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University of Wales

MBA (Marketing)

Management Information
&
Communication Systems

Drowning in a Sea of
Information

Submitted to: Mr Trevor Sharpe


Submitted By: Shahrooz Abbas
Student ID- 114255

Greenwich School of Management


TABLE OF CONTENTS

1 INTRODUCTION........................................................................................................2

2 ANALYSIS.................................................................................................................3

2.1 Information Overload.........................................................................................5

2.1.1 Effects on Businesses and Organisations....................................................6

2.1.2 Information Systems gone wrong................................................................7

2.1.3 Too much information effecting managers and employees........................7

2.2 The other side of Information abundance.........................................................8

2.2.1 Positive change in Organisations with advancement of Internet and MIC


systems ............................................................................................................... 9

2.2.2 Difference between Information Systems and Management Information


Systems................................................................................................................9

2.2.3 Applications of MIC Systems......................................................................10

2.2.4 Benefits of MICS .......................................................................................12

2.2.5 Integration of Management functions.......................................................13

3 CONCLUSION.........................................................................................................13

4 BIBLIOGRAPHY.......................................................................................................14

1 INTRODUCTION
In all the books or papers written on basic sciences, one of the most frequently used terms is
“Information”. Science has proved that information is processed, stored, retrieved and
transmitted by every single neuron in our brains. So basically, information is anything that
humans are capable of perceiving. This includes books, journals, magazines, written
communication, spoken communication, art, music, photographs and nearly everything which we
can perceive. That means everything we come across in our lives is capable of providing and
does provide us with some sort of information. Thus information is the material, which can
educate us to have a better understanding of our own world.

Communication, which used to be very difficult, unreliable and expensive till few decades ago,
has been enhanced and made easy with the introduction of the World Wide Web and
telecommunication. Video conferencing and social networks like facebook, Skype etc made it
possible to connect, communicate and share data with people across the globe in real time.

Organisations are experiencing new heights of success with the introduction of computer
applications for business and management. Business people can now manage all of their tasks,
calculate, enhance, predict and even make vital decisions with the help of their Management
Information and Communication Systems. Today, we live in the midst of the “Information Age”
and Information and communication is accelerating exponentially with time.

In modern world, we have solved the problem of information accessibility but in solving it, we
created the problem of Information Overload, consuming our attention. Now people find it even
more difficult to cope with all the new information they receive through all the mediums of
Information and Communication. Constant and rapid changes in technologies and organisations
have lead to unpredictable and complex side effects.

Human brain is the only resource we have to consume all the information. Huge amount of
irrelevant and poor information can lead to confusion and psychological stress. In this essay, we
will critically analyze how information systems and other resources can help us to overcome the
current glut of information in organisations and society.

2 ANALYSIS

“In an information rich world, the wealth of information means a dearth of something else: a
scarcity of whatever it is that information consumes. What information consumes is rather
obvious: it consumes the attention of its recipients. Hence a wealth of information creates a
poverty of attention.”

Information was difficult to access till the last century. The only sources of information were
books, journals and newspapers and it was not practical to transfer huge amount of information
from one corner of the world to the other. Communication was even more difficult. The main
medium of communication was to write letters or to make long distance calls, which was very
unreