Role of HR Consultants in India with respect to IT sector

 

 

 

 

 

Consultancy in India

 

 

Services play a crucial role in our economy. Among services consultancy profession assumes significance as a catalyst of change in the ever-expanding industrial scenario. Consultants help in optimizing use of resources to enhance efficiency and overall returns from a project. Over 1, 00,000 specialists are employed, including nearly 10,000 management consultants. The wide spectrum of disciplines and services provided by Indian consultants range from project identification to commissioning involving, supervision and training of personnel, market surveys, rehabilitation of sick units as well as operation and maintenance. Largest concentration of consultancy organizations is in the four metropolitan cities Delhi (25.7%) has the highest number of consultancy organization among four metropolitan cities followed by Mumbai (25.5%) Chennai (12.1%) and Kolkata (9.1%). Indian consultancy capabilities are strong in several areas such as civil engineering and construction, telecommunication, power, metallurgy, chemical, petrochemicals and computer software. The service provided includes feasibility and market studies erection and commissioning of plant and machinery, system engineering etc.

 

 

 

 

 

Well-dispersed and wide-ranging areas of specialization to service diverse range of clientele needs.

 

 

Advanced technical talents/ skills at reasonable cost.

 

 

 

Familiarity with local conditions.

 

 

 

 

 

 

Introduction   Employment and Unemployment Scenario in India

 

The result of the 61st round of survey by NSSO – National Sample Survey Organisation conducted in 2004-05 provides the latest information on the employment and unemployment scenario in India. National Sample Survey Organisation (NSSO) surveys and generates data and information once in five years.

 

 

Labor force scenario in India

The Indian labor market can be categorized into three sectors:

• Rural workers, who constitute about 60% of the workforce

• Organized of the formal sector, that constitutes about 8% of the workforce

• Urban unorganized or informal structure which represents the 32% of the workforce.

 

 

 

 

During the year 1999-2000, the labour force was estimated to be 407 million. In 2004-05 the labor market consisted of 469.06 million workers and has grown up to 509.3 million in the year 2006. The labour force growth rate accelerated from 1.03 per cent to 2.93 per cent (more than the population growth rate).

 

 

 

The annual rate of employment growth has increased from 0.98 per cent for the period 1993-94 to 1999-00 to 2.89 per cent in the period 1999-00 to 2004-05. The main reason of the increasing unemployment rate is the growth rate of the labour force which is more than the growth rate of employment.

 

The employment scenario in India is dominated by the unorganized sector. As per the data for the year 2004-05, only about 9 percent of the total workforce is in the organized sector (all public sector establishments and all non-agricultural establishments in private sector with 10 or more workers); the remaining 91 percent are in the unorganized sector, self-employed, or employed as casual wage laborers. The organized sector is not growing in terms of the employment opportunities.

The employment growth rate for the period 2004-05 has been recorded at 2.89 per cent i.e. a growth of 1.91 from the previous 0.98 per cent for the period1999-00. The employment scenario in different

Employment Projections

Sector

 

Employment in 2004-2005 (Millions)

Projected Elasticity

GDP Growth Rate (%)

 

Employment Growth Rate            (%)

Projected Employment 2009

Agriculture Forestry & Fishing

267.57

0.7

3.73

2.61

296.62

Mining & Quarrying

2.74

0.82

4.73

3.88

3.19

Manufacturing

53.51

0.34

10.9

3.71

61.9

Electricity Gas water supply

1.37

0.33

6.9

2.28

1.5

Trade, Hotels & Restaurant, Transport, Storage & Communication

64.49

0.45

11.97

5.39

79.56

Financing, Insurance, Real estate & Business services

6.86

0.94

10.33

9.71

9.94

Community, Social & Personal services

35.67

0.28

7.6

2.13

38.81

 

The share of the agriculture and allied activities has fallen from 59.8 per cent in 1999-00 to 58.4 per cent in 2004-05. But, the sector has also absorbed almost half of the increment in the workforce. Also, the employment elasticity of the agriculture and the allied sector stands high at 1.52.

 The share of the manufacturing sector in employment has seen a marginal decline from 12.1 per cent to 11.7 per cent, absorbing 5.5 million share of the incremental workforce.

 The services also increased its share in the employment from 22.7 per cent to 23.4 per cent, absorbing 16.8 million from the workforce during 1999-00 to 2004-05.

The share of the self–employed workers in the Indian workforce has increased tremendously to 260 million.

 

Elasticity of employment

 

The Indian economy witnessed a decrease in the employment elasticity from 0.41 to 0.15 from 1993-94 to 1999-00. But the latest survey has seen this trend being reversed. For the period 2004-05, the aggregate employment elasticity has tripled from a low of 0.15 to 0.48.

With the trends being witnessed, it has been projected that if the economy and the labour force maintain the constant growth rate of 9 and 2.93 per cent respectively, the workforce and the labour force will converge within a short period.

 

 

The Information Technology (IT) sector in India holds the distinction of advancing the country into the new-age economy. The growth momentum attained by the overall economy since the late 1990s to a great extent can be owed to the IT sector, well supported by a liberalized policy regime with reduction in telecommunication cost and import duties on hardware and software. Perceptible is the transformation since liberalisation – India today is the world leader in information technology and business outsourcing. Correspondingly, the industry’s contribution to India’s GDP has grown significantly from 1.2% in 1999-2000 to around 4.8% in FY06, and has been estimated to cross 5% in FY07. The sector has been growing at an annual rate of 28% per annum since FY01.

Indian IT companies have globally established their superiority in terms of cost advantage, availability of skilled manpower and the quality of services. They have been enhancing their global service delivery capabilities through a combination of organic and inorganic growth initiatives. Global giants like Microsoft, SAP, Oracle, and Lenovo have already established their captive centers in India. These companies recognise the advantage India offers and the fact that it is among the fastest growing IT markets in the Asia-Pacific region.

Summarizing some key highlights of the sector in FY06:

Software and services exports were estimated to have grown by 32% in dollar terms to exceed US$ 23 bn. ITeS-BPO exports were estimated to touch US$ 6.3 bn, a growth of 37% IT-ITeS export revenues from engineering and R&D services, offshore product development and made-in-India software products touched an estimated US$ 3.9 bn from US.1 bn in FY05 Sales of Personal computers crossed 4.7 mn units; a growth of 20% compared to 3.6 mn units sold in FY05 As of Dec 06, around 440 Indian companies had acquired quality certification with 90 companies certified at SEI CMM Level 5, higher than any other country in the world The total number of IT and ITeS-BPO professionals employed in India was estimated to have grown to 1,293,000 from 1,058,000 in FY05

The size of the Indian IT industry, according to NASSCOM, has been estimated to be around US$ 47.8 bn. The Indian IT industry can be broadly divided into two markets: domestic market and exports market. The exports market constitutes the largest segment accounting for 75% of the total revenue generated by the Indian software industry.

 

 

The domestic IT market is broadly divided into the following four segments: IT Services, software segment which includes engineering and Research & Development (R&D) services, IT-enabled Services and Business Process Outsourcing (ITeS-BPO), and Hardware. While IT Services accounted for 34% of the total revenue generated by the domestic market in FY06, the Engineering Services,

R&D and Software Products segments together accounted for 10% of the revenue. The ITeS-BPO segment, on the other hand, contributed 7%. Hardware is the dominant segment with a share of about 49%. The domestic IT market grew at a CAGR of 21.9% during FY02-06 to touch US$ 13.2 bn, and is projected to grow to US$ 15.9 bn in FY07, registering a growth of 24% y-o-y.

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The exports market is dominated by the IT services market holding a share of 56.4% in the software and services exports in FY06, followed by the ITeS-BPO segment with 26.7% share and the software products and engineering services segment with 16.9% share.

The Indian hardware industry is at present estimated to be in the proportion of 30% domestic, 1.25% exports and the remaining being imports. The domestic market itself offers tremendous potential for hardware companies, thus having very few companies venturing into hardware exports. Imports of IT hardware which form a large component of the industry are mainly from Taiwan, China and Korea. Lately, however, MNCs in the hardware segment have been viewing India as a hub for setting up hardware manufacturing facilities, for instance Dell.

 

Source: NASSCOM

Indian IT Services exports grew from US$ 10 bn in FY05 to US$ 13.3 bn in FY06, registering a growth of 33.4%, and is further expected to reach US$ 18.1 bn in FY07, posting a growth of 36%. Revenue from ‘projects’ dominated the IT Services exports with a share of 58%, with outsourcing and support & training activities accounting for 33% and 9% respectively.

 

Source: D&B Research

Within the ITeS-BPO segment, Customer Interaction Services (CIS) account for nearly India’s IT Exports XIV 45-50% of the total ITeS-BPO services exports while finance & accounting contributes for the remaining 40-45%. Human resource and other high-end knowledge-based processes account for 2% and 8-10% respectively.

The Software product, Engineering services and R&D segment contributes around 17% of the software and services exports. India is well positioned in the engineering and R&D services segment. Apart from Indian companies offering these services, several foreign companies (both captive and third party) are also setting up base in India to provide these services. Overseas companies operating in sectors like high–tech, telecommunications, automobile, aerospace, heavy machinery, construction and industrial products are looking at off-shoring their engineering and R&D related work to India.

Export intensive: Ever since the industry’s evolution, exports has been the major contributor to the industry. Concentration on Low-end services: Low-end services such as customised software services and maintenance have been the key strength of the Indian IT companies. These companies are now however moving up the value chain offering end-to-end solutions to clients. Labour intensive industry: The very nature of the services offered by the industry makes human resources a significant driver for the industry. Fragmented industry: D&B’s inhouse database has identified over 8,000 companies which operate in the IT space in India, offering a wide range of software products and services. A large number of these companies are unorganised players Skewed concentration: The revenues of the top four companies, TCS, Infosys, Wipro and Satyam, including income of their subsidiaries, account for around 22% of the overall industry. This skewness is all the more pronounced in the case of software services.

While the global IT players are aggressively scaling up their operations in India, due to the advantages that the Indian industry offers, the Indian IT companies are also preparing to tap the global market.

The companies are witnessing significant change with regard to their service offerings and geographical concentration. Today, companies are expanding their service offerings from application development and maintenance to high end services like testing, consulting and engineering designing. The global delivery model has not only facilitated the companies in delivering quality of work but also helped them to control costs.

 

Source: D&B Industry Research Service

Over the years, the Indian companies have positioned themselves well to reap benefits of the emerging scenario in the IT sector.

The Indian IT companies are expanding their service offerings to provide a complete basket of services to their clients. These new services include IT consulting, testing, business process management and IT infrastructure services, which in a way allows the IT companies to de-risk their business from pricing pressures and enter into newer areas which provide them higher growth and profitability.

 

 

 

Indian IT companies have successfully scaled up operations and made a mark in the global outsourcing market, evident from the large deals bagged by the Indian IT companies in the past one year, including the British Telecom-Tech Mahindra deal which was worth US$ 1 bn, the Pearl Insurance-TCS deal (£ 486 mn), the Skandia-HCL Technologies deal (US$ 200 mn) and the Kimberly-Clark-TCS deal (US$ 100 mn). Most of the deals bagged by the major companies were in the Banking and Financial Service space which reiterates the growth in this vertical. As per the data compiled by Technology Partners International (TPI), the Asia Pacific region witnessed a significant increase in total deals amounting to US$ 10 bn in 2006 from US$ 6.1 bn in 2005. Indian companies bagged contracts (above US$ 25 mn) worth US$ 2.7 bn in 2006, with a market share of 25% in the Asia Pacific region.

Cost arbitrage and the availability of a large talent pool has attracted several MNCs to India. Big players like IBM, Accenture, Capgemini and Oracle among others have not only increased their headcounts in India but also outperformed their global performance in terms of revenue growth. Their Indian operations are witnessing strong growth as compared to their global business. Some of the major global companies like Intel, IBM and CSC are cutting jobs abroad and shifting their base to India.

 

Source: D&B Industry Research Service

 

 

 

 

Emerging Markets: In terms of geographical contribution, the US continues to remain the key market for Indian IT companies, accounting for 67.2% of the software and services (including BPO) exports from India. However, Europe is also emerging as an important market for the Indian IT industry, considering the fact that the share of exports to Europe from India increased from 22.2% in FY03 to 25.1% in FY06. After the US, Indian companies are looking at the European region as a potential market for exports and also to expand their global presence. Mergers and acquisitions has been one of the routes that the Indian companies have adopted to enhance their presence in European markets.

Changing Growth Drivers: There has been a change in the revenue composition of companies in recent years. The revenue contribution of high-growth segments such as infrastructure management services, package implementation, testing and consulting has witnessed a continuous increase. This is in sharp contrast to the earlier trend wherein almost all companies were largely dependant on the Custom Application Development and Maintenance (CADM) services segment for their revenues. Today, the share of CADM has decreased to 49% in FY06 from 80% in FY01. Thus, newer service lines are not only enabling Indian companies to increase their sales by cross-selling to their existing customers, but also improving their average billing rates and recognition of being end-to-end service providers.

New End-users: In terms of user industries, the BFSI and hi-tech/telecommunication industries remain the leading verticals for the Indian IT companies. Together, these sectors account for 58% of the Indian IT-ITeS exports. Though these verticals have good growth potential, other sectors such as manufacturing, retail, healthcare, utilities, etc., are also emerging as promising segments for the Indian

IT companies. While the BFSI sector has the potential to provide large size contracts to the IT companies, the manufacturing sector can provide large number of deals/assignments to the Indian players.

Presently, the Indian IT companies are on a hiring spree which indicates their bullishness on their order flows. All the major players have increased their manpower by 15-50%, and the trend is expected to continue further. As a result, the companies are expected to scale up their operations. The Indian IT companies are also vying for inorganic growth, with a quest for newer geographical areas, service offerings, domain expertise, customers and markets.

Though demand conditions have been optimistic, the Indian IT sector is exposed to certain risks which may deter growth. An appreciating rupee, anticipated slowdown in the US economy, shortage of skilled manpower, limitations in domestic infrastructure and competition from other global players offering manpower at low cost like China, Philippines and Vietnam can have a negative impact on the performance of the Indian IT companies.

Besides, increasing activities of global MNCs in India will make difficult employee retention for Indian companies. NASSCOM opines that there will be a shortage of half a million people in the IT and ITeS segments by 2009. With an industry attrition level hovering around 20-25% (often higher for smaller players), companies are likely to offer an increase of 10-15% in salaries in the coming years.

 

 

On the financial front, wage inflation of 10-15% and forex fluctuation can reduce the top line as well as the bottom line of the companies. Unless the Government defers the withdrawal of tax incentives which is due to expire after 2009, IT companies operating out of the Software Technology Parks of India (STPIs) are likely to witness an increase in their tax liabilities, which may reduce their profitability further.

 

 

 

 

 

IT Jobs in India

 

 

 

Information Technology refers to the management and use of the information using computer-based tools. It can refer to both hardware and software. Mostly, it is the term used to refer to business applications of computer technology rather than scientific applications.

 

 

 

Information Technology (IT) can be used potentially in every sector of the economy. Information Technology has been a dynamic sector in many developed economies and India has stood out as a developing country where IT, in disguise of software exports has grown dramatically. Information Technology jobs in India are the first choice career for the bright brains who are growth oriented and innovative. Hence, IT jobs in India are also booming with increasing demand for information technology professionals.

 

 

 

There are few aspects of business today that are still untouched by IT professionals. These have immense implications for them. No longer tucked away in basement, IT professional operates in the heart of the business. With this changing role comes an increasing need for such professionals who communicate and demonstrate high standards of professional competence and achievement with a perfect essence of professionalism.

