IT Management Applications

It is the job of managers to attempt to control processes and functions within the organization and to make strategic decisions concerning its future. With the explosion of information that has occurred over the past few decades, this means that managers need to be able to process and analyze massive amounts of data. Information technology offers managers a number of tools to support them in their decision making and planning processes as well as in their administrative and organizational tasks. Management information systems are information technology systems that are used to help managers effectively manage the organization as a whole or manage structured problems, processes, functions, or departments within the organization. Decision support systems are information technology systems that are used in unique, complex situations where a decision needs to be made.

Every day, managers are required to make countless decisions in an attempt to control processes and functions. Many of these decisions can affect the effectiveness and efficiency of the organization as well as its profitability. Processes that malfunction or schedules that slip even in the smallest way can snowball, affecting other parts of the project or organization. It is the manager's job to keep this from happening and to make decisions about how best to keep the projects and processes on track so that the organization can continue to perform at a high level.

In today's organizations, this means that the manager needs to be able to process and analyze massive amounts of data -- facts, figures, or details -- in order to make the best decision possible. In addition, according to systems theory, the organization comprises multiple subsystems and the functioning of each affects both the functioning of the others and the organization as a whole. On a practical level, this means that the decisions a manager makes often affect not only the function, department, or specific process or personnel about which the decision was made, but the whole interconnected chain. For example, the manager of the engineering department may be faced with the decision about how to best deploy his/her personnel on the various projects being undertaken by the organization. If the engineering manager makes the deployment decision based on which project manager complains the loudest, the other projects may not have sufficient personnel to do the engineering tasks on their projects. Because of this fact, the other projects may experience schedule slippages or end up with less than optimal engineering designs for their products. Either consequence could mean penalties imposed by the customer for late delivery or the product not meeting specifications as well as longer term consequences of the business losing its reputation in the industry and not being able to win new work. Therefore, it is essential that managers make the best decisions possible.

Use of Management Information Systems

With the advances in computer technology that have occurred over the past decades, information technology is able to offer managers a number of tools to support them in their decision making and planning processes as well as in their administrative and organizational tasks. Management information systems are information technology systems that are used to help managers effectively manage the organization as a whole or manage structured problems, processes, functions, or departments within the organization. For example, the manager of a bookstore needs to know what inventory is on hand both in the store and at the distributor, what books have been sold during given time periods, and what books customers have requested. S/he also needs to receive this information in usable form (e.g., with a user-friendly interface that allows searching of the various databases) and be able to use these data to place orders to replenish stock and meet current and anticipated customer demands. The manager also needs to know what the buying trends of the store's clientele are, what the trends are in new books, and be able to forecast specific titles that should be purchased and stocked as well as whether or not the bookstore should change the emphasis in the types of books that it carries. The manager also needs to know how much money was received each day including whether the receipts were by cash, check, house account, or credit card and relay this information to corporate headquarters. If the receipts do not balance at the end of the day, the manager needs to discover where the discrepancies lie and balance the accounts. The manager also needs to be able to schedule personnel so that all shifts are covered with sufficient personnel, including sales associates and receivers, taking into consideration the various needs of the employees (e.g., days off during the week, maximum number of hours to be worked during the week, requests for leave or vacation time, shift preferences). The manager can be aided in all these tasks and more through information technology.

Resources for an Effective Management Information System

As illustrated in Figure 1, a good management information system uses several types of resources. The physical system of the organization includes the facilities, equipment, and personnel necessary to produce the business's products or services. Internal data are gathered throughout the physical system, stored in the database, and processed by the information processing resources. These resources comprise the server, workstations, application programs, and information technology personnel. The information technology system together is used to analyze the data and summarize it in ways that the managers and executives can use and understand. These individuals use this information to make decisions about the operations of the organization. There are two other sources of information that need to be taken into account by decision makers. These are information gathered from the environment in which the organization operates (e.g., political realities, business intelligence, economic trends). This information can also be fed into the management information system and used in decision making. Not all data can be processed by the information technology system, however. As illustrated in the figure, there are additional internal data (e.g., word of mouth, observation) that are important in managerial decision making processes that can only be factored in by the manager. The management information system alone cannot make decisions. It is only a tool to be used by the manager.

