2.3 Control in Systems

Systems in Management

There are three management levels in any organization: top level, middle level and lower level management.

The following is a description of four types of management systems.

Management Report Systems

			These systems are developed to help managers monitor organization's resources and operations and
			observe the environment in which the organization operates.

The three types of reporting are: Detail reports, summary reports, and exception reports.

The three schedules of reports are: periodic reports, event initiated reports, on demand reports

Decision Support System (DSS)

			DSS help managers make better decisions by answering complex questions and decreasing ambiguity
			of environment in which decisions are taken.

These systems are used by middle and top managers.

It helps them evaluate different alternatives and also offer forecasts for future conditions.

DSS consists of four components: database, knowledge base, model base, user interface

2.3 Control in Systems

Groupware

			It refers to specialized software application designed to help group members to work together and to
			share information and to communicate easily together.

Groupware allows geographically distributed group members to communicate together.

			Groupware is supported by multiple technologies: message systems, multiuser editor, group decision
			support system, intelligent agents, computer conferencing, coordination systems

Executive Information Systems (EIS)

EISs serve top level managers in making long term plan and strategies for the organization.

			EISs not only include financial data, sales, shipments and historical information but also data about
			predictions, opinions, explanations and forecasts.

Typical features of EIS: user interface, communication with employee, scanned news update.

2.3 Control in Systems

Multiple Uses of Information

Organizations may use information in different ways:

Information as resource:

We generally think of people, money, raw materials as information resources.

			Organizational members may also use information to decrease cost or increase the quality of final
			product or service

Information as asset:

Information even if used immediately is rarely actually consumed.

			For example when managers use data about a store sale to determine whether inventory should be
			replenished, the sales data remain available as resource for use in other analyses

Information as commodity:

Like computers, automobiles, sportive machines, or other commodities, information is saleable product.

Some companies use information primarily to sell it.

2.3 Control in Systems

Reengineering

	Reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic
	improvements in cost, quality, speed, and service.

	It combines a strategy of promoting business innovation with a strategy of making major improvements to
	business processes so that a company can become a much stronger and more successful competitor in the
	marketplace.

	Business processes are simply a set of activities that transform a set of inputs into a set of outputs (goods or
	services) for another person or process using people and tools.

Business processes are characterized by three elements: Input, processing, output.

There are five steps in reengineering:

Develop the business visions and process objectives.

Identify the processes to be redesigned.

Understand and measure the performance of existing processes.

Identify the opportunities for applying information technology.

Build a prototype for the new process.

2.3 Control in Systems

Continuous Improvement

	Continuous improvement is constantly seeking ways to improve the business processes to add value to
	products and services.

The concept relies on successive small improvements to bring about a big change over a period of time.

	Instead of changing the process completely, only minor modifications are made to the process and over time
	they accumulate to provide big benefits.

	Continuous improvement involves constantly modifying and seeking ways to improve products and services to
	remain competitive and to keep strong customer relationship.

Technology Diffusion, Infusion and Acceptance

Technology diffusion is a measure of how widely technology is spread throughout the organization.

Technology infusion is the extent to which technology is deeply integrated into an area or department.

	The technology acceptance model specifies the factors that can lead to higher acceptance and usage of
	technology in an organization, including the perceived usefulness of the technology, the ease of its use, the
	quality of the information system, and the degree to which the organization supports the use of the important
	system

2.3 Control in Systems

Outsourcing and Downsizing

Two strategies to manage costs are outsourcing and downsizing.

	Outsourcing refers to contracting of a service like employee recruiting and hiring or product sales promotion to a
	third party outside the organization.

Outsourcing advantages:

Make costs more explicit.

Ease staffing.

Enable employee focus on business.

Extends the traditional small business benefits of flexibility and responsiveness.

Outsourcing disadvantages:

Locking the outsourcing company into a long-term contract.

Relinquish control in an area of potential strategic advantage (3) create complicated financial problems.

Downsizing, also called rightsizing, is reducing the number of employees to cut costs.

2.3 Control in Systems

Advantages of downsizing:

Make the daily operations of a business more efficient.

Increases profits by reducing the overall overhead of a business.

Shut down the redundant departments.

Disadvantages of downsizing:

Employee morale hits rock bottom.

Lines of communication within the company are weakened.

Employee productivity drops.

High priced consultants must be hired to help link the business back together.

The lost time, waning productivity, and devastated other employees' morale create hidden costs.