Information System Strategy

Table Of Content
Description Page

1.

Statement of objective

2.

Introduction...

3.

Information system applications in an organization..........

4.

Factors that influencing the information system development efforts...

5.

Others related issues...

15

6.

Conclusion..

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7.

References..

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1. STATEMENT OF OBJECTIEVE

The objective of this project assignment is to examine and study issues that arise in an organization in delivering an Information Technology (IT) Project.

All medium to large organizations depend on Information Technology for their continued survival. Imagine, for example, communication organizations like Maxis, Celcom, Digi and Telekom Malaysia, Power and Water companies like Tenaga Nasional Malaysia, Jabatan Bekalan Air having to manually calculate millions of customer bills every month or quarter without having specific Information System's help! Clearly the manual clerical effort involved would make it difficult for the organization to make a profit and move forward.

However, there are many issues arise and factors influencing the implementing and delivering of Information System in an organization. These issues and factors are ranging from high level strategic to lower level end users and down to detailed technical issues.
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Nevertheless, delivering Information System in the organization is inevitable in view of the objective of delivering Information System is to provide a logical approach to systems development and a methodology assisting organization in achieving business objectives for company growth and to face competition.

2. INTRODUCTION

Burrough,P.A. and R.A. McDonnell 1998 describes that "An information system is a set of tools for collecting, storing, retrieving at will, transforming and displaying spatial data from the real world for a particular set of purposes". Application of information system in the organizations could increase its competitive advantage, control data security, prepare report documents at the right time and also enable organization to operate efficiently and effectively.

A recent article in the Daily Telegraph IT supplement commented that many large organizations could last no longer than twenty four hours without IT support! There
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should be little wonder that the attitudes to the development of information system have changed over the years from an ad hoc almost cavalier approach to a professionally managed, disciplined, planned, and engineering approach.

Information Technology comprises the following:

Computing the information processing hardware and system software

Communications the telecommunications network

Automation Technologies The main application systems, data and assets of organizations

In today's business organizations, staffs of all level, from top management to lower junior staff, are expected to be IT literate. Being IT literate is not becoming a computer expert, a telecommunication specialist, a system engineer and analyst. Being IT literate is having a general knowledge and understanding of computing technology, telecommunication technology, application software usage, general usage of the personal computer in order to
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have the ability to sit in front of a personal computer and obtain the desired results by yourself.

Technology's impact on business is growing steadily. Once used to automate manual processes, technology has now transformed the nature of work and the shape of organizations themselves. During the late 1960s and early 1970s, many computerized information system were developed to provide reports for business decision makers. The information in these reports helped managers monitor and control business processes and operations. For examples, reports that listed the quantity of sales and inventory item in stock could be used to monitor sales and inventory levels. Unfortunately, many of these early systems did not take overall goals of the organization and managerial problem solving skills into consideration. Even more importantly, these early systems were not developed as part of the business process itself. Hence, many of the early system failed or were not utilized to their maximum level. Today, business organizations recognized that both importance of organizational concept and processes must be considered and supported by the effective information system.

3.

INFORMATION SYSTEM APPLICATIONS IN AN ORGANIZATION

There is no single system that controls every aspect of computing in the organization. Organizations have many information systems serving different organizational levels and functions. These systems can have a variety of relationships with each other. An example of information system in the organization was drawn and illustrated as per Annex 1.
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In general, application systems can usually be categorized as being either routine operational systems or information systems. Routine operational systems are those from which the output directly satisfies a business function such as the printing of invoices, the preparation of pay slips, acceptance of order, etc. Whereas information systems on the other hand, produce information which is subsequently used to administer, manage, control, or to assist management in decision making upon some facet of the business activity of the organization, for example sales forecast, inventory control, financial planning, budgeting etc.

Business organizations apply information system for a number of purposes. Their application is strongly influenced by a business organization's structure and the way particular businesses seek to achieve their goals and also in order to survive. Example, Qantas Airways faced rising fuel costs during 1999 and 2000, came unanticipated had created a pressure on the airline industry. The airline also had to deal with two new domestic competitors, Impulse and Virgin Blue, plus the economy in Australia slowed down in 2000, and the Australian dollar was sinking. Qantas Airways decided its salvation to lay partially in IT with implementation of the Integrated Revenue Information System (IRIS) in April 2002, initiated several nontravel projects with Telstra (Australia's largest telecommunications company). Co-branding of credit cards and mobile phones are two examples of joint ventures undertaken, and took major steps to get into e-commerce. Qantas has introduced a range of e-commerce initiatives

aimed at consumer and corporate customers, travel and purchasing partners. Qantas also operates a special web site for Australian travel agents offering access to Qantas news, information and special offers. The capacity of the site was demonstrated in September 2002 when more than three million hits were recorded in 24 hours. In year 2003, this strategic alliances lay by Qantas has reaped an estimated savings of $85 million (Australian) per year in reduced communications and advertising costs. Also, it expects to increase revenue by
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$700 million (Australian) annually from non-travel sales. Subsequently, many airlines, including United Airlines and Cathay Pacific are involved in similar projects.

