On Business and MIS

MIS Changes the Face of Business
(Answer to the Final Exam Given by Dr. Ofelia M. Carague for the Subject Management Information System)

Most people nowadays are becoming more and more technology-oriented. We notice that individuals, regardless of age bracket, geographic location, or socio-economic status have had direct experiences (at least) of cellular phones, desktop computers, laptops and Internet. The result of innovating electronic devices, advancing telecommunications, and connecting knowledge, people, software and hardware altogether has dubbed our present times as the “Connected Age”. In business arena, managers are inevitably using sophisticated few tools to run their organization. Their tools are high-end electronic devices loaded with various software to make them more productive and to increase work efficiency. These tools however do not suffice its meaning without connectivity and therefore the Internet becomes the key component in running a business. Staffs as well are becoming well-versed with most hardware, software and telecommunications equipments because technology has actually overrun their environment. Thus, it is without argument that Management Information System (MIS) changes the face of business as it was manifested in the following manners:

1. Transformation of industrial economies
2. Transformation of business enterprise
3. Globalization

Before anyone can understand why MIS has changed the face of business, let us first discuss the basic characteristics of a traditional business. The type of business we used to know is generally huge, centralized, structured organization who typically relied on standard operating procedures to deliver a mass-produced products and services. This traditional business is organized according to a hierarchy of rising authority and responsibility. Based on a pyramid structure, the hierarchy consists of (from the bottom up to the highest position) Strategic, Management, and Operational levels. Strategic level usually consists of business owner or its representatives, or otherwise known as the senior managers or Chief-Executive Officers (CEO) while the management level, which is at the middle layer of the pyramid, employs middle-managers, or heads of every departments/branches, depending on the size of the company. Moreover, the operational level consists of operational managers (or supervisors) and rank-and-file employees such as clerks, service personnel, machine operators and the like who carry out detail-most transactions in business. Each of these levels is further divided into functional areas, such as sales and marketing, manufacturing and production, finance and accounting, and human resources.

Of business in a traditional way, we can figure out certain events and qualities of outcomes that are typically happening in day-to-day processes. Let’s take for example the manufacturing firm and its procurement of materials for production. The manufacturing firm would identify suppliers for all the materials they need for certain span of time. Most likely they would order things in bulk, provide transportation to acquire materials, and store these resources in their own warehouse. Of course, firm’s processes are affected by several circumstances like customer deadlines and quotas, availability of materials, supplier’s costs and location, and availability of transportations, to name a few. Due to instability of these factors however, some firms tend to enlarge their operation facilities by acquiring building to house its raw materials, buying additional vehicles to transport large volumes of purchased items, and even hiring many employees to make the process efficient. Some may also own a farm; grow some trees or livestock in order to have direct access to raw materials. In effect, such company is getting large because they need to have numerous employees, numerous vehicles, large inventory and ample buildings and land to maintain its competitive advantage.

The advent of computers and information systems has changed business outlook on competitive advantage. Competitive advantage means to differentiate your business from your competitors. This can be achieved by having products, services or facilities that are unique from everyone else. Another strategy is to offer products and services with costs lower than any competitors or to sell the same products and services of the same cost but with greater value. Thus, companies tend to increase investment on information technology (IT) in order to maintain strategic advantage and stay further in business. The proceeding paragraphs identify how IT has made an impact in today’s business.

Transformation of Industrial Economies

While leading companies achieve competitive advantage through investments in IT, some are indeed negatively affected by this trend in technology. Today, customers have other preferences hence, old landline communications companies have lessen its customers; travel agencies have reduced over-the-counter sales; and entertainment industries, particularly music and film have lower revenues these past few years as compared with that in the past. But despite of these, technology convergence arises in many ways. IT has broken down boundaries and business relationships while new products and services are introduced. For example, telecommunications network are offering its subscribers with landline telephones merged with Internet services; handheld mobile telephones are becoming Internet access devices and also cellular networks provide financial services to its customers. The bottom-line of it all is that endless possibilities are in the doors of business firms, provided that they are being open to IT-enabled tools and solutions. Negatively affected industries can create new products and services, find another platform to deliver existing products and services, or take partnership from another firm.

Transformation of the Business Enterprise

One foremost impact of technology is the reduced employees in every organization. While traditional businesses tend to hire many employees to increase its production, firms these times are compelled to flatten organizations. IT has simplified business processes. As a result, multi-level management structure is being eliminated and obviously various manual labors are being replaced by machines. Work responsibilities are also becoming flexible among employees as MIS help their work easier and faster and most especially, software allows them conduct major decisions with less supervision. Furthermore, easy communications systems help businesses attract services provided by another firm. Referring to previous example (the manufacturing firm), outsourcing production and transportation is a smart option to reduce transaction cost and/or maintenance cost. Outsourcing results to networked firms, work collaboration and teamwork, which could further result to location independence among modern businesses.

Globalization

Products and services are not just confined to restricted one area but are now being distributed worldwide. Industries find global market possible. Modern technology provides reliable, cheap and efficient communication systems. The Internet is a better avenue to introduce one’s company and its products or services. Accessible information allows businesses compare prices among suppliers and negotiate costs on various services such as couriers and transportation. There are relatively a lot of financial services that makes customer payment convenient. Connectivity and information systems have opened the global market but, global standard is a serious challenge that is yet to develop nowadays.

Conclusion

I find it exciting to belong in this generation where I can witness modern world transformation; doubly excited when I find myself take part in ways to make these transformations possible. Though there are businesses that have shut down due to inability to acquire MIS or a lot of workers are deprived of positions in some corporations by incorporating IT investments, I am optimistic that small businesses still have place in the digital world. Educational institutions create possibilities to reach people from different walks of life to technology-literate them. New players in the enterprise can start from being a small, digitally-enabled organization employing IT-enabled workers. There may be loop holes in the present business shape but, I think technology is just half-way through to settle down its goal to make lives easier.

I have witnessed reduced cost of long-distance communication. I have been benefited by freeware software sites. I have accessed literary works free of charge at a command of my fingertips. I saw that it is very possible to create a network of people from anywhere in the world, share knowledge and resources. Collaboration, sharing, and networking contour today’s business. What if, in the near future, IT would make business synonymous to “free resources for all”?

Reference: Managing the Digital Firm by Kenneth C Laudon and Jane P. Laudon