating with each other.

There is a need for IBIS in order to enhance the common use of software, hardware and data resources. The advancement in information technologies has enabled an increase in connectivity options and connectable devices. The adoption of IBIS has also been facilitated by the creation of open systems that enable users to freely select hardware from the vendors. The need for IBIS has also arisen from the need for different departments in an organisation to work together and design new products promptly in order to survive in the competitive market (Nicolaou, 2010). The need for IBIS relates to the clamour to leverage the capabilities of information technology to improve the organization’s operations. Another reason for the adoption of IBIS is the move by organisations to interconnect, compress and streamline their business processes. Many organisations are shifting towards integration to remove redundant processes, reduce ambiguity and reduce costs. Initially, business information systems were poorly coordinated and thus, they needed to integrate them. Integration helps businesses to be efficient, increases information sharing capabilities, and reduces duplication of operations.

The Purpose of Integrated Business Information Systems

IBIS enable organisations to improve their efficiency. They reduce the time needed to complete processes. Furthermore, the need to enter the same information into different systems is eliminated and this leads to a reduction in errors. Furthermore, the number of calls to verify information between different departments is reduced. All these translate into cost reductions that provide entities with resources to serve their customers better.

IBIS also enhance consistency in organisations. Having an integrated system means that an organisation has one set of data. Therefore, the data remains consistent regardless of the department or shift performing the tasks (Doom, 2010). Moreover, materials used in the organisation have the same description regardless of where they are being used. In addition, the information about the organisation’s customers is consistent in all the departments thus enabling the entity to provide consistent service at all customer contact points. Therefore, IBIS enhances consistency by ensuring that every department has access to the same data and also reduces unnecessary communication.

IBIS also enable all the users conducting different processes or in different departments of the organisation to use the same application. This saves the organisation’s costs as only one central system is required to support all the business processes (Doom, 2010). With modern advances in technology that allow increased virtualization, the inefficiencies that may be associated with system overloads are eliminated. IBIS also enable members of an organisation to have a general idea of all the processes in the organisation to facilitate efficiency and accuracy. The availability of information from different processes and departments facilitate better planning, improved customer service and timely error detection.

IBIS have led to the streamlining of work processes and have made them much easier and interesting. The adoption of IBIS has also led to stronger customer relationships since the employees who interact with the customer have the information that they need to provide value-added services. IBIS can support the management of different functions such as employee information from different departments. Employee information showing progress in their duties can be accessed easily and thus enable the human resource manager to better manage them.

The Role of Information and Communication Technologies

Recent developments in Information and Communication Technologies (ICTs) such as electronic mail, Electronic Data Interchange and World Wide Web have transformed the way organisations operate. ICTs play a very important role in the running of organisations. ICTs enable organisations to save inputs, improve product quality, reduce costs and achieve higher levels of flexibility (Mouelhi, 2009). ICTS also play a pivotal role in supporting communications and networking among employees in organisations. Therefore, they reduce coordination costs (Bloom, Garicano, Sadun, & Reenen, 2009). ICTs support various organizational functions like quality control, inventory control and information gathering. Besides, monitoring technologies support the production process by reducing the number of supervisors (Hanna, 2003).

According to Olugbenga (2006), ICTs enhance service delivery and organisational productivity as they are used for communication, collaboration, strategic management, knowledge management and decision-making. ICTS have played a key role in ensuring the reduction of operational inefficiency and improved decision making in organisations. ICTs have also enabled organisations to increase their capabilities, reduce costs and improve coordination. According to Irvine and Anderson (2008), ICTs have enabled organisations to eliminate the disadvantages of space and place. Organisations are able to form closer supplier and client relationships as well as operate efficiently on a global scale because of ICTs. ICTs also enhance service quality and this increases the satisfaction of customers. ICTs are therefore an important strategy for organisations to stay competitive.

ICTs play an important role in an organisation’s supply chain management because they accelerate the flow of information along different levels, leading to a more flexible and efficient system that can quickly respond to changes in the market (Asabere, Oppong, & Kusl-Sarpong, 2012). They enable organisations to interconnect their systems thus reducing inefficiencies associated with ordering and delivery of ordered goods. ICTs are increasingly being used by organisations to reduce cycle time, improve the agility of the supply chain, ensure timely delivery of products to consumers and enhance efficiency (Asabere et al., 2012). ICT has enabled organisations to manage their supply chains through online communication systems, with the Internet enhancing interactivity between organisations and clients.

According to Fasanghari, Roudsari and Chaharsooghi (2008), ICTs play a pivotal role in organisations’ purchasing operations. Organisations are utilizing ICTs in various aspects of the procurement process including communicating with vendors, making purchases and checking the price quotes of vendors. Negotiations with vendors are also facilitated by ICTS and the use of face-to-face negotiations is on the decline. The bargaining of agreements and prices is done through the use of ICTs. Processes such as receiving vendor queries, order status, order placement and processing returns is done using ICTs (Doom, 2010). Order processing costs have gone down as a result of ICTs and errors in the procurement due to easy detection and correction.

Organisational also use ICTs in the management of transportation and logistics to monitor vehicles at distribution centres. ICT has facilitated the tracking of the transfer of goods in order to ascertain the reliability of the carriers as well as the safe delivery of the goods. Organisations also use ICTs to manage various operations. The management of an organisation’s inventory is enhanced by ICTs especially in the communication between vendors and customers regarding stock outs. The implementation of Electronic Data Exchange programs by organisations has facilitated communication with their clients as well as the smooth running of the operations of the company (Asabere et al., 2012).

ICTs also improve the relationships between suppliers and buyers. ICT enhances collaborative relationships by increasing the suppliers’ communication processing which reduces uncertainty (Fasanghari et al., 2008). Moreover, ICT leads to the reduction of transaction costs between suppliers and buyers, leading to better relationships between them (Grover, Teng, & Fiedler, 2002). ICTs have also been useful in managing customer relationships. Moreover, ICTs have enabled organisations to communicate with customers in different ways. ICT enables customers to send complaints to the organisation. This enables the organisations to respond promptly to ensure satisfaction of the customers, leading to the improving their relationships.

Business Information Needs for Managers

Business information refers to important information that is related to an organisation’s activities, operations and business environment. Such information is a very important resource for managers. Managers need business information to make various decisions. The development of information and communication technologies has made it easier for managers to acquire business information. Managers need to access credible and current information in a timely manner since information facilitates decision-making and communication (Parvez, 2012). Sustained growth of a business depends on the managers’ ability to make sound decisions based on accurate and timely business information.

Managers need different types of business information. They need information on the external environmental in order to be able to make appropriate decisions for the good of the firm. External environment information includes government policies, economic trends, technological environment and factors of production (Gupta, 2011). Managers also need information about financial policies, taxes and political stability in order to adhere to government policies and make informed decisions about their businesses. They also need information about changes in technology in order to determine their impact on the organisation’s products and operations. Managers also require information on economic trends that affect the firm. These include wages and price levels, consumer disposable income, and economic indicators such as productivity, employment and capital investment (Gupta, 2011). Managers also need information on factors of production such as the availability of labour, capital and raw materials. Availability of such information helps managers to make strategic decisions that help the entity to remain competitive even with disruptive environmental events.

Managers also require internal information about the operations of the organisation in order to determine its strengths and weaknesses. They need information about supply factors including capital and labour in order to be able to develop plans for achieving the objectives of the organisation (Gupta, 2011). Moreover, they need information about sales forecasts in order to make other internal plans for the organisation. They also need information about the organisations’ policies as well as its financial plan. The financial plan is important because it shows the organisation’s allocation of resources such as materials, employees and administrative expenses and links all the firm’s activities (Parvez, 2012).

Managers also need competitive information. They need to know information about the competing firms’ strategies, product mix, distribution channels and advertising campaigns to enable them evaluate their own strengths and weaknesses (Gupta, 2011). They also need to know the industry demands for their products as well as the capability of the firm to meet those demands in comparison to the competitors’ capabilities.