However, Qantas Airway faced many issues while implementing the various information systems in the organization. Some staff felt insecure and joined competitors, some put up strong resistance to the new systems and give negative feedback, and some near retirement age senior staff were unable to cope with the new workflow. Nevertheless, with effective efforts and strong determination, Qantas Airway broke through the obstacles and survived!

Even though in most of the cases where organization objective achieved by successfully delivered information system and technology into the organization, however, there are many conscious and unconscious issues and challenges that interrupted and influenced the process of delivering the project. Those forces can be started from the beginning, middle and last stage of implementing such information systems.

4. FACTORS

THAT

INFLUENCING

THE

INFORMATION

SYSTEMS

DEVELOPMENT EFFORT.

The revolution of Information Technology and Information Systems, which came in the wake of the agricultural and industrial revolutions affected global communities and transformed the world. This new revolution is rapidly changing and accelerating globalization, reshaping the country economy and affecting people's work and life at a speed never seen before. Therefore, it has been recognized as a strategic enabling tool to support the growth of any organization. Hence, whenever an organization introducing any information systems, a
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variety of issues and challenges will be encountered during the beginning development and implementation period:

4.1 Organization Culture

Organization culture is a set of major understandings and assumptions shared by a group. Organization culture consists of the major understandings and assumptions for business, a corporation, or an organization. Like organization structure, organization culture can have a significant impact on the development and operation of information systems within the organization. A procedure associated with a newly designed information system, for example, might conflict with an informal procedural rule that is part of organization culture. Organization culture might also influence a decision maker's perception of the factors and priorities that must be considered in determining the objective of a decision.

4.2 Downsizing

Downsizing has two definitions. From the corporate point of view, downsizing is the reduction of people, especially of middle management, to reduce the gap between toplevel management and lower level workers. From the information technology standpoint, downsizing means the movement of applications from mainframes (traditionally) to midrange systems, and high end workstations. This is due to the increased availability of networkable computers. Also, 80% of new applications developed after the year 2000 will
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be for client server like earlier LANs until today Window 2003 server. The changes in hardware technology in terms of cost and size will also accelerate the changes. No matter what, both definitions will mean major changes in the information technology function in terms of skills and expertise and the breakdown of traditional hierarchy structures in the organization.

4.3 Organization Change

Organization change can be caused by internal or external factors. Internal factors include activities initiated by all levels of employees. External factors include "activities initiated by competitors, community regulations, natural disasters and general political plus economic conditions. Introducing or modifying an information system in an organization will also resulted in change. Improving an organization process through information system requires changing the activities and tasks related to the process. This means changing the way individuals, groups, and the entire enterprise work.

4.4 Resistance to Change

In most of the time and cases where implementing information system in an organization, employees at all level are resisted to change due to uncertainty about the causes and effort of change, unwillingness to give up existing benefits and awareness of weaknesses in the changes proposed. Employees are well familiar with existing process, when new system implemented it might streamline the processes which will indirectly become a threat on employees' job security. Employees is not confident in using the new system and it will takes extra time and efforts for them to adapt in using the new system which will adding more work on their daily load. Also, employees confident levels might differ, there are
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some employees will feel that they might not have enough skill in learning of using the new system.

4.5 Poorly Defined Metrics

All system must have proper defined metrics. Metrics need to be relevant and clear. They should be depicted with visual indicators that are easily understood by all level. In addition, metrics need to be collected at the ideal frequency for making decisions, and defined in such a way that the measurement can be consistently applied across the firm, even if their targets of performance differ. A system that has sloppy or inconsistently defined metrics will be vulnerable to criticism by people who want to avoid, accountability for results. Data in computer systems undergo many more processing steps than in manual systems, each of which is open to errors or abuses. Each of these functions - data organization, recording, transmission, processing, storage, retrieval and dissemination requires a separate set of physical, administrative and technical controls.