 

 

To be an Information Technology Professional, an individual should be a graduate with Bachelor of Engineers Degree. There are many institutes and universities in India that offer courses on Information Technology to name a few:

 

 

? IIT, Kanpur, Delhi, Chennai, Kharagpur, Mumbai

? IIIT – Indian Institute of Information Technology, Hyderabad

? Alagappa University, Tamil Nadu

? Assam Engineering College, Assam

? Bangalore institute of Technology

? Bengal Engineering College, West Bengal

? Birla Institute of Technology, Ranchi, Bihar

? BMS Institute of Engineering, Bangalore

? Jadavpur University, Kolkata

? University Computer Center, Osmania University, Hyderabad

 

 

 

 

 

 

 

The Job Industry is one of the largest and most competitive Industries in the world today. With the growth and expansion of society as a whole, manpower requirement are sky rocketing.

 

 

A Consultant or a Recruitment Firm is an entity that works towards reducing clutter and streamlining the manpower requirements of Companies, big and small. These firms serve as middlemen and help organizations and job seekers to find each other.

 

 

Companies hire Placement Consultants who in turn help them to find the right candidate to join their organization. Job Seekers contact Recruitment firms to help them identify and then apply for the right job.

Today, the Recruitment Industry has grown to tremendous levels and there are specialized consultants serving different fields.

 

 

Consultants work for a number of different Companies, small and large.

These head hunter groups receive details about the job vacancy such as job responsibilities, desired experience, remuneration etc.

Next, Consultants go through their present database of job seekers registered with them. This database of aspiring candidates is a Placement Consultant’s resource built over a period of time.

Job seekers contact recruitment firms either through phone, email or walk-ins and register their Resumes with them.

 

 

In India, job seekers rely highly on Placement Consultants and recruitment firms in their quest for a suitable job.

 

The Job Hunting Cycle –

Identifying a Placement Firm – The biggest challenge for most job seekers is to identify good Placement Consultants, list of Placement Agencies, Employer Websites, in India & International - a valuable resource for all job seekers. 

 

Contacting them – Once a list of Consultants is drawn out, the next step is to contact them. Candidates can email their latest updated resumes or talk to them personally and explain their requirements. Candidates should remember that this is an ongoing process and should be done properly. Remember: mail boxes of Consultants often go beyond their storage limits so remember to follow up with them through phone.

                                                                                                                                    

 

 

 

 

 

 

– Structure, Focus, Identity and Prepare

 

In the planning stage, Global Hunt (GH), evaluates the needs and requirements of the clients to determine required set of skills, understand organizational behavior and relationships. Working as team with our client, we identify the required experience and other characteristics, necessary for the successful candidate.

 

The initial planning enable them in identifying needs of both the company as valid candidates, which further leads us in deciding on a search strategy to target on spot education, personality  and experience.

 

 

During the mapping exercise we perform industry specific desk and field, requirement of companies and relevant people so as to identify the key competencies. It include principal accountabilities, key result areas (KRAs) authority to be infested, external contacts, reporting procedures and supervisory relationships, working conditions / employee job specifications, compensation package, location and other necessary details.

 

 

The field research provides us a long list of qualified candidates, who are worth pursuing the process; we start the search to identify the suitable candidates either from our own database or by advertising for the position.

 

- Preliminary Interviews short listing of candidates, Informal Reference checks, and client interviews and formal reference checks.

 

 

We select the potential candidates on the basis of experience, qualifications, strength and weaknesses and the ability of the candidate to the work-culture and ethics of the client organization.

 

 

 

 

 

The preliminary interviews result out in short-listing of highly qualified candidates. Once the reports are generally prepared and submitted in writing to our clients on four or five who fulfill the specified position closely.

 

 

We conduct informal reference check to verify the listed achievements and last experiences of the short-listed candidates. After this phase, a list is handed to the clients’ recommendations and assessments.

 

 

After the informal reference checks, we schedule a meeting between the short-listed candidate and the client with proper travel arrangements and handling of reimbursement of travel. The consultant asks both the client and the candidates for the feedback after every interview.

 

 

After client interviews, we conduct a formal reference check of the selected candidates contacts individuals  / companies that are capable of providing details of the qualifications, work ethics and other relevant feedback. The comments made by these are then reviewed with the client.

 

- Negotiations & offer, Follow-up / progress and handholding

 

 

The Global hunt actively participates in the negotiation process including compensation. Both the client candidates draw on our in-depth knowledge of market compensation and benefits in discuss and plan a competitive and equitable package.

 

 

Understanding the importance of follow up / progress phase, we keep in touch until the time he /she joins the company.

 

 

After the successful candidate joining for a specified job, we keep an ongoing dialogue the candidate and the client. This handholding process ensures a smooth integration of organization and accomplishment of targets and performance goals.

 

 

 

The Rs.1, 600 crore job search market in India is dominated by consultants who have about 65 per cent market share. A majority of them are small players who use job portals for recruiting candidates.

 

 

 

 

 

Traditionally, the role of the Human Resource professional in many organizations has been to serve as the systematizing, policing arm of executive management.

In this role, the HR professional served executive agendas well, but was frequently viewed as a road block by much of the rest of the organization. While some need for this role occasionally remains — you wouldn’t want every manager putting his own spin on a sexual harassment policy, as an example — much of the HR role is transforming itself.

The role of the HR manager must parallel the needs of his changing organization. Successful organizations are becoming more adaptable, resilient, quick to change direction and customer-centered. Within this environment, the HR professional, who is considered necessary by line managers, is a strategic partner, an employee sponsor or advocate and a change mentor.

In today’s organizations, to guarantee their viability and ability to contribute, HR managers need to think of themselves as strategic partners. In this role, the HR person contributes to the development of and the accomplishment of the organization-wide business plan and objectives.

The HR business objectives are established to support the attainment of the overall strategic business plan and objectives. The tactical HR representative is deeply knowledgeable about the design of work systems in which people succeed and contribute. This strategic partnership impacts HR services such as the design of work positions; hiring; reward, recognition and strategic pay; performance development and appraisal systems; career and succession planning; and employee development.

As an employee sponsor or advocate, the HR manager plays an integral role in organizational success via his knowledge about and advocacy of people. This advocacy includes expertise in how to create a work environment in which people will choose to be motivated, contributing, and happy.

 

Fostering effective methods of goal setting, communication and empowerment through responsibility, builds employee ownership of the organization. The HR professional helps establish the organizational culture and climate in which people have the competency, concern and commitment to serve customers well.

 

In this role, the HR manager provides employee development opportunities, employee assistance programs, gain sharing and profit-sharing strategies, organization development interventions, due process approaches to problem solving and regularly scheduled communication opportunities.

The constant evaluation of the effectiveness of the organization results in the need for the HR professional to frequently champion change. Both knowledge about and the ability to execute successful change strategies make the HR professional exceptionally valued. Knowing how to link change to the strategic needs of the organization will minimize employee dissatisfaction and resistance to change.

 

The HR professional contributes to the organization by constantly assessing the effectiveness of the HR function. He also sponsors change in other departments and in work practices. To promote the overall success of his organization, he champions the identification of the organizational mission, vision, values, goals and action plans. Finally, he helps determine the measures that will tell his organization how well it is succeeding in all of this.

 

 

 

 

The Consultants play a vital role in staffing of clientele needs and provides employment for local people, however getting the right prospective candidate for employment still remains a challenge because of changing manpower requirements of the clients based on the project assignments they carry out and moreover the consultant should be acting as gap filler and also to care about the changing needs of preferences of candidates who look to be placed under better employer.

 

However, the consultants should provide advices for the employer for practicing finest human resources policies so that they can afford to retain the employees by providing lucrative benefits so that the dearth of quality professional can be reduced. It is up to employer consultant to vigil on the competition in the industry to match the requirements arising out of competition.

 

It is also important for the employer to prepare the right job description and forward the same to consultant, who can bring the right candidate for right job.

 

The consultant should not restrict themselves to staffing and should ease the difficulties faced by both prospective employees and employer. The consultant should be a good stragiest who can leverage the skills of prospective employee in placing them in right organization.

 

For the consultants the era has begined to create the new talent pool who can take the organizations to the reach its goal and inturn the consultants should cultivate to have immaculate systems and process of creating jobs in the market and finally to reduce the failure in the process of staffing.

 

 

 

 

 

 

 

 

 

Reference1 – Recruitment and Selection, by Garry Dessler, Human Resource Development.

 

Reference2 – Training and development, by Ashwatappa, Human Resource Development.

 

Reference3 –Consultancies in India by Amity India refer website amity.edu.

 

Reference4 – All the tables are in the article are sourced from D&B Researchers.

 

Refernce5 – Recruitment process sourced from Globalhunt, leading HR consultant.

 

Reference6 –The other sources of data extraction from websites: jobsites.net, fresherjob.com, human resources.about.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                               

 

 

 

 

 

 

 

Information Management System

 

 

A management information system (MIS) is a system or process which provides information needed to manage organizations effectively. Management information systems are regarded to be a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures by management accountants to solve business problems such as costing a product, service or a business-wide strategy. Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.

 

At the start, in businesses and other organizations, internal reporting was made manually and only periodically, as a by-product of the accounting system and with some additional statistics, and gave limited and delayed information on management performance. Previously, data had to be separated individually by the people as per the requirement and necessity of the organization. Later, data was distinguished from information, and instead of the collection of mass of data, important, and to the point data that is needed by the organization was stored.

 

Early on, business computers were mostly used for relatively simple operations such as tracking sales or payroll data, often without much detail. Over time these applications became more complex and began to store increasing amounts of information while also interlinking with previously separate information systems. As more and more data was stored and linked man began to analyze this information into further detail, creating entire management reports from the raw, stored data. The term “MIS” arose to describe these kinds of applications, which were developed to provide managers with information about sales, inventories, and other data that would help in managing the enterprise. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications,  ERP,  SCM, CRM, project management and database retrieval application.

 

An ‘MIS’ is a planned system of the collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management. In a way it is a documented report of the activities that were planned and executed.

 

According to Philip Kotler ”A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.”

 

The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making. The area of study called MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science.  IT service management is a practitioner-focused discipline. MIS has also some differences with Enterprise Resource Planning (ERP) as ERP incorporates elements that are not necessarily focused on decision support.

 

Professor Allen S. Lee states that ”…research in the information systems field examines more than the technological system, or just the social system, or even the two side by side; in addition, it investigates the phenomena that emerge when the two interact”.

Managers play a key role in any organization. They are responsible for taking decisions appropriate to the need of the market. Information systems have become the main tool used by managers in decision making. Managers perceive information as the driving force to achieve success in any business. Hence there is a need for MIS as:

 

Support of its business process and operations
Support of decision making by its employees and managers
Support of its strategies for competitive advantage-Gaining a strategic advantage

The major roles of the business applications of a Management Information System may be represented in the pyramid form as below:

Support Strategies for Competitive Advantage
Support Business Decision Making
Support Business Process and Operations

MIS is mainly designed to take care of the needs of the managers in the organization.
MIS aids in integrating the information generated by various departments of the organization.
MIS helps in identifying a proper mechanism of storage of data.
MIS also helps in establishing mechanism to eliminate redundancies in data.
MIS as a system can be broken down into sub systems.

The role and significance of MIS in business and its classification is explained. It is possible to understand the various phases of development in MIS based on the type of system required in any organization.

 

Strategic Management Information System categories

Strategic Information System

A Strategic Information System (SIS) is a system to manage information and assist in strategic decision making. A strategic information system has been defined as, “The information system to support or change enterprise’s strategy.”A SIS is a type of Information System that is aligned with business strategy and structure. The alignment increases the capability to respond faster to environmental changes and thus creates a competitive advantage. An early example was the favorable position afforded American and United Airlines by their reservation systems, Sabre and Apollo. For many years these two systems ensured that the two carriers’ flights appeared on the first screens observed by travel agents, thus increasing their bookings relative to competitors. A major source of controversy surrounding SIS is their sustainability. SISs are different from other comparable systems as:

 

1) they change the way the firm competes.

2) they have an external (outward looking) focus.

3) they are associated with higher project risk.

4) they are innovative (and not easily copied).

 

It is mainly concerned with providing and organization and its members an assistance to perform the routine tasks efficiently and effectively. One of the major issue before any organization is the challenge of meeting its goals and objectives. Strategic IS enable such organization in realizing their goals. Strategic Information System (SIS) is a support to the existing system and helps in achieving a competitive advantage over the organizations competitors in terms of its objectives. This unit deals with the critical aspects of the strategic information system. This units indicates the theoretical concepts and the way in which the same are realized in practice. The flow of the unit is in such a way that it starts with the development of contemporary theory about strategic uses of corporations’ internal information systems leading to systems which transcend the boundaries of particular organizations. The process whereby strategic information systems are created or identified is then examined. A number of weaknesses in the existing body of theory are identified, and suggestions made as to directions in which knowledge is or may be progressing. A strategic information system is concerned with systems which contribute significantly to the achievement of an organization’s overall objectives. The body of knowledge is of recent origin and highly dynamic, and the area has an aura of excitement about it. The emergence of the key ideas, the process whereby strategic information systems come into being is assessed, areas of weakness are identified, and directions of current and future development suggested.

 

Information system is regarded as a tool to provide various services to different management functions. The tools have been developing year by year and the application of the tool has become more and more diverse. In management it is now a very power means to manage and control various activities and decision making process. The original idea of automating mechanical processes got quickly succeeded by the rationalization and integration of systems. In both of these forms, IS was regarded primarily as an operational support tool, and secondarily as a service to management. Subsequent to the development, it was during the last few years that an additional potential was discovered. It was found that, in some cases, information technology (IT) had been critical to the implementation of an organization’s strategy.

 

An organization’s strategy supported by information system fulfilling its business objectives came to be known as Strategic Information System. The strategic information system consists of functions that involved gathering, maintenance and analysis of data concerning internal resources, and intelligence about competitors, suppliers, customers, government and other relevant organizations.

 

Many organizations have purchased computers for data processing and for meeting the statutory requirements of filling the returns and reports to the government. Computers are used mainly for computing and accounting the business transactions and have not been considered as tool for information processing.

The organizations have invested on computers and expanded its use by adding more or bigger computers to take care of the numerous transactions in the business. In this approach, the information processing function of the computers in the organization never got its due regard as an important asset to the organization. In fact, this function is misinterpreted as data processing for expeditious generation of reports and returns, and not as information processing for management action and decisions.

However, the scene has been changing since late eighties when the computers become more versatile, in the function of storage, communication, intelligence and language. The computer technology is so advanced that the barriers of storage, distance understanding of language and speed are broken.

In short, we need a management information system flexible enough to deal with the changing information needs of the organization. It should be conceived as an open system continuously interacting with the business environment with a built-in mechanism to provide the desired information as per the new requirements of the management. The designing as such in open system is a complex task. It can be achieved only if the MIS is planned, keeping in view, the plan of the business management of the organization.

Once the plan of MIS is made, the development of the MIS calls for determining for the strategy of development. As discussed earlier, the plan consists of various systems and sub systems. The development strategy determines where to begin and what sequence the development can take place with the sole objective of assuring the information support.

The choice of the system or the sub-system depends on its position in the total MIS plan, the size of the system, the user understands of the systems and the complexity and its interface with other systems. The designer first develops systems independently and starts integrating them with other systems, enlarging the system scope and meeting the varying information needs.

Determining the position of the position of the system in the MIS is easy. The real problem is the degree of structure, and formalization in the system and procedures which determine the timing and duration of development of the system.

 

The business application system demands designing of systems suitable to the application in project.

The major steps involved in the design are the following:

Input design is defined as the input requirement specification as per a format required. Input design begins long before the data arrives at the device. The analyst will have to design source documents, input screens and methods and procedures for getting the data into the computer.

