ENTERPRISE INFORMATION MANAGEMENT

ENTERPRISE INFORMATION MANAGEMENT

Introduction

Information management in enterprises has been the driving factor for organizations in the 21^st century. Technological innovations and inventions have seized the information management sector for organizations, purging paper-work and initiating flexible, effective, and efficient systems. The innovation of relational databases gave rise to the creation of sophisticated data storage. The increase in information technology has allowed for the development of multiple information management systems that are designed to perform critical functions in organizational management. Organizational charts have dictated the type of informational systems that are produced by organizations and their relevant tasks. According to Bocij, Greasley, & Hickie (2015 p.220), information systems are designed to accomplish specific organizational functions. These distinctions have resulted in different information systems, including Transaction Processing System (TPS), Management Information System (MIS), Decision Support System (DSS), and Executive Support system (ESS). These I.S. systems are designed to complete operational, tactical management, senior management, and executive management functions, respectively. Also, organizational charts resulted in more sophisticated information systems called the Enterprise Resource Planning systems, which were invented to streamline enterprise management functions. The ERP system operates on a unified database that serves all departments of the organization. ERPs were designed to work on a principle that ensures centralized data collection and distribution in the organization. ERP breaks the redundancy of standalone databases that use discrete inventories and spreadsheets by providing a shared database that serves all organizational departments. The aim of the paper is to explain the application of information systems in organization management by:

• Identifying the types of information systems
• Analyzing the application of ERPs
• Assessing the benefits and limitations of ERPS
• Giving recommendations of the application if IS in organizational management.

Information Systems

Information systems are the sociotechnical organizational software platforms that are implemented to collect, distribute, process, and store information. According to Bocij, Greasley, & Hickie (2015 p.221), these information systems contain computer-based interfaces that allow people to interact with the platform. Organizational structures have impacted the design and implementation of information systems, which has led to the categorization of these systems. The distinct categories of information systems include Transaction Processing System (TPS), Management Information System (MIS), Decision Support System (DSS), and Executive Support system (ESS). These systems run on unique algorithms that serve the designed purpose. These information systems are dependent on each other are related, as shown in fig. 1.

Fig. 1: Information Management Systems

Transactional Processing Systems are technological applications that are used to record daily business transactions in the organization. Bocij, Greasley, & Hickie (2015 p.221) explained that TPS systems are designed to support the function at the operational management level. The main objective of TPS systems is to deposit information about inventory flow, outstanding dues, and how many sales have been made daily. The stored information allows operational managers to decide on an appropriately structured routine to manage the business’ operations and also give detailed answers about their performance. An example of operational level support that TPS systems offer includes the banking systems in banks. In cases where one needs a bank loan, his/her employer needs to have a memorandum of understanding (MoU) with the bank to enable them to access the loan services. If the applicant’s employer has an MoU, the employees of the bank need to verify it via a TPS system, which either rejects or accepts the verification. This process is made faster with TPS systems, which replaced the hustles of paper works. Examples of TPS systems include Payroll Systems, Airline Booking Systems, and Point of Sale systems.

The management information systems are applications that are designed to support the functions of a tactical manager. The algorithms of MIS systems allow tactical managers to monitor the organization’s performance. The MIS interacts with the outputs of the TPS system as its inputs in completing the designed functions. Routine algorithms such as comparisons, aggregations, and summarizations are implemented in these systems to enable them to perform real-time analytics of input data (Ali, 2019 p.84). The reports produced by MIS systems that will allow tactical managers to gain insights into a wholesome standing point of the business, which helps them to monitor, control, and make informed future predictions. Such systems include the budgeting systems, sales management systems, and human resource management systems. These systems get information from T.P.s systems such as point of sale systems and employee management systems and create insights through statistical data categorization and representation methods. Tactical managers use the given information to make semi-structured and structured decisions for organizations.

Decision Support systems application that is designed to enable the function of senior management. According to Cioca and Filip (2015 p.12), DSS systems provide senior management officers with information that allows them to make non-routine decisions for the organization. The DSS systems are interfaced with multiple internal and external systems to leverage a wide range of information bases. The internal systems that provide inputs to the DSS include the TPS and MIS. The principal objective of the DSS systems is to provide the organization with working solutions to unique and frequently changing problems. The systems allow the organizations to research the critical impacts of some issues, such as employee performance or consequences of scenarios such as the entrance of new competitors in the market. DSS systems run on sophisticated mathematical and statistical algorithms that evaluate metrics to provide solutions. Examples of DSS systems include the Financial Planning Systems and Bank Loan Management Systems. These systems enable managers to evaluate alternative approaches f achieving organizational goals.

The executive Support System (ESS) is an information system that is designed to facilitate and support the information and decision-making requirements for the senior executive teams of organizations (Moynihan, 2011, p.356). The systems are sophisticated in their interfacing and allow the executive teams to have easy access to internal and external data that is useful to the organizational needs. ESS could be considered as a specialized form of DSS. ESS systems emphasize the power of graphical representation of data and easy-to-use interfaces that offer strong reporting capabilities.

ERP Systems

Enterprise Resource Planning Systems are software programs that support organizational processes, including sales, procurement, manufacturing, and product development. According to Bocij, Greasley, & Hickie (2015 p.222), ERPs systems serve as streamlining assistants that aim to automate functions as well as improve their overall services. ERPs offer distinct solutions from suppliers and integrated functions that assist in the accomplishment of various internal processes like sales, distribution, production, finance, and human resource management. It is arguable to posit that ERP systems play the core function of ensuring the fulfillment of supply chain functions.