4.6 Lack of Efficient Data Collection and Reporting

A primary reason that companies overemphasize financial metrics at the expense of other important operating variables is the simple fact that systems already exist for collecting and reporting financial measures. Companies that deliberately plan to define the vital few metrics and commit the resources to automate data collection and subsequent reporting tend to achieve good results. Unfortunately, in most organizations, if collecting metrics data consumes too much time and energy, they will not be captured. That is why it is important to prioritize key performance indicators so can be confident that the investment

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in metrics is spent on the information that will be most relevant to improving organizational performance.

4.7 Lack of a Formal Review Structure

Any new system in organizations works best when they are reviewed frequently enough to make a difference. If a metric value changes on a daily basis and the variables within the control of management can be affected on a daily basis, then the metric should be reviewed on a daily basis. Additionally, metrics review meetings should follow a standard agenda, with clearly defined roles for all attendees and an expectation that follow through on any agreed upon actions will be monitored at each meeting. Finally, review of metrics is ideally cross-functional, including peer groups who have a shared responsibility for process results. It is important to begin these meetings as early as possible in the deployment of a new metrics system. Do not wait until all of the metrics are defined, automated and deployed. Start with the metrics that already have defined and with manual data collection, if necessary. This is an important behavior, which is essential for the success of the metrics program.

4.8 No Process Improvement Methodology

The value of the systems relies on the premise that once performance problems are identified, there is an efficient and effective method for diagnosing and addressing root causes. Solutions can then be developed and performance gaps can be closed. If the organization does not have standard methodologies and toolkits for addressing process problems, the amount of effort required to derive a problem solving approach for each new performance gap could eventually damage the performance improvement program as
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it will be seen as taking too many resources away from daily operations. When this happens, there can be no adaptation and performance will continue to deteriorate.

4.9 Too Much Internal Focus

One major criticism of the new implement systems is that it encourages an internal focus. This is not as much an indictment of the principle as it is the way companies put the principle into practice. To help overcome this problem, it should always start with an external focus - the view of the organization's New System. The goal is to achieve a balance of enterprise level metrics as it will assess the organization's market, shareholders, competitors, employees and stakeholders. For example, manager will use data about their New System to assess Strengths, Weaknesses, Opportunities and Threats (SWOT). This will then guide them to gaps in their enterprise level metrics thereby ensuring that even internal metrics link to external performance drivers.

4.10

Weeknesses Of Controls and Their Implications

Weakness in each general control area of implications of information systems can have a wide ranging effect on the organization. The table below summarizes the effect of weaknesses in the major general control areas:

No.

Weaknesses

Impact

Implementation controls

New systems or systems that have been modified will have errors or fail to function as required

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Software controls: - Program security 2 System software

Unauthorized changes can be made in processing

These controls may not have a direct effect on individual applications. Since other general controls depend heavily on system software, a weakness in this area impairs the general controls Hardware may seriously malfunction or may breakdown altogether. Random errors may occur in a system (most processing will be correct, but occasionally it may not be) Unauthorized changes can be made in data stored in computer systems or unauthorized individuals can access sensitive information. All the other controls may not be properly executed or enforced

Physical controls

Computer operation controls

Data file security controls

Administrative control

4.11

Strategic Applications of information Systems

In the Sales and Marketing section, Service section and System for Business Effectiveness section, the strategic use of information systems are put together to demonstrate their importance and how they are used to maximize the benefits. Information systems become strategic in several ways. Systems can provide a temporary barrier to market entry; they can lock in customers and suppliers by raising the cost of switching; and they can change the nature of the business by introducing new, related products. While strategic systems a alluring, several cautions are in order. Not all

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strategic systems make a profit; they can be expensive and risky to build, and they often require organizational change.

4.12

Training

The most problematic issue with regards to information technology implementation is training and it was being rated by 72% of the respondents as being highly problematic factor. This issue elicited the highest response when compared to all others. Part of the problem with training is that, to be effective it must be a continuous and ongoing process and exercise. In addition, individuals within the organization are at different levels of individual expertise, thus making the training process difficult to organize. The actual training process is complex, regardless of the size and scope of the organization. In many cases, especially for organization in small and medium sized enterprise, information technology training must be outsourced through external consultants or operations. This adds an additional expense, planning problems and serious logistical problems for management with regards to timeframes and scheduling. With the support and expertise of individual end users, no system can achieve its full objectives.