– The design of the output is based on the requirement of the user – manager, customer etc. The output formats have to very friendly to the user. Therefore the designer has to ensure the appropriateness of the output format.

– When the design and its methodology is approved, the system is developed using appropriate business models. The development has to be in accordance to a given standard. The norms have to be strictly adhered to.

Exhaustive and thorough testing must be conducted to ascertain whether the system produces the right results. Testing is time consuming: Test data must be carefully prepared, results reviewed and corrections made in the system. In some instances, parts of the system may have to be redesigned. Testing an information system can be broken down into three types of activities: unit testing, system testing and acceptance testing. Unit testing or program testing consists of testing each program separately in the system. The purpose of such testing is to guarantee that programs are error free, but this goal is realistically impossible. Instead, testing should be viewed as a means of locating errors in programs, focusing on finding all ways to make a program fail. Once pinpointed, problems can be corrected. System testing tests the functioning of the information system as a whole. It tries to determine if discrete modules will function together as planned and whether discrepancies exist between the way the system actually works and the way it was conceived. Among the areas examined are performance time, capacity for file storage and handling peak loads, recovery and restart capabilities and manual procedures. Acceptance testing provides the final certification that the system is ready to be used in a production setting. Systems tests are evaluated by users and reviewed by management. When all parties are satisfied that the new system meets their standards, the system is formally accepted for installation.

Conversion – Conversion is the process of changing from the old system to the new system. Four main conversion strategies can be employed. They are the parallel strategy, the direct cutover strategy, the pilot strategy and the phased strategy.

 

In a parallel strategy both the old system and its potential replacement are run together for a time until everyone is assure that the new one functions correctly. This is the safest conversion approach because, in the event of errors or processing disruptions, the old system can still be used as a backup. But, this approach is very expensive, and additional staff or resources may be required to run the extra system.

 

The direct cutover strategy replaces the old system entirely with the new system on an appointed day. At first glance, this strategy seems less costly than the parallel conversion strategy. But, it is a very risky approach that can potentially be more costly than parallel activities if serious problems with the new system are found. There is no other system to fall back on. Dislocations, disruptions and the cost of corrections are enormous.

 

The pilot study strategy introduces the new system to only a limited area of the organization, such as a single department or operating unit. When this version is complete and working smoothly, it is installed throughout the rest of the organization, either simultaneously or in stages.

 

The phased approach strategy introduces the new system in stages, either by functions or by organizational units. If, for example, the system is introduced by functions, a new payroll system might begin with hourly workers who are paid weekly, followed six months later by adding salaried employees( who are paid monthly) to the system. If the system is introduced by organizational units, corporate headquarters might be converted first, followed by outlying operating units four months later.

 

Moving from an old system to a new system requires that end users be trained to use the new system. Detailed documentation showing how the system works from both a technical and enduser standpoint is finalized during conversion time for use in training and everyday operations. Lack of proper training and documentation contributes to system failure, so this portion of the systems development process is very important.

After the new system is installed and conversion is complete, the system is said to be in production. During this stage the system will be reviewed by both users and technical specialists to determine how well it has met its original objectives and to decide whether any revisions or modifications are in order. In some instances, a formal post implementation audit document will be prepared. After the system has been finetuned, it will need to be maintained while it is in production to correct errors, meet requirements or improve processing efficiency.

 

Once a system is fully implemented and is being used in business operations, the maintenance function begins. Systems maintenance is the monitoring, or necessary improvements. For example, the implementation of a new system usually results in the phenomenon known as the learning curve. Personnel who operate and use the system will make mistake simply because they are familiar withit. Though such errors usually diminish as experience is gained with a new system, they do point out areas where a system may be improved.

 

Maintenance is also necessary for other failures and problems that arise during the operation of a system. Endusers and information systems personnel then perform a troubleshooting function to determine the causes of and solutions to such problems.

 

Maintenance also includes making modifications to an established system due to changes in the business organizations, and new e-business and ecommerce initiatives may require major changes to current business systems.

 

Due to Internet capabilities and web technology, traditional business organization definition has undergone a change where scope of the enterprise now includes other company locations, business partners, customers and vendors. It has no geographic boundaries as it can extend its operations where Internet works. All this is possible due to Internet and web moving traditional paper driven organization to information driven Internet enabled        E-business enterprise. E-business enterprise is open twenty-four hours, and being independent, managers, vendors, customers transact business any time from anywhere. Internet capabilities have given E-business enterprise a cutting edge capability advantage to increase the business value. It has opened new channels of business as buying and selling can be done on Internet. It enables to reach new markets across the world anywhere due to communication capabilities. It has empowered customers and vendors / suppliers through secured access to information to act, wherever necessary. The cost of business operations has come down significantly due to the elimination of paper-driven processes, faster communication and effective collaborative working. The effect of these radical changes is the reduction in administrative and management overheads, reduction in inventory, faster delivery of goods and services to the customers.

E-business enterprise traditional people organization based on principle is absent. It is replaced by people organization that is empowered byinformation and knowledge to perform their role. They are supported by informationsystems, application packages, and decision-support systems. It is no longerfunctional, product, and project or matrix organization of people but E-organization where people work in network environment as a team or work group in virtual mode. Ebusiness enterprise is more process-driven, Technology-enabled and uses its own information and knowledge to perform. It is lean in number, flat in structure, broad in scope and a learning organization. In E-business enterprise, most of the things are electronic, use digital technologies and work on databases, knowledge bases, directories and document repositories. The business processes are conducted through enterprise software like ERP, SCM, and CRM supported by data warehouse, decision support, and knowledge management systems. Today most of the business organizations are using Internet technology, network, and wireless technology for improving the business performance measured in terms of cost, efficiency, competitiveness and profitability. They are using E-business, Ecommerce solutions to reach faraway locations to deliver product and services. The enterprise solutions like ERP, SCM, and CRM run on Internet (Internet / Extranet) & (WAN). The business processes across the organization and outside run on Etechnology platform using digital technology. Hence today’s business firm is also called E-enterprise or Digital firm.

 

The paradigm shift to E-enterprise has brought four transformations, namely:

 

Domestic business to global business.

Industrial manufacturing economy to knowledge-based service economy.

Enterprise Resource Management to Enterprise Network Management.

Manual document driven business process to paperless, automated, electronically transacted business process.

These transformations have made conventional organization design obsolete.

 

In E-enterprise, business is conducted electronically. Buyers and sellers through Internet drive the market and Internet-based web systems. Buying and selling is possible on Internet. Books, CDs, computer, white goods and many such goods are bought and sold on Internet. The new channel of business is well-known as Ecommerce. On the same lines, banking, insurance, healthcare are being managed through Internet E-banking, E-billing, E-audit, & use of Credit cards, Smart card, ATM, E-money are the examples of the Ecommerce application. The digital firm, which uses Internet and web technology and uses E-business and Ecommerce solutions, is a reality and is going to increase in number.

 

MIS for E-business is different compared to conventional MIS design of an organization.

 

The role of MIS in E-business organization is to deal with changes in global market and enterprises. MIS produces more knowledge-based products. Knowledge management system is formally recognized as a part of MIS. It is effectively used for strategic planning for survival and growth, increase in profit and productivity and so on. To achieve the said benefits of E-business organization, it is necessary to redesign the organization to realize the benefits of digital firm. The organization structure should be lean and flat. Get rid of rigid established infrastructure such as branch office or zonal office. Allow people to work from anywhere. Automate processes after reengineering the process to cut down process cycle time. Make use of groupware technology on Internet platform for faster response processing. Another challenge is to convert domestic process design to work for international process, where integration of multinational information systems using different communication standards, country-specific accounting practices, and laws of security are to be adhered strictly.

 

Internet and networking technology has thrown another challenge to enlarge the scope of organization where customers and vendors become part of the organization. This technology offers a solution to communicate, coordinate, and collaborate with customers, vendors and business partners. This is just not a technical change in business operations but a cultural change in the mindset of managers and workers to look beyond the conventional organization. It means changing the organization behaviour to take competitive advantage of the E-business technology.

