Introduction:Barletta’s Fine Foods (BFF) Ltd operates from King’s Norton in south Birmingham and supply food products to various retail outlets and restaurants. The company has performed well in the past and has ambitious growth plans for the near future, however there are problems in various functional departments of the company that have hindered its growth. Top management is determined to enhance the performance as well as the efficacy of the business by adapting a strategic decision support system (DSS) that exploits recent advances in the Information technology.
This paper makes an attempt to formulate various strategies for BFF Ltd aimed at enhancing the organisational efficiency and performance. The paper first dwells on the concept of Business organisation in context of BFF Ltd and moves on management decision-making process across the organisations in general and in BFF ltd in particular. The role of information in decision-making is discussed at length. The paper moves on to different kinds of information system (IS) and how they affect decision-making and how using these information systems might benefit BFF LTD in pursuit of their strategic objectives. The paper ends with logical conclusions and recommendation for BFF Ltd.
The objective of this paper is to determine the importance of the connection between the organizational culture and the information system which can be vital to achieve essential business goals. However the proper definition of information system (IS) is important, as different people create confusion in this respect, which according to Anderson (1992) it is the system which captures, records, and ...
The Business OrganisationBusiness Organisations may be visualized as organised groups or communities that specialise in manufacturing various types of products or provide, services of various kinds. The free dictionary (2006) defines business organisations as, “an area of law that covers the broad array of rules governing the formation and operation of different kinds of entities by which individuals can organize to do business”. Carter McNamara (2006) defines Organisations as,” a group of people intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from two people to tens of thousands”.
These organisations differ based on the goals and objectives that they aim to achieve. Some organisations may be for profit while others may be not for profit while some others may be charitable organisations.
Various characteristics of an organisation include a cohesive group of mostly like-minded people working together to achieve certain goals and objectives. Typically, business organisations work towards achieving a vision, which is often directed by a mission statement. Various strategies are formulated in order to achieve various objectives within constrains of environment in which the business operates. The process is defined as strategic management and may be spread across all functional levels.
Andrews (1971) defines corporate strategy as “a pattern of major objectives, purpose or goals and essential policies or plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be”.
The Managing Director of BF F Alphonsus de Marco is a forward-looking ambitious man keen to improve the performance of his company. He is quality conscious and wants the company to adapt to various quality practices and is therefore vying for prestigious BS5750 accreditation. The company’s organisational structure is shown in figure No 1.
The functional organisation of the company consists of Operations, Sales and Marketing, Finance, Human resources and Information technology. A departmental head looks after day-to-day activities of all these functional departments. It appears Information technology has limited or negligible role in functional strategy of the organisation.
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Problems faced by BFF:Company has some problems encountered in all its functional area and have been outlined in Table No 1.
Table No 1 Problems faced by BFF ltd:Department èSales & MarketingOperationsFinanceHuman ResourcesInformation TechnologyHeadGnio BourPaul McMillanMark TownsendSonia LeeGordon McKenzieProblems: qDelivery of wrong productqLate Deliveries.qIncomplete orders.qFaulty products,qLow priority given to important orders. qPoor inventory management.qLack of a proper supply chainqIncomplete and erroneous Sales RepotsqPoor flow and utilisation of financial data. qPayroll data is outsourced.qLack of definite HR policies.qLimited roleqNeed further development and more roles in the strategic planning of BFF.
SWOT Analysis of BFF ltd:Strengths:qOrganic Food.
qSteady Growth with steady turnover and profitability.
qOperating in food industry which is non seasonal and has business all through the year.
qHas a robust supplier base spread across entire Europe.
qCompany has a large customer base.
Weaknesses:qSeem to have a poor organisational culture as manifested in various problems encountered by various functional departments.
qLimited role of Information Technology in strategic decision-making.
qPoor Human Resources.
qLack of scientific inventory management and supply chain.
Opportunities:qThere are opportunities to grow and be the market leader.
qInformation technology can be exploited for strategic initiativeThreats:qCompetitorsqChanging tastes of customers.
qAvailability of substitutes.
Management Decision MakingManagement decision-making depends on a number of factors, most important being the management philosophy and behavior. There are three levels identified:qOperational ManagementqTactical ManagementqStrategic ManagementOperational managers or frontline managers are concerned with day-to-day works in the organisation mostly handling tasks of routine and repetitive nature. The information required for this level of decision-making could include:qHours worked by employees in a weekqVacanciesqCurrent stock levelsqOutstanding ordersqWork-in-progress levels.
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Tactical managers are responsible for short term strategic plans of the company. These may be departmental heads – middle management – and their priorities are to allocate resources and control these so that they are used effectively to achieve strategic objectives. The type of information required to sustain decision-making at this level would include such items as:qProductivity – output per person hour or per machine hourqSales analyses by salesperson or by sales areaqCash flow projectionsqDepartmental staffing levelsqProfit results within a department.
Tactical decisions relate to the business, its suppliers and customers, and typically cover the present and the near future. These plans are made less frequently than operational decisions, perhaps weekly or monthly.
Strategic management is concerned with long-term plans, and typically taken by the top management. The information required to make such decisions would embrace such items as:qReports on overall profitabilityqThe profitability of major sections of the business or of productsqTotal cash requirementsqStudies of current market trendsqProjections of future market prospects.
Management Decisions at BFF Ltd:1.At Strategic level the top management and the functional team leaders have to take various strategic decisions such as defining mission vision and short and long term strategies for the organisation.
2.At Strategic level the managing director has to formulate an effective Information system strategy aimed at full exploitation of the available data and information.