4.13

Syatem Vulnerability and Abuse

Before computer automation, data about individuals or organizations were maintained and secured as paper records dispersed in separate business or organization units. Information Systems concentrate data in computer files that can potentially be accessed more easily by large number of people and by groups outside the organization. Consequently, automated data are more susceptible to destruction, fraud, errors and misused.
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When large amount of data are stored in electronic form, they are vulnerable to many more kinds of threat than when they exist in manual form. For example, an organization's entire recordkeeping system can be destroyed by a computer hardware malfunction.

Some of the most common forms of threat against computerized information are: Hardware failure Software failure Personnel actions Terminal access penetration Theft of data, services, equipments Fire Electrical problems

User error Program changes Telecommunications problems

5. OTHERS RELATED ISSUES

Others than the issues and challenges addressed above during the development and implementation process of information system, organization also encounter others various problems. Those problems can briefly define as

Implementation of new system will incurred high costs, management might not support it. Return on Investment for new system will takes some time due to high costs spent. As fast move of technology trend, system life time need to be assessed before implement to avoid new system will obsolete within a short period after It is implemented.
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Lack of skilled expertise support team which plays an important role to support new system for long term usage. Cost of hiring skilled team is high. Sometimes final system doesn't meet the actual requirement. Changes in automated systems are more costly and often more complex than changes in manual systems No standardization methods for controlling manual procedures. Lack of rapport often exists between IT personnel and management and also between IT personnel and users. Employees feel stress and no proper guidance and motivation. On-line information is even more difficult to control because data files can be accessed immediately and directly via computer terminals. 6. CONCLUSION

With regards to the Information System concept, there was no notion of it in the organizational chart. When it was set up, it was called the Computer Centre or IT Department. Furthermore, there was no organizational structure concerning the Computer Centre or IT Department. This is real case in the Multi-National Company which the writer is attached with Agfa Asean Sdn Bhd that no IT Department in its organization chart and in fact all its IT activities was outsourcing and carried out by a IT company namely T-System Sdn Bhd.

Nevertheless, numerous information systems still implemented over the last few years in the Company. Some proven system has brings benefits to the company's daily
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operation like SAP System. It almost controlled the whole inter-organization's operation, connected Agfa worldwide with instant result. However, there are also some systems which was proven failure, one of it is the BI System implemented in year 2007 to calculate and monitor sales personnel's commission and incentive was not up to date. Sales personnel's commission can only be paid three months later as the systems only can capture the sales figure on quarterly basis. Sales Personnel were unable to view their sales activity day to day which is necessary and important for sales tasks. As a result, the BI System was terminated by end of 2008. New system again will be delivered.

Irrespective the issue of failure or success of delivering new information system in an organization, and spending money on information systems is still somewhat a mystery, obviously organizations still need and sometimes is mandatory to implement new information system and go through the lengthy and difficult process in developing new information system to support organization's operation and management decision.

information technology has become a mainstay in our society. it has an impact on almost every function of our lives. We have truly become information and technology based society. Considering the toe-hold which technology has on our lives it is doubly important that the institutions which provide the frameworks for our society are able to make use of the tools which have become so important for our organization operations. Also, the problems of information system management and

implementation are expanded in this environment due to a number of factors: costs and available resources, expertise levels and technical skills, the nature of technology, the nature of the environment, and ultimately, the organization culture.
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The area of IT development and deployment is extremely problematic and complex. It is a process that involves all the individuals who make up the organization, from top level administrators to clerical staff. In addition, it requires a significant portion of the resources available within the organization, from human to physical. Any approach to IT development and deployment which hopes to be ultimately successful must take into account both the technical and social systems which make up the organization.

Since one of the main functions of Information Systems is to enhance Management's control over the organizational, strategic and decision-making activities of the organization, information systems themselves must be properly controlled to realize this objective. Without proper safeguards, systems are vulnerable to destruction, abuse, error and loss, which can totally undermine the organizations that rely on them. Special measures must be taken during the design and operation of information systems to ensure that they are properly controlled. The control of an information system must be identified as early as possible and an integral part of its design. Users and builders of systems must pay close attention to controls throughout the systems' life spans.

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7. REFERENCES

MIM Module Three Information Technology and Decision Analysl http://www.school.lib.vt.edu/thses/available/etd http://www.flint.umich.edu/-well/courses/bus181/notes/chapter3 http-//www.e-learninq.dmst.aueb.gr/mis/

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