 

The last but not the least important is the challenge to organize and implement information architecture and information technology platforms, considering multiple locations and multiple information needs arising due to global operations of the business into a comprehensive MIS.

is a second big application next to ERP. It is essential deals with buying and selling of goods. With the advent of intent and web technology, E-Commerce today covers an entire commercial scope online including design and developing, marketing, selling, delivering, servicing, and paying for goods. Some E-Commerce application add order tracking as a feature for customer to know the delivery status of the order.

 

The entire model successfully works on web platform and uses internet technology.

 

Ecommerce process has two participants, namely Buyer and Seller, like in traditional business model. And unique and typical to E-commerce there is one more participant to seller by authorization and authentication of commercial transaction.

 

E-Commerce process model can be viewed in four ways and categories:

 

 

In business organization uses websites or portals to offer information about product, through multimedia clippings, catalogues, product configuration guidelines, customer histories and so on. A new customer interacts with the site and uses interactive order processing system for order placements. On placements of order, secured payment systems comes into operation to authorize and authenticate payment to seller. The delivery system then take over to execute the delivery to customer.

 

In buyer and seller are business organizations. They exchange technical & commercial through websites and portals. Then model works on similar line like B2C. More advanced B2B model uses Extranet and Conducts business transaction based on the information status displayed on the buyer’s application server.

 

In customer initiates actions after logging on to seller’s website or to server. On the server of the selling organization, E-Commerce application are present for the use of the customer. The entire Internet banking process work on C2B model where account holders of the bank transact a number of requirements such as seeking account balance, payment and so on.

 

In Customer Participates in the process of selling and buying through the auction website. In this model, website is used for personal advertising of products or services. ENewspaper website is an Example of advertising and selling of goods to customer.

 

In the participants in E-business are two organisation with relations as buyer=seller, distributor-dealer and so on.

every business has a number of work scenarios where group of people work together to complete the tasks and to achieve a common objective. The group could be teams or virtual teams with different member strength. They come together to platform a task to achieve some results. The process is called Collaboration. The Biggest

 

Advantage of

It taps the collective wisdom, knowledge and experience of the members. The collaboration team or group could be within the organization and between the organization as well.

 

Since, E-Collaboration works on an internet platform and uses web technology, work group/team need not be at one physical location.

 

E-collaboration uses E-Communication capabilities to perform collaborative tasks or project assignment. Its effectiveness is increased by software ‘GroupWare’ that enables the members of the group to share information, invoke an application and work together to create documents and share them and so on.

 

E-Collaboration helps work effectively on applications like calendaring and scheduling tasks, event, project management, workflow application, work group application.

 

E-collaboration system components are internet, Intranet, Extranet and LAN, WAN networks for communication through GroupWare tools, browser.

 

Let us illustrate the model using an event in the business such as receipt of material for a job to be processed on the shop floor. In this event there is a transaction receipt of material, which needs to be processed, and then a workgroup will use this information of material receipt. Each member of this workgroup has a different goal.

 

is a global network of interconnected computers, enabling users to share information along multiple channels. Typically, a computer that connects to the Internet can access information from a vast array of available servers and other computers by moving information from them to the computer’s local memory. The same connection allows that computer to send information to servers on the network; that information is in turn accessed and potentially modified by a variety of other interconnected computers. A majority of widely accessible information on the Internet consists of inter-linked hypertext documents and other resources of the World Wide Web (WWW). Computer users typically manage sent and received information with web browsers; other software for users’ interface with computer networks includes specialized programs for electronic mail, online chat, file transfer and file sharing.

 

The movement of information in the Internet is achieved via a system of interconnected computer networks that share data by packet switching using the standardized Internet Protocol Suite (TCP/IP). It is a “network of networks” that consists of millions of private and public, academic, business, and government networks of local to global scope that are linked by copper wires, fiber-optic cables, wireless connections, and other technologies.

 

An extranet is a private network that uses the Internet protocols and the public telecommunication system to securely share part of a business’s information or operations with suppliers, vendors, partners, customers, or other businesses. An extranet can be viewed as part of a company’s intranet that is extended to users outside the company. An extranet requires security and privacy.

 

A new buzzword that refers to an intranet that is partially accessible to authorized outsiders.  Whereas an intranet resides behind a firewall and is accessible only to people who are members of the same company or organization, an extranet provides various levels of accessibility to outsiders. You can access an extranet only if you have a valid username and password, and your identity determines which parts of the extranet you can view. An extranet is somewhat very similar to an intranet. Extranets are designed specifically to give external, limited access to certain files of your computer systems to:

Certain large or privileged customers.
Selected industry partners.
Suppliers and subcontractors… etc.

Therefore, a carefully designed extranet can bring additional business to your company.

 

Intranets and extranets all have three things in common:

 

They both use secured Internet access to the outside world.
Both can drastically save your company or organization a lot of money.
Both need a user ID & password to control access to the whole system.

 

The professional development team at My Web Services has the expertise and the right tools to design the right intranet or extranet that will meet your exact needs, both for today and the future.

An internal use, private network inside an organisation that uses the same kind of software which would also be found on the Internet. Inter-connected network within one organization that uses Web technologies for the sharing of information internally, not world wide. Such information might include organization policies and procedures, announcements, or information about new products.

 

An intranet is a restricted-access network that works like the Web, but isn’t on it. Usually owned and managed by a company, an intranet enables a company to share its resources with its employees without confidential information being made available to everyone with Internet access.

 

A network based on TCP/IP protocols (an internet) belonging to an organization, usually a corporation, accessible only by the organization’s members, employees, or others with authorization. An intranet’s Web sites look and act just like any other Web sites, but the firewall surrounding an intranet fends off unauthorized access. Like the Internet itself, intranets are used to share information.

 

An intranet is an information portal designed specifically for the internal communications of small, medium or large businesses, enterprises, governments, industries or financial institutions of any size or complexity. Intranets can be custom-designed to fit the exact needs of businesses no matter where they are situated.

 

Users of intranets consists mainly of:

 

Members of the executive team.
Accounting and order billing.
Managers and directors.
Sales people and support staff.
Customer service, help desk, etc..

An electronic network of computers that includes nearly every university, government, and research facility in the world. Also included are many commercial sites. It started with four interconnected computers in 1969 and was known as ARPAnet. A network of computer networks which operates world-wide using a common set of communications protocols. The vast collection of inter-connected networks across the world that all use the TCP/IP protocols.

 

A global network connecting millions of computers. A worldwide network of computer networks. It is an interconnection of large and small networks around the globe. The Internet began in 1962 as a resilient computer network for the US military and over time has grown into a global communication tool of more than 12,000 computer networks that share a common addressing scheme.

 

Early on, business computers were mostly used for relatively simple operations such as tracking sales or payroll data, often without much detail. Over time these applications became more complex and began to store increasing amounts of information while also interlinking with previously separate iformation systems. As more and more data was stored and linked man began to analyze this information into further detail, creating entire management reports from the raw, stored data. The term “MIS” arose to describe these kinds of applications, which were developed to provide managers with information about sales, inventories, and other data that would help in managing the enterprise. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications,  ERP,  SCM, CRM, project management and database retrieval application.

 

An ‘MIS’ is a planned system of the collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management. In a way it is a documented report of the activities that were planned and executed.

 

According to Philip Kotler ”A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.”

 

The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making. The area of study called MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science.  IT service management is a practitioner-focused discipline. MIS has also some differences with Enterprise Resource Planning (ERP) as ERP incorporates elements that are not necessarily focused on decision support.

 

Professor Allen S. Lee states that ”…research in the information systems field examines more than the technological system, or just the social system, or even the two side by side; in addition, it investigates the phenomena that emerge when the two interact”.