3.At Functional level various team leaders have to align various functions in line with the information system strategy. This would enhance operational efficiency for example an Information technology based supply chain management will improve inventory management system and will avoid duplication of stock. Integrating various marketing, ordering and supply to the supply chain will avoid ordering of unavailable items. Similarly a computerized payroll will improve human resource management efficiency.
4.Operational decisions at BFF involve day-to-day working, such as orders and supplies, marketing reports, vacancies, payroll etc.
Design of an organization is an important facilitator of strategic information systems schemes. Yet ancient IS structures are not aligned with the age of information systems since they cannot cope with the ever increasing change and the fast horizontal indulge and usage of expansive information technologies (Boar, 2001). A design of an organization that takes into account the ideas of internal ...
Decision-making is made at all the three levels though with varied emphasis on different levels. At operational level the information required arises from mainly internal sources, while at strategic level the information is almost exclusively external. Computer based information systems are developed in order to take the operational decisions since the data is readily available and is reliable.
Information System and Management Decision System:Information systems are classified as follows:1.management information system.
2.Operational system. Management Systems.
3.Decision support systems4.Expert systemsManagement Information System: This gathers, organizes, and summarizes data in for coordinating, controlling, and decision-making task. Laudon (2002) writes about importance of management information System, “Management information system is essential for creating competitive firms, managing global corporations, and providing useful products and services to customers.” Information system provides information figure of reports and displays to managers. For example, sales managers through intranet may access sales reports conduct and sales analysis. Rapid advances in Information technology coupled with growths of the have changed the way business is conducted world over.
According to Gareth, (2000) various factors that determine the usefulness of information to management are: quality, timeliness, completeness, and relevance, he goes on to add, “Accuracy and reliability determine the quality of information. According to Volking (1993), “information as accuracy refers to the extent to which information effectively represents a situation as it really is, the accuracy of each source of data used varied widely.”Timeliness is another important factor especially in today’s dynamic business environment Real time information system is the call of the day where decisions are made based on the most current and latest information. “Accounting information should be made available to external decision-makers before it loses its capacity to influence decisions.” (Dyckman1992).
INFORMATION SYSTEMS In a general sense, the term information system (IS) refers to a system of people, data records and activities that process the data and information in an organization, and it includes the organization's manual and automated processes. In a narrow sense, the term information system (or computer-based information system) refers to the specific application software that is used ...
Information must be competitive if it has to help the decision-making. At the same time relevance of Information can make a difference in a user’s decision. Relevance refers to the capacity of accounting information to make different to external decision-makers who use financial reports.
Operational Systems: are concerned with transaction handling and the day-to-day operation of the organisation, usually for a particular department within the organisation. Data are entered and stored in a file format, and are updated regularly during routine processing.
Decision support systems: give direct computer support to managers during the decision-making process. A Decision Support System is an interactive information system that rely on integrated user-friendly hardware and software designed to assist mangers make decisions related to the efficient and profitable running of the business.
Expert systems: can provide expert advice for operational chores like equipment diagnostics, or managerial decisions such as loan portfolio management. (O’Brien, 1997) Expert systems have been developed for subjects such as medical diagnosis, oil exploration, financial planning, taxation return preparation, chemical analysis, surgery, weather prediction, computer repair, nuclear power plant operation, newspaper layout, interpreting government regulation, and troubleshooting computer systems configurations (Long, 1994)BFF can install a management Information system based on accurate, timely, relevant and complete information. The entire organisation has to be aligned with the strategic goals and objectives of the
organisation. Similarly at strategic level BFF can also develop a Decision Support System.
Conclusion:Information systems are the system that managers plan and design to provide themselves with the specific information they need. BFF is struggling with various Information system need in order to establish their strategic positions in the market and emerge as the market leader.
Recommendations:Various measures that BFF can adapt may be summarized as:1.Perform a strategic planning exercise that outlines a Mission statement and a Vision.
2.Conduct an environmental analysis and derive strength and weaknesses, opportunities and Threats for the organisation.
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3.Establish a clear cut Information Systems Policy.
4.Develop a management information system.
5.Develop a Decision support system.
6.Computerize entire order taking, operations, purchasing of raw material, and supply of products to various restaurants and outlets and coordinate various supply chain processes in Real time.
7.Various reports analysis and forecasts should be made available to all the functional heads as well as the managing director to facilitate informed decision-making.
Andrews, K.R., (1971), The Concept of Corporate Strategy (Homewood, Illinois, Dow Jones-Irwin).
Business Organisations; The free dictionary (2006) Available online at the web site; http://encyclopedia.thefreedictionary.com/business+organisation Retrieved on 3rd November 2006Carter McNamara (2006), Basic Definition of
Organization; Available online at the web site; http://www.managementhelp.org/org_thry/org_defn.htm Retrieved on 3rd November 2006Dyckman, T., & Dukes, R., 1992, Intermediate Accounting, IRWIN, AmericaGareth R.Jones, Charles W.L. Hill & Jennifer M.George (2000) Contemporary management, The McGraw-Hill Companies, America.
Kenneth C. Laudon & Jane P. Laudon, 2002, Management Information Systems, Upper Saddle River, New Jersey 07458,America.
Larry Long, Computers and Information Systems, 4th Ed., 1994, Prentice Hall, ISBN: 0-13-497884-6, chapter. 12, pages 365 – 397Mitchell, Volking, Yan E. Management Decision. Analysing the quality of management information: A suggested framework, London, 1993, Vol. 31, Iss. 8; pg. 12,O’Brien, J., 1997, Introduction to information, IRWIN, America.