Information technology and business are becoming inextricably interwoven. I don't think anybody can talk meaningfully about one without the talking about the other.Bill Gates
It is said that 'don't give manager, what he said he wanted, But what he meant he wanted.'
Information systems are become the essentials in the time of technology revolution. The graph of the investment percentage is continuously increasing upwards. Now the situation is like that if the firm want to be success then it must have standard Information systems. The information systems can help the in the vast areas from transaction to top level decision making. It help to reduce the price, increases the efficiency, result of less time in decision making, quicker problem solving and many more. Here we will discuss the basics of information systems, characteristics, applications at each level of management, security concerns by the example of leader in the dairy products, AMUL INDIA.
The fact that I have entered into IT-related business is proof that businesses have to evolve and keep with time. One has to re-invent continuously.Kerry Packer
In the 21st century, Information Technology is at the core of most business activities. It provides the foundation that enables today's organizations to function and flourish. Now business is in the midst of adjusting to information revolution. A business office without a computer has become almost a contradiction in terms. Information systems form an integral part of modern organizations and businesses. Business and the environment in which it is conducted have changed dramatically overtime and will continue to evolve.
Trends in business have dictated new roles for information and information systems creating new opportunities. Now it is impossible to meet new levels in business without IS and that is why the organizations who failed to meet these critics in information systems have become far away from market.
At the end of the day, Amul collects 447,000 litres of milk from 2.12 million farmers; by doing further process it converts it into its own branded milk foods, packaged products and supplies goods of Rs 60 million to over 500,000 retail outlets across the country. Here we will see how Amul handles all of this with the help of its Enterprise routine system.
FINDINGS-Definition of Information Systems:
"An information system is a set of interrelated components that collect (or relative), process, store, and distribute information to support decision making and control in an organization" (Laudon & Louden, 2004)
Characteristics of standard business information systems:
- The information by the system should be relevance to the decision situation or the goals and objectives to the enterprise.
- The information by the system is reliable and precision should be high.
- The information should be in the current form.
- The scope of the information should be high.
- The degree of the information to which information analysed and aggregate should be high.
The following trends are expected in this business information revolution
- Everyone has a communicator that rectifies, analyses, identifies, acts as a credit card and also as a key.
- Commerce will be commonly operated in networks.
- Delivery chains will be customised so that physical products will be assembled close to the clients using standard parts and elements.
- Service will be available for 24X7.
- Distance of work will be increased as most of the people work in information.
- Delivery mediums are engaged directly to the customers and they are automated networks.
- Labour markets will be exists where work is offered on the internet and that may happen that people accept posts often without seeing the employer.
- There will be vast and faster change in the customer services models.
'A fundamental change in economics of information is underway- a shift that is less about any specific new technology than about the fact that a new behaviour is reaching critical mass.'(Austin & Mcfaren, 2001)Functional areas of Information systems in business:
- Human resources
- Customer services
Barriers to Information systems:
- Privacy of customers
- Privacy of employees
- Social imbalance
- Language challenge
- Time and distance challenges
INFORMATION SYSTEMS AT DIFFERENT LEVELS-
- Lower or Operational level Management
The people at this level make Operational decisions.
Most decisions at this level require easily defined information that relates to the current status and activities within the basic business functions.
Information needed at this level is of micro level that means it includes day to day or routine transactions and information.Need of Information systems at this level:
Operational level managers carried out the tasks defined by the middle managers and for that they need the basic transactional information to achieve this task. The transactional information generally is of big volume and it's difficult to carry out information manually. It consumes more time and may be not accurate if done manually. So by the use of information systems enterprise can do it with the maximum efficiency in the less time and less efforts.Transactional processing Systems:
Definition: An organized collection of people-procedures, soft wares, databases and devices used to record completed business transactions. (Ralph & Reynolds, 2008)Characteristics-
Transactional processing systems must follow the ACID characteristics.
MAGIC EYE (developed by EASTERN SOFTWARE SYSTEM)- This software is the advanced accounting tool to have better and quicker access to financial systems and it also allows new customers to save time and more efficient.
AUTOMATIC MILK COLEECTION SYSTEMS collects almost 450,000 litres milk everyday from its different 691 centres. So it is not easy to have transactions in this much volume without the Information systems. The transactional processing systems used by the AMUL are provided by the Akashganga Company. It has its own software for the daily milk collection transactions.
A basic milk collection transaction by Akashganga consists of:
- Measures the weight of the milk collected by weigh scale.
- Fat testing using 'milk-o-tester'.
- Capture of unique member ID of the person by the PC software (Made by M/S. ASN Foss Electric, Denmark compatible with Akashganga)
- Printing of pay slip, with all this data and the amount to be paid.
The benefits of the AMCUS system
- Less time consumption
- Reduction of pilferage
- Reduction of loss due to human errors
- On the spot payments for farmers
- Results in less wastage
- Transparency of operation
- Operational integration
http://planningcommission.gov.in/reports/sereport/ser/stdy_ict/3_amul.pdfInformation systems at Middle level Management:
NEED of the IS at these levels:
At the middle level, managers define the goals to be carried out in detailed operational level.