Managers play a key role in any organization. They are responsible for taking decisions appropriate to the need of the market. Information systems have become the main tool used by managers in decision making. Managers perceive information as the driving force to achieve success in any business. Hence there is a need for MIS as:

 

Support of its business process and operations
Support of decision making by its employees and managers
Support of its strategies for competitive advantage-Gaining a strategic advantage

The major roles of the business applications of a Management Information System may be represented in the pyramid form as below:

Support Strategies for Competitive Advantage
Support Business Decision Making
Support Business Process and Operations

MIS is mainly designed to take care of the needs of the managers in the organization.
MIS aids in integrating the information generated by various departments of the organization.
MIS helps in identifying a proper mechanism of storage of data.
MIS also helps in establishing mechanism to eliminate redundancies in data.
MIS as a system can be broken down into sub systems.

The role and significance of MIS in business and its classification is explained. It is possible to understand the various phases of development in MIS based on the type of system required in any organization.

 

Strategic Management Information System categories

Strategic Information System

A Strategic Information System (SIS) is a system to manage information and assist in strategic decision making. A strategic information system has been defined as, “The information system to support or change enterprise’s strategy.”A SIS is a type of Information System that is aligned with business strategy and structure. The alignment increases the capability to respond faster to environmental changes and thus creates a competitive advantage. An early example was the favorable position afforded American and United Airlines by their reservation systems, Sabre and Apollo. For many years these two systems ensured that the two carriers’ flights appeared on the first screens observed by travel agents, thus increasing their bookings relative to competitors. A major source of controversy surrounding SIS is their sustainability. SISs are different from other comparable systems as:

 

1) they change the way the firm competes.

2) they have an external (outward looking) focus.

3) they are associated with higher project risk.

4) they are innovative (and not easily copied).

 

It is mainly concerned with providing and organization and its members an assistance to perform the routine tasks efficiently and effectively. One of the major issue before any organization is the challenge of meeting its goals and objectives. Strategic IS enable such organization in realizing their goals. Strategic Information System (SIS) is a support to the existing system and helps in achieving a competitive advantage over the organizations competitors in terms of its objectives. This unit deals with the critical aspects of the strategic information system. This units indicates the theoretical concepts and the way in which the same are realized in practice. The flow of the unit is in such a way that it starts with the development of contemporary theory about strategic uses of corporations’ internal information systems leading to systems which transcend the boundaries of particular organizations. The process whereby strategic information systems are created or identified is then examined. A number of weaknesses in the existing body of theory are identified, and suggestions made as to directions in which knowledge is or may be progressing. A strategic information system is concerned with systems which contribute significantly to the achievement of an organization’s overall objectives. The body of knowledge is of recent origin and highly dynamic, and the area has an aura of excitement about it. The emergence of the key ideas, the process whereby strategic information systems come into being is assessed, areas of weakness are identified, and directions of current and future development suggested.

 

Information system is regarded as a tool to provide various services to different management functions. The tools have been developing year by year and the application of the tool has become more and more diverse. In management it is now a very power means to manage and control various activities and decision making process. The original idea of automating mechanical processes got quickly succeeded by the rationalization and integration of systems. In both of these forms, IS was regarded primarily as an operational support tool, and secondarily as a service to management. Subsequent to the development, it was during the last few years that an additional potential was discovered. It was found that, in some cases, information technology (IT) had been critical to the implementation of an organization’s strategy.

 

An organization’s strategy supported by information system fulfilling its business objectives came to be known as Strategic Information System. The strategic information system consists of functions that involved gathering, maintenance and analysis of data concerning internal resources, and intelligence about competitors, suppliers, customers, government and other relevant organizations.

 

Many organizations have purchased computers for data processing and for meeting the statutory requirements of filling the returns and reports to the government. Computers are used mainly for computing and accounting the business transactions and have not been considered as tool for information processing.

The organizations have invested on computers and expanded its use by adding more or bigger computers to take care of the numerous transactions in the business. In this approach, the information processing function of the computers in the organization never got its due regard as an important asset to the organization. In fact, this function is misinterpreted as data processing for expeditious generation of reports and returns, and not as information processing for management action and decisions.

However, the scene has been changing since late eighties when the computers become more versatile, in the function of storage, communication, intelligence and language. The computer technology is so advanced that the barriers of storage, distance understanding of language and speed are broken.

In short, we need a management information system flexible enough to deal with the changing information needs of the organization. It should be conceived as an open system continuously interacting with the business environment with a built-in mechanism to provide the desired information as per the new requirements of the management. The designing as such in open system is a complex task. It can be achieved only if the MIS is planned, keeping in view, the plan of the business management of the organization.

Once the plan of MIS is made, the development of the MIS calls for determining for the strategy of development. As discussed earlier, the plan consists of various systems and sub systems. The development strategy determines where to begin and what sequence the development can take place with the sole objective of assuring the information support.

The choice of the system or the sub-system depends on its position in the total MIS plan, the size of the system, the user understands of the systems and the complexity and its interface with other systems. The designer first develops systems independently and starts integrating them with other systems, enlarging the system scope and meeting the varying information needs.

Determining the position of the position of the system in the MIS is easy. The real problem is the degree of structure, and formalization in the system and procedures which determine the timing and duration of development of the system.

 

The business application system demands designing of systems suitable to the application in project.

The major steps involved in the design are the following:

Input design is defined as the input requirement specification as per a format required. Input design begins long before the data arrives at the device. The analyst will have to design source documents, input screens and methods and procedures for getting the data into the computer.

– The design of the output is based on the requirement of the user – manager, customer etc. The output formats have to very friendly to the user. Therefore the designer has to ensure the appropriateness of the output format.

– When the design and its methodology is approved, the system is developed using appropriate business models. The development has to be in accordance to a given standard. The norms have to be strictly adhered to.

Exhaustive and thorough testing must be conducted to ascertain whether the system produces the right results. Testing is time consuming: Test data must be carefully prepared, results reviewed and corrections made in the system. In some instances, parts of the system may have to be redesigned. Testing an information system can be broken down into three types of activities: unit testing, system testing and acceptance testing. Unit testing or program testing consists of testing each program separately in the system. The purpose of such testing is to guarantee that programs are error free, but this goal is realistically impossible. Instead, testing should be viewed as a means of locating errors in programs, focusing on finding all ways to make a program fail. Once pinpointed, problems can be corrected. System testing tests the functioning of the information system as a whole. It tries to determine if discrete modules will function together as planned and whether discrepancies exist between the way the system actually works and the way it was conceived. Among the areas examined are performance time, capacity for file storage and handling peak loads, recovery and restart capabilities and manual procedures. Acceptance testing provides the final certification that the system is ready to be used in a production setting. Systems tests are evaluated by users and reviewed by management. When all parties are satisfied that the new system meets their standards, the system is formally accepted for installation.

Conversion – Conversion is the process of changing from the old system to the new system. Four main conversion strategies can be employed. They are the parallel strategy, the direct cutover strategy, the pilot strategy and the phased strategy.

 

In a parallel strategy both the old system and its potential replacement are run together for a time until everyone is assure that the new one functions correctly. This is the safest conversion approach because, in the event of errors or processing disruptions, the old system can still be used as a backup. But, this approach is very expensive, and additional staff or resources may be required to run the extra system.

 

The direct cutover strategy replaces the old system entirely with the new system on an appointed day. At first glance, this strategy seems less costly than the parallel conversion strategy. But, it is a very risky approach that can potentially be more costly than parallel activities if serious problems with the new system are found. There is no other system to fall back on. Dislocations, disruptions and the cost of corrections are enormous.

 

The pilot study strategy introduces the new system to only a limited area of the organization, such as a single department or operating unit. When this version is complete and working smoothly, it is installed throughout the rest of the organization, either simultaneously or in stages.

 

The phased approach strategy introduces the new system in stages, either by functions or by organizational units. If, for example, the system is introduced by functions, a new payroll system might begin with hourly workers who are paid weekly, followed six months later by adding salaried employees( who are paid monthly) to the system. If the system is introduced by organizational units, corporate headquarters might be converted first, followed by outlying operating units four months later.