The design of ERP systems is based on single and defined data schemas that ensure a common database serves organizational functions. Bocij, Greasley, & Hickie (2015 p.224), explains that the data unification in ERPs is meant to ensure that the information is used across the entire enterprise through normalization. The core constructs are integrated with the organizational functions that are driven by workflows in various departments, including human resources, finance, marketing, and operations. The integration connects the systems and the individuals who use them.

The main principle of ERPs is ensuring a centralized data collection and distribution in the organization. ERP breaks the redundancy of several standalone databases that use discrete inventories and spreadsheets by ensuring all organizational departments are served by a common database (Bocij, Greasley, & Hickie 2015 p.225). Key departments can create and store information that is used to the organization in the database. The application of a unified database was also implemented to ensure that the organization benefited from high levels of data integrity. ERPs are designed to ensure that data fields and attributes are rolled up incorrect accounts. Various tasks performed in the organization can be captured and analyzed centrally, which offers a unified, outstanding receivable report that is devoid of errors.

A case application of ERP is in the BMW motor manufacturing plants. The company has procurements needs for its parts and components from various suppliers. The company employs its ERP system, Just-In-Time, to track their requisitions and purchases for the goods (Balint, 2017 p.239). The company also ensures that all components across the processes are fed by uniform and clean data that is integrated into the workflows of the enterprise, as well as its reporting, analytics, and business processes. The application of an ERP system at the company has ensured that suppliers get information about when they need to deliver their supplies. The company can assess the reliability of suppliers and plan for alternative options in cases where suppliers are unable to deliver. Just as the ERP at the organization is called, Just-In-Time, BMW has been able to implement high levels of concurrency in its operations – achieving sustainable lean production lines. Since the operation of modern companies depends on data, the ERP system has enabled the functions of data collection, organization, analyzation, and distribution.

Benefits of ERP Systems

ERPs are organizational assets that streamline the running of the organization by unifying, protecting information, producing easy-to-use reports, and automating processes. The capabilities of ERPs are multitudinous, from the daily running of the organization to decision making for long-term benefits. Distinct benefits can be drawn from evaluating the importance of making ERP investments. Organizations gain a unified cost of information technology. Although the investment in ERP is a substantially huge investment, it improves the efficiency of organizational planning by unifying its I.T. costs (Staehr, 2010, p.213). ERP systems save organizations from the disintegrated costs of multiple systems that need dedicated infrastructure, licenses, support, and staff. The application of ERP systems reduces the cost of training end-users since they are only required to learn a single system. The systems are modular despite the integration of multiple functional areas, accounting, HRM, CRM, and SCM.  These integrations allow users to only specialize in the interface that is aligned with their needs, which makes ERPs easy to use.

ERPs give the company total visibility as they allow unified access to vital processes on the business by making information more departmental and easier to access by all stakeholders. ERPs allow managers to monitor the current standing of the business in key aspects such as inventories, including future consignment. This capability improves the management functions of the company and impacts informed decision making. Also, the company’s departments can rely on this centralization to improve their collaboration. Complete visibility allows the organization to have coherent workflows and processes with seamless interdepartmental tracking (Sadrzadehrafiei, Chofreh, Hosseini, and Sulaiman, 2013 p.226). Through visibility, companies can implement quick and confident decisions. ERPS improve the reporting and planning functionalities of the company. The implementation of ERPs in an organization enables it to gain a unified reporting system for each process. The ERP becomes the single source of truth for the organization, which makes it easy to generate real-time reports and analytics. Organizations limit the risks of informational discrepancies through the system, which ensures that reports, plans, and any other forms of decisions are made from an informed perspective.

Limitations of ERPs

ERPs are expensive to install in the organization. Software companies that develop ERPs make huge investments and valuate these tools expensively, thus high prices. The learning curve of using ERPs is longer and requires more time to understand and make meaningful use. Experts in the use of these utilities might take advantage of their skills and demand for higher wages. Also, handling all the data in one database makes the organization’s data vulnerable to cyberattacks (Staehr, 2010, p.51). A single attack would jeopardize all operations in the organization. This is a high risk that organizations should develop a walkaround approach to cushion its operations and data safety, thus incurring additional costs.

Conclusion and Recommendation

Information management in enterprises has been the driving factor for organizations in the 21^st century. Technological innovations and inventions have seized the information management sector for organizations, purging paper-works and initiating agile, effective, and efficient systems. Information management systems have been designed to ensure there is proper management of information in organizations. Information systems ensure that there is an elaborate collaboration among organizational departments through the exchange of vital data. Information systems also enable the efficient and effective accomplishment of tasks within the organization. Systems such as the TPS serve an important role in recording data at the operational level, which is used by subsequent systems to help in planning and decision-making. ERPs have revolutionized information management systems through the development of centralized databases that serve the whole organization. Centralizing information storage has increased the integrity of information systems as these systems provide a single source of truth. ERPs have proven to be cheaper for organizations as all organizational management interfaces are bundled in one package, which unifies the cost of equipment, compared to separate systems, and reduces the costs of training.

The benefits and opportunities for information management systems impact the recommendations in this paper. First, the security of information systems should be enhanced since they handle an organization’s critical data, that would be exploited by cybercriminals to leverage businesses. Companies that produce ERPs should integrate their systems with data analytics solutions that are powered with artificial intelligence to ensure they improve the services they provide to companies. Organizations that implement ERP systems should ensure professional security analytics on their system regularly to check possible loopholes that might be exploited by cybercriminals.

Bibliography

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