Data Retrieval & Processing

Management information systems can support managers in their tasks by retrieving and processing data received during transactions and presenting it to managers in formats that they can use in their operations and decision making capacities. Management information systems use data captured and stored during transactions (e.g., what books have been sold, what books have been received, how many transactions have been made and in what amounts). Management information systems synthesize and summarize this information and present them to the manager in a usable form rather than giving him/her raw data. This is done through various screen or print reports designed into the system or through special reports designed by the manager to meet the special needs of the store or situation.

Monitoring & Evaluation

Management information systems can also support managers in monitoring and evaluating situations (e.g., whether or not the new line of children's books is doing well) and making decisions concerning what actions should be taken (e.g., what types of books people are special ordering and do these show a trend that should be taken into account for the store's normal line of books). In addition, management information systems support managers in making recurring decisions (e.g., how to schedule employees, what books should be ordered).

Operations Control

Information technology can also help managers control the operations within the organization. With the use of information technology systems, organizations can process large numbers of transactions efficiently. However, these systems can be vulnerable in a number of areas. Operating systems can have errors in coding or can be penetrated by computer criminals. Applications programs can have errors that affect not only the server, but can replicate over the client computers as well. Proprietary or sensitive data on the server can be breached by internal or external sources. If any component in the system goes down, the entire system or network can go down. These and other issues need to be addressed if the system is to be of reliable aid to the manager in operating and controlling the organization and its processes.

Tools to Aid in Decision Making

In addition to helping managers run the day-to-day operations of the business through the support of management information systems, information technology can aid managers in their tasks by giving them the tools to support them in making decisions. One of the major tasks of the managerial job description is to make decisions that affect the health and effectiveness of the operation. Although some of these decisions are straightforward or have few alternatives, many are not. To help management make such complex decisions, one of the tools of information technology is the decision support system. These management tools are interactive computer-based systems that help managers and others make decisions regarding operations of the organization.

Decision support systems are used in unique, complex situations in which a decision needs to be made. These tools help decision makers better understand the issues underlying the situation and to make decisions in unstructured situations when the extent to which certain variables that influence the activity or outcome are not initially clear or only part of the information is available in advance. Unstructured questions require decision support systems to be flexible so that the impact of various variables and conditions can be tested and the analysis be returned to the user in a form that is useful for the specific situation. Typically, finding the answer to unstructured problems also requires an iterative process: the answers to the questions are not ends in themselves, but raise other questions for consideration that need to be run through the decision support system.

Decision support systems provide the information and structure that decision makers need to make a rational decision by creating a quantitative model of the situation and processing data to show the impact of the variables under consideration on the outcomes.

Frequently, decision support systems require the processing of data from multiple files and databases. Decision support systems are used to help decision makers answer questions concerning conditions under which an outcome might occur, what might happen if the value of a variable changes, or how many potential customers have certain characteristics.

Expert Systems

Another type of information technology application that is used by managers is the expert system. These systems often include the application of artificial intelligence to help managers make decisions. Artificial intelligence is a branch of computer science concerned with the development of software that allows computers to perform activities normally considered to require human intelligence. Artificial intelligence applications can be used in the development of expert systems that allow computers to help managers make the kind of complex, real world decisions with which they are faced every day. Expert systems are useful in decision making for medical diagnosis, manufacturing quality control, and financial planning.

Top executives tend to take a more global view of the organization than middle managers. In addition, top-level managers are more concerned with the systems approach and need to know how decisions made regarding one part of the organization affect other parts of the organization as well. Executive support systems take these needs into account. To support top-level managers in such decision making processes, executive support systems allow executives to look not only at the organization as a system itself, but at the organization as part of a larger system as well. Executive support systems permit scanning of data and information on both internal activities as well as the external business environment.

Executive Information Systems

Executive information systems are data-driven decision support systems designed to support executive decision making. This type of information technology application presents information about the activities of the company and the industry and offers quick, concise updates of business performance for top executives. Executive information systems have powerful processing capabilities in order to summarize and present data in a format appropriate to executive decision making

Most top-level managers who use executive information systems find them to be helpful in supporting them in their decision making processes. This is partially because these systems have relatively simple user interfaces to support the way that most top-level managers work and they can be used for a wide range of purposes. In addition, since executives tend to look at things from a higher level than do many analysts, executive support systems highlight significant data and present information in summary form rather than giving the user all the details and supporting data, although users are allowed access to these data if desired. This feature allows the user to go down several levels to acquire the data necessary to make a well-informed decision.