Managers in different levels have different business information needs (Singh, 2007). The top management is involved in strategic activities of the firm. The middle management is concerned with the tactical activities with the aim of fulfilling strategic objectives and goals. The operational managers are concerned about the daily activities of the organisation. In order to cater for the business information needs of these management levels, different management information systems have been designed. The top management is concerned with activities that will be accomplished after several years. The top managers need information about the source of the required resources such as materials, manpower and money to accomplish the strategic plans. The top management needs information from both external and internal sources (Parvez, 2012). The middle management is concerned with plans that can be accomplished within a shorter period of time such as one to one and half years. The middle managers need information to execute tasks such as the introduction of new products, achievement of growth in market share, market segments and sales plans. Operational managers need information to execute daily and weekly tasks such as machine loading, inventory and production (Singh, 2007).

Business Information Needs for Knowledge Workers

Knowledge workers are employees whose tasks involve the acquisition, distribution, storage, manipulation and analysis of information. They include programmers, data analysts, teachers and lawyers, among others. Knowledge workers are very important in ensuring the success of an organisation (Schultze & Boland, 2000). The number of knowledge workers is growing and it is vital to increase their productivity by meeting their business information needs to increase the overall productivity of the organisation. Knowledge workers use information as well as creativity in their unique work situations. They deal with ideas and use mental skills as opposed to physical strength to solve problems and complete their tasks.

Knowledge workers need factual information in specialized areas in order to perform their roles effectively. For example, sales representatives need information about products as well as the consumers’ preferences. Knowledge workers also need to access and find information to perform their roles. Widespread information may create a challenge to knowledge workers who need to find only the information that is relevant to their tasks (Schultze & Boland, 2000). Thus, they need to have skills in finding information and they need to know the sources containing the desired information as well as how to locate the relevant information within those sources (Schultze & Boland, 2000). IBIS can help in this regard by providing information that is only relevant for particular activities. This reduces the time the knowledge workers have to waste sorting through information to get the information they need.

Knowledge workers mostly appear to be independent workers as they perform tasks such as writing of reports on their own. However, they depend on their colleagues and they need knowledge from other people in order to accomplish their goals. Thus, knowledge sharing is an important need for knowledge workers. Colleagues share information on engineering designs and scientific experiments (Schultze & Boland, 2000). Knowledge workers also need various software tools to be able to perform their functions. Some of the tools are used in specific domains such as the design tools used in engineering. Other tools are relevant for every knowledge worker; these include emails and word processors.

Knowledge workers need to access relevant information in order to complete their current tasks successfully. The availability of relevant information is important for their productivity. Knowledge workers also need tools that enable them to switch to the next task quickly and easily (Schultze & Boland, 2000). They need flexible access to information for both anticipated and unanticipated information needs. Knowledge workers need platforms that allow easy location and sharing of information, but secure enough to avoid unauthorised access.

Requirements for Managing Information Systems

Information systems are very important in the management of modern enterprises. The management of information systems requires resources such as data, people, software, hardware and networks in order to transform data into information through activities such as input, storage, processing and control (Malik, 2005). One of the major requirements for the management of information systems is people. The people include the information system specialists and end users. The information system specialists are responsible for creating and operating the information systems and they include software developers, system analysts and system operators. The end users utilise the information systems and the information extracted from them. Knowledge workers are the most common end users of information systems. Another requirement for the operation of information systems is the hardware resources that are used to process data and they include computer systems and other media. Software resources are also necessary for the operation of information systems and they include programs, procedures, application software and system software.  Another requirement is the data resources organized into knowledge bases and databases. Network resources include communications processors, media and network access software (Malik, 2005).  Information system produces information in various forms like paper report, electronic messages, multimedia documents, graphic images, visual displays or audio messages.

Several activities are carried out in the management of information systems. Input activities include the capturing of data on business transactions and inputting it through recording and other data entry activities. Input activities include data selection and entry, web site clicks and online queries. Processing activities are conducted when data that has already been entered into the system goes through sorting, calculating, summarizing, comparing and classifying in order to convert it into information that is useful to the end users. Output activities ensure that the processed data is available to the end users through printing or display. In addition, storage activities involve the retention of processed information in an information system so that it can be used later (Malik, 2005). Control activities refer to the use of security measures such as passwords to limit access to the organisation’s databases. to find out if the established standards are being met is another monitoring and control activity.

Conclusion

This paper highlights the pivotal role that IBIS play in organisations. The discussion has revealed that IBIS enable the sharing of information and communication between different functions of a business. The adoption of IBIS resulted from aspects such as the need to eliminate inefficiency, inconsistency and time wastage. Additionally, a clamour to increase connectivity, create of open systems, survive in the competitive markets, and streamline business processes facilitated the development of IBIS. IBIS improves efficiency, eliminates redundancy, improves consistency, saves costs and strengthens consumer and supplier relationships.

