Management information systems revision question and answer

CPA-Quantitative-Analysis-Section-4 BLOCK RELEASE

Organizations are now moving from Strategic Management systems towards Enterprise systems and yet further to Industrial Networks and Extended Enterprise systems.

a. Describe the features of Enterprise computing and industrial networks;
b. What are the business and technological reasons for this move?
c. Outline the key elements required to build an enterprise information technology structure
d. Outline potential organizational problems in the creation of these enterprises systems.
Enterprise systems are business systems. a. Features: –
o Enterprise computing considers the firm as a whole and integrates key business processes into single software systems so that information can flow seamlessly through the enterprise. As a result co-ordination and efficiency of functions should
be improved (e.g. sales/stock control/accounts/production/logistics all working from the same data).
o Decision making based on the same information should be improved. An enterprise view is taken of business strategy and processes, technology, and communication networks.
q Are mostly predefined and perform structured tasks e.g. recording cash received and paid out..
o These systems also summarizes information for use the higher management.

o These systems are characterized high input and output levels and are considered strategic for the survival of the enterprise.
b. Business and technological reasons: –
The global market is highly competitive so organizations must look to methods to improve their business performance. The business reasons for moving are:-
o Need to reduce the operations costs of the business as automation results in reduced costs.
o Need for competitive advantage which comes with the new systems.
o Need to increase market and improve sales through e-commerce which is viable through the new systems.

In parallel the technological reasons for moving include
o Increased processing power which has led to increased output.
o Increased t use of client/server and desktop systems which has also given the business a competitive advantage.
o Reduction in data storage costs and elimination of paper work.
o Expanded public communication networks thus enable the business to communicate with their clients easily.
o Complex enterprise software packages are now available which increase the efficiency of operation of the business.

c. Key elements: –
o The ability to integrate key legacy with client/server systems, internet, intranet and various other intercommunication systems is one key element.
o The availability of consultancy services with appropriate experience, custom software developers,
o Local or global communication service providers are all essential elements as well.
o Availability of cash to support the venture.

d. Organizational problems: –
o Enterprise systems require significant organizational change in the ownership of information bringing to the fore personnel problems.
o A change to more complicated technology from traditional legacy systems, large initial costs with difficult decisions on the quantification of long-term benefits.
o Management has to take a long term view when the business world changes like shifting sand, which is very difficult.
o The may be resistance from the employees who may view the change as a chance to lose their jobs.
o Lack of qualified personnel to man the new system could also pose a major problem.

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