The middle level managers need to plan and control operations decided by the top level management that includes review, reports in the summery format and the analysis of the information available.
So that the output of the information systems at this level should be the detailed reports of the operations. The middle managers often have to carry out the decisions that are non routine and not the part of structured procedures.
DECISION SUPPORT SYSTEMS:Geographical Information systems
Amul is using Geographic Information Systems (GIS) in a business perspective way. The company uses GIS in main office and leading marketing offices. Using the maps in GIS, the company can make the decision to make the boundary for distributer locations which can be influence by the product wise sales data. This data is then used for sales and distribution planning according to the various zones.
GIS also gives the geographical conditions about the areas from where it collects the Milk, so that it can be conclude about the production of milk. Managers can target the customers from the GIS data so that it leads to focusing the particular customers to increase sales.
AMUL also has implemented the web presence so that CRM goals can be achieved easily by easy means by contacting or presenting the farmers (customers).Information systems at TOP Level Management-
It is important to have correct information in the correct phase at the top level management because they have to make the strategies and goals on basis of that. Information systems help top management to decide the suitable activities which are beneficial for the organizations.
Executive Information systems- This system utilises the data from MIS and TPS then convert into the summarized form that is useful to top management.Enterprise Resource planning:
ERP is the single system that operates all the tasks of the organization.Advantages-
- Elimination of expensive, non-flexible legacy systems
- More efficient, improvement of work
- Increase in access to data for operational decision making
- Initial investment is expensive and difficult implementation
- Inflexible with other systems
- Risks in using one vendor
Leading ERP vendors- ORACLE, SAP AMERICA, BAN, PEOPLESOFT, ROSS, QAD
ERP used by AMUL INDIA-
AMUL was using the ERP developed by the INDIAN INSTITUTE OF MANAGEMENT; Ahmadabad called DAIRY INFORMATION SYSTEM KIOSK.
There is an agreement signed between AMUL INDIA and IBN to establish an SAP ERP to improve the performance but still it is under construction.
This system utilizes data from AMCUS and it converts data in the suitable form that can be useful to gaining. The main aims of the systems are-
- Analysis of data and decision support to help rural milk collectors in improving its performance.
- Analysis of data to improve performance yield from cattle.
- Carrying out the data analysis to improve the sales.
- There is a need to improve a database of milk cattle containing details of past history of diseases, inoculations, artificial inseminations, etc. so that one can suggest improving the production on this basis.
- Information on veterinary related issues and innovations, this will lead the management to encourage the farmers to improve the quality of the milk so that overall quality of product.
The right information at the right time and in the right form makes the difference between the profit and loss in the business. Information security helps managers to secure the information and prevents the unauthorised access of the information.
There are main three aspects of the securing the information:
Confidentiality- Protect the information from the competitors, unauthorised persons and press.
Integrity- Protect the information from the modification and make sure that the information is in correct phase.
Availability- The information should be available when we need it.Information can be in any form:-
- It may be a printed or written paper
- It may be stored electronically
- May be in the form of tape or video
NEED OF INFORMATION SECURITY-
Information is the most important asset in the business today. It can be the key factor to get the success. Now days, sharing information is necessary to increase the spam of the business. Information security can be breach at any time in any form. It may be in the form of system failure, unauthorised access, information can be stolen, inappropriate use of information etc. so it is important to have the proper and advanced information security system.
INFORMATION SECURITY IN AMUL INDIA-
The AMUL INDIA has the IBM disaster recovery centre which defines data security policy.
The online transactions are secured by the AT & T secure which ensures the complete data security.
- Anti virus software can be used to protect data from the viruses.
- To prevent the unauthorised access of the information, the data access should be protected with the password.
Vendors- McAfee, Quick Heal, ESET, Symantec
Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.(NIST,2009)
Now a days cloud computing becomes the most famous buzzwords due to its success and acceptance at global level of economics. It now becomes the most growing field of investment than the IT sector.
What are the benefits?
- Cost effective:- prevents the organization from investing large amount to achieve the IT facilities. Cloud computing provides hardware as well as software on the low subscriptions. EXP- salesforce provides the services at 5/month for the basic subscription.
- Large capacity of Storage
- Highly Automated: - Organization does not have to recruit IT professionals to handle the services. They do not have to worry about the maintenance and up gradation of the system as it is handled by the third party or service provider
- Security: - enterprise doesn't worry about the security of the information as the security is very high in the cloud computing.
Organizations can store more data than on private computer systems. They do not worry to increase the capacity of the database.
Cloud computing is the most compatible and user friendly than any others.
No need to have access only from the offices. User can logged on from anywhere. http://web2.sys-con.com/node/640237
- No control over data handling and information.
- Have to be dependent on the third party for the security of data and information.
- What happens if the remote server goes down?
- Requires the constant internet connection
AMUL has around 650 retail chains to sell about 5m liters food products. There is a need of large database at AMUL to keep this all transactions and information. It also has the GIS that also occupy the large amount of data. Its not easy to maintain and upgrade large database.
AMUL spends the large amount of money for training the employees for IT. By accepting the cloud computing AMUL doesn't require to more no. of IT professionals and not to spend money on training programs.