 

Moving from an old system to a new system requires that end users be trained to use the new system. Detailed documentation showing how the system works from both a technical and enduser standpoint is finalized during conversion time for use in training and everyday operations. Lack of proper training and documentation contributes to system failure, so this portion of the systems development process is very important.

After the new system is installed and conversion is complete, the system is said to be in production. During this stage the system will be reviewed by both users and technical specialists to determine how well it has met its original objectives and to decide whether any revisions or modifications are in order. In some instances, a formal post implementation audit document will be prepared. After the system has been finetuned, it will need to be maintained while it is in production to correct errors, meet requirements or improve processing efficiency.

 

Once a system is fully implemented and is being used in business operations, the maintenance function begins. Systems maintenance is the monitoring, or necessary improvements. For example, the implementation of a new system usually results in the phenomenon known as the learning curve. Personnel who operate and use the system will make mistake simply because they are familiar withit. Though such errors usually diminish as experience is gained with a new system, they do point out areas where a system may be improved.

 

Maintenance is also necessary for other failures and problems that arise during the operation of a system. Endusers and information systems personnel then perform a troubleshooting function to determine the causes of and solutions to such problems.

 

Maintenance also includes making modifications to an established system due to changes in the business organizations, and new e-business and ecommerce initiatives may require major changes to current business systems.

 

Due to Internet capabilities and web technology, traditional business organization definition has undergone a change where scope of the enterprise now includes other company locations, business partners, customers and vendors. It has no geographic boundaries as it can extend its operations where Internet works. All this is possible due to Internet and web moving traditional paper driven organization to information driven Internet enabled        E-business enterprise. E-business enterprise is open twenty-four hours, and being independent, managers, vendors, customers transact business any time from anywhere. Internet capabilities have given E-business enterprise a cutting edge capability advantage to increase the business value. It has opened new channels of business as buying and selling can be done on Internet. It enables to reach new markets across the world anywhere due to communication capabilities. It has empowered customers and vendors / suppliers through secured access to information to act, wherever necessary. The cost of business operations has come down significantly due to the elimination of paper-driven processes, faster communication and effective collaborative working. The effect of these radical changes is the reduction in administrative and management overheads, reduction in inventory, faster delivery of goods and services to the customers.

E-business enterprise traditional people organization based on principle is absent. It is replaced by people organization that is empowered byinformation and knowledge to perform their role. They are supported by informationsystems, application packages, and decision-support systems. It is no longerfunctional, product, and project or matrix organization of people but E-organization where people work in network environment as a team or work group in virtual mode. Ebusiness enterprise is more process-driven, Technology-enabled and uses its own information and knowledge to perform. It is lean in number, flat in structure, broad in scope and a learning organization. In E-business enterprise, most of the things are electronic, use digital technologies and work on databases, knowledge bases, directories and document repositories. The business processes are conducted through enterprise software like ERP, SCM, and CRM supported by data warehouse, decision support, and knowledge management systems. Today most of the business organizations are using Internet technology, network, and wireless technology for improving the business performance measured in terms of cost, efficiency, competitiveness and profitability. They are using E-business, Ecommerce solutions to reach faraway locations to deliver product and services. The enterprise solutions like ERP, SCM, and CRM run on Internet (Internet / Extranet) & (WAN). The business processes across the organization and outside run on Etechnology platform using digital technology. Hence today’s business firm is also called E-enterprise or Digital firm.

 

The paradigm shift to E-enterprise has brought four transformations, namely:

 

Domestic business to global business.

Industrial manufacturing economy to knowledge-based service economy.

Enterprise Resource Management to Enterprise Network Management.

Manual document driven business process to paperless, automated, electronically transacted business process.

These transformations have made conventional organization design obsolete.

 

In E-enterprise, business is conducted electronically. Buyers and sellers through Internet drive the market and Internet-based web systems. Buying and selling is possible on Internet. Books, CDs, computer, white goods and many such goods are bought and sold on Internet. The new channel of business is well-known as Ecommerce. On the same lines, banking, insurance, healthcare are being managed through Internet E-banking, E-billing, E-audit, & use of Credit cards, Smart card, ATM, E-money are the examples of the Ecommerce application. The digital firm, which uses Internet and web technology and uses E-business and Ecommerce solutions, is a reality and is going to increase in number.

 

MIS for E-business is different compared to conventional MIS design of an organization.

 

The role of MIS in E-business organization is to deal with changes in global market and enterprises. MIS produces more knowledge-based products. Knowledge management system is formally recognized as a part of MIS. It is effectively used for strategic planning for survival and growth, increase in profit and productivity and so on. To achieve the said benefits of E-business organization, it is necessary to redesign the organization to realize the benefits of digital firm. The organization structure should be lean and flat. Get rid of rigid established infrastructure such as branch office or zonal office. Allow people to work from anywhere. Automate processes after reengineering the process to cut down process cycle time. Make use of groupware technology on Internet platform for faster response processing. Another challenge is to convert domestic process design to work for international process, where integration of multinational information systems using different communication standards, country-specific accounting practices, and laws of security are to be adhered strictly.

 

Internet and networking technology has thrown another challenge to enlarge the scope of organization where customers and vendors become part of the organization. This technology offers a solution to communicate, coordinate, and collaborate with customers, vendors and business partners. This is just not a technical change in business operations but a cultural change in the mindset of managers and workers to look beyond the conventional organization. It means changing the organization behaviour to take competitive advantage of the E-business technology.

 

The last but not the least important is the challenge to organize and implement information architecture and information technology platforms, considering multiple locations and multiple information needs arising due to global operations of the business into a comprehensive MIS.

is a second big application next to ERP. It is essential deals with buying and selling of goods. With the advent of intent and web technology, E-Commerce today covers an entire commercial scope online including design and developing, marketing, selling, delivering, servicing, and paying for goods. Some E-Commerce application add order tracking as a feature for customer to know the delivery status of the order.

 

The entire model successfully works on web platform and uses internet technology.

 

Ecommerce process has two participants, namely Buyer and Seller, like in traditional business model. And unique and typical to E-commerce there is one more participant to seller by authorization and authentication of commercial transaction.

 

E-Commerce process model can be viewed in four ways and categories:

 

 

In business organization uses websites or portals to offer information about product, through multimedia clippings, catalogues, product configuration guidelines, customer histories and so on. A new customer interacts with the site and uses interactive order processing system for order placements. On placements of order, secured payment systems comes into operation to authorize and authenticate payment to seller. The delivery system then take over to execute the delivery to customer.

 

In buyer and seller are business organizations. They exchange technical & commercial through websites and portals. Then model works on similar line like B2C. More advanced B2B model uses Extranet and Conducts business transaction based on the information status displayed on the buyer’s application server.

 

In customer initiates actions after logging on to seller’s website or to server. On the server of the selling organization, E-Commerce application are present for the use of the customer. The entire Internet banking process work on C2B model where account holders of the bank transact a number of requirements such as seeking account balance, payment and so on.

 

In Customer Participates in the process of selling and buying through the auction website. In this model, website is used for personal advertising of products or services. ENewspaper website is an Example of advertising and selling of goods to customer.

 

In the participants in E-business are two organisation with relations as buyer=seller, distributor-dealer and so on.

every business has a number of work scenarios where group of people work together to complete the tasks and to achieve a common objective. The group could be teams or virtual teams with different member strength. They come together to platform a task to achieve some results. The process is called Collaboration. The Biggest

 

Advantage of

It taps the collective wisdom, knowledge and experience of the members. The collaboration team or group could be within the organization and between the organization as well.

 

Since, E-Collaboration works on an internet platform and uses web technology, work group/team need not be at one physical location.

 

E-collaboration uses E-Communication capabilities to perform collaborative tasks or project assignment. Its effectiveness is increased by software ‘GroupWare’ that enables the members of the group to share information, invoke an application and work together to create documents and share them and so on.

 

E-Collaboration helps work effectively on applications like calendaring and scheduling tasks, event, project management, workflow application, work group application.

 

E-collaboration system components are internet, Intranet, Extranet and L&l

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