With respect to the role of information and communication technologies in firms, ICTs are argued to enhance product quality, increase flexibility, reduce costs, better service delivery, and increase organisational productivity. Furthermore, ICTs support various supply chain processes such as purchasing, logistics and relationships between suppliers and buyers.

Concerning the business information needs of managers, information on the external environment, internal environment and competitive environment has been found to be critical to managers’ decision-making processes. Managers at different levels of the organisation have different business information needs. With regard to knowledge workers, information needs include access to factual, relevant information, and information sharing capabilities. Such uses of information systems make various factors essential for managing information systems. The major resources for the management of information systems include data, people, software, hardware and networks. Management of information systems includes activities such as inputting data, processing, storage, control and output. For an organisation, adopting IBIS would thus enable it to deliver timely, efficient, and consistent service to its client thus ensuring it meets their needs even in the dynamic business environment.

 

References

Asabere, N.Y., Oppong, D., & Kusl-Sarpong, S. (2012). A review of the roles and importance of information and communication technologies (ICTs) in supply chain management (SCM) of organisations and companies. International Journal of Computer Science and Network, 1(4), 70-78.

Bloom, N., Garicano, L., Sadun, R., & Reenen, J. (2009). The distinct effects of information technology and communication technology on firm organisation. NBER Working Paper Series, 14975. National Bureau of Economic Research. Retrieved from http://www.nber.org/papers/w14975.pdf

Doom. C. (2010). An introduction to business information management. Brussel: Asp/Vubpress/Upa.

Fasanghari, M., Roudsari, F.H., & Chaharsooghi, K. (2008). Assessment of the impact of information technology on supply chain management. World Applied Sciences Journal, 4(1), 87-93. Retrieved from http://www.idosi.org/wasj/wasj4(1)/13.pdf

Grover, V., Teng, J., & Fiedler, K. (2002). Investigating the role of information technology in building buyer-supplier relationships. Journal Association of Information Systems, 3, 217-245. Retrieved from https://buyersupplier.wiki.tum.de/file/view/Investigating+the+Role+of+IT+in+building+BSR.pdf

Gupta, H. (2011). Management Information System.  New Delhi: Hitesh Gupta.

Hannah, N. (2003). Why national strategies are needed for ICT-enabled Development. Information Systems Group (ISG) Staff Working Paper No. 3, June 2003. Retrieved from http://www.unapcict.org/ecohub/resources/why-national-strategies-are-needed-for-ict-enabled-development

Irvine, W., & Anderson, A.R. (2008). ICT (Information communication technology), peripherality and smaller hospitality businesses in Scotland. International Journal of Entrepreneurial Behaviour & Research, 14(4), 200-218. doi:10.1108/13552550810887381

Malik, A.G.A. (2005). Management Information Systems. Delhi: Firewall Media.

Mouelhi, R.B. (2009). Impact of the adoption of information and communication technologies on firm efficiency in the Tunisian manufacturing sector. Economic Modelling, 26, 961-967. http://dx.doi.org/10.1016/j.econmod.2009.03.001

Nicolaou, A. I. (2010). Integrated information systems and transparency in business reporting. International Journal of Disclosure and Governance, 7(3), 216-226. http://dx.doi.org/10.1057/jdg.2009.27

Olugbenga, F.I. (2006). Strategic application of information and communication technology for effective service delivery in an organisation. 6th Global on Business and Economics, October 15-17, 2006. GUTMAN Business Centre, USA.

Parvez, A. (2012). Information needs of managers in Indian financial institutions. Annals of Library and Information Studies, 59, 64-73. Retrieved from http://nopr.niscair.res.in/bitstream/123456789/13919/1/ALIS%2059(1)%2064-73.pdf

Singh (2007). Information System Management. Delhi: APH Publishing.

Schultze, U., & Boland, R. J. (2000). Knowledge management technology and the reproduction of knowledge work practices. The Journal of Strategic Information Systems, 9(2), 193-212. http://dx.doi.org/10.1016/S0963-8687(00)00043-3

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