Applications

Khoong and Ku (1994) describe the total service concept project (TSC) of the Information Technology Institute of Singapore. The purpose of this information technology project was to achieve a comprehensive suite of generic but robust tools to support management decision making of service operations and resources. The system was designed around state-of-the-art operations research and management science models to support decision making in operations management -- those areas of management that are concerned with productivity, quality, and cost in the operations function (i.e., activities necessary to transform inputs such as business transactions and information into outputs such as completed transactions) as well as strategic planning for the organization. The TSC framework focuses on the management of service operations and resources, with an emphasis on manpower and service management. The TSC comprises four products: service design and analysis, manpower establishment planning, service resource management, and service activity management. The TSC project is applicable to a wide variety of organizations including service organizations in general and organizations requiring direct customer contact. These tools were made to be useful for airports, hospitals, transportation companies, fast food chains, banks, hotels, supermarkets, and public services organizations as well as for the organization of large events such as sporting matches, trade fairs, and conventions.

Service Design & Analysis

The service design and analysis component supports strategic decision making for service configuration. This component can be used to perform service analysis to determine whether there will be a customer demand for a given service and to predict what the level of customer demand will be. In addition, the service analysis component allows the user to analyze the effects of various service levels on customers. The service location module is used to determine appropriate locations for service facilities using the criterion of cost optimization in service provision. The service layout module helps managers determine the appropriate layout for service facilities to optimize costs related to the flow of operations and materials within the facility. The final module of the service design and analysis component is service packaging, which helps configure types or grades of services to be provided and predict the effect of these on customer satisfaction.

Manpower Establishment

The manpower establishment planning component is used to support analyses regarding manpower resource management within the organization. This component comprises both descriptive manpower establishment planning and normative manpower establishment planning. The descriptive module is used to analyze data concerning the state of manpower establishment including forecasting, waste analysis, labor market analysis, and career planning. The normative module focuses on developing courses of action to improve the manpower establishment. These functions include considerations of staff movement, succession planning, job/task assignment, performance management, recruitment, and training.

Service Resource Management

The service resource management component of the TSC is concerned with the efficient management of key management and other resources within a service organization. This component has two modules. The resource deployment module is used by managers to help plan how best to allocate service resources including manpower, facilities, and equipment to specific tasks over time. This module includes considerations of on-order deployment (i.e., when orders for service are placed in advance), on-call deployment (i.e., when orders come in on an ad hoc basis), and on-wait deployment (i.e., when service resources operate continually in the background without disturbing resource deployment). In addition, the service resource management component has a manpower roistering module that helps schedule employees for each shift, including consideration of days off and shift types.

Service Activity Management

The service activity management component of the TSC helps managers effectively plan the deployment and use of shared resources that are needed for multiple activities. This component includes a project management function to help managers schedule project activities. It also includes an event management function to help managers schedule activities in large organized events, including optimal sequencing of events within resource constraints as well as the preferences of both the customers and the people involved in the events. This component also has a module to help manage time and resources in the provision of personalized services. This module includes appointment scheduling and meeting scheduling sub-functions. Finally, the service activity management component has a timetabling module to help managers allocate resources to parallel activities over time with consideration of competition for limited time, facilities, instructors, and students. This module also includes tools for course scheduling and test scheduling.

Terms & Concepts

Artificial Intelligence (AI): The branch of computer science concerned with the development of software that allows computers to perform activities normally considered to require human intelligence. Artificial intelligence applications include the development of expert systems that allow computers to make complex, real world decisions; the programming of computers to understand natural human languages; the development of neural networks that reproduce the physical connections occurring in animal brains; and the development of computers that react to visual, auditory, and other sensory stimuli (i.e., robotics).

Client Computer: A computer that accesses information stored on a server.

Decision Support System (DSS): A computer-based information system that helps managers make decisions about semi-structured and unstructured problems. Decision support systems can be used by individuals or groups and can be standalone or integrated systems or web-based.

Executive Information System: A data-driven decision support system designed to support executive decision making by presenting information about the activities of the company and the industry.

Expert System: A decision support system that utilizes artificial intelligence technology to evaluate a situation and suggest an appropriate course of action.

Information Technology (IT): The use of computers, communications networks, and knowledge in the creation, storage, and dispersal of data and information. Information technology comprises a wide range of items and abilities for use in the creation, storage, and distribution of information.

Manager: A person whose job it is to facilitate the process of efficiently and effectively accomplishing work through the coordination and supervision of others.

Management Information System (MIS): A business information technology (IT) system that is used to help managers effectively manage the organization as a whole or manage structured problems, processes, functions, or departments within the organization.

Operations Management: Those areas of management that are concerned with productivity, quality, and cost in the operations function (i.e., activities necessary to transform inputs such as business transactions and information into outputs such as completed transactions) as well as strategic planning for the organization.

Operations Research: An analytical method of problem solving and decision making in which problems are broken down into basic components and solved using mathematical analysis.

Service Sector: In essence, the service sector includes those industries and businesses that provide services rather than tangible products for individual consumers, businesses, or a combination of the two. These can include physical, mental, or aesthetic activities (e.g., legal services, entertainment, auto repair) or the transformation of something through such an activity (e.g., hair cutting, education, management consulting).

Server: The computer that hosts a network and provides services to the other computers in the network (e.g., web pages). The term server is also used to refer to the software running on the server computer.

Systems Theory: A cornerstone of organizational behavior theory that assumes that the organization comprises multiple subsystems and that the functioning of each affects both the functioning of the others and the organization as a whole.

Bibliography

Drnevich, P. L., & Croson, D. C. (2013). Information technology and business-level strategy: Toward an integrated theoretical perspective. MIS Quarterly, 37 (2), 483-509. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebsco-host.com/login.aspx?direct=true&db=bth&AN=87371536&site=ehost-live

Li, C., Peters, G. F., Richardson, V. J., & Weidenmier Watson, M. (2012). The consequences of information technology control weaknesses on management information systems: The case of Sarbanes-Oxley internal control reports. MIS Quarterly, 36 (1), 179-204. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=71153854&site=ehost-live

Lucas, H. C. Jr. (2005). Information technology: Strategic decision making for managers. New York: John Wiley and Sons.

McLeod, R. Jr. (1986). Management information systems (3rd ed.). Chicago: Science Research Associates.

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Senn, J. A. (2004). Information technology: Principles, practices, opportunities (3rd ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.

Sprague, C. (2014). 21st Century IT Applications. Research Starters Business. Retrieved December 1, 2014, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=e6h&AN=27577954

Vieira da Cunha, J. (2013). A dramaturgical model of the production of performance data. MIS Quarterly, 37 (3), 723-748. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=89477783&site=ehost-live

Suggested Reading

Harrysson, M., Metayer, E., & Sarrazin, H. (2012). How "social intelligence" can guide decisions. Mckinsey Quarterly, (4), 81-89. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=82911528&site=ehost-live

Khoong, C. M. & Ku, Y. W. (1994). The TSC project: A strategic R&D initiative in operations management. International Journal of Operations & Production Management, 14(8), 35-46. Retrieved June 6, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=3982100&site=ehost-live

Marco, D. (2005). CIOs and meta data management, part 2. DM Review, 15(8), 60-65. Retrieved June 7, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19501210&site=ehost-live

Molina-Azorin, J. F. (2012). Mixed Methods Research in Strategic Management: Impact and Applications. Organizational Research Methods, 15(1), 33-56.Retrieved December 1, 2014, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=69897964

O'Brien, J. A., & Marakas, G. M. (2011). Management information systems. 10th ed. New York, NY: McGraw-Hill/Irwin.

Spangler, T. (2004). Putting tasks on the fast track. Baseline, (37), 68-75. Retrieved June 6, 2007, from EBSCO Online Database Business Source Complete. http://search.ebsco-host.com/login.aspx?direct=true&db=bth&AN=15143379&site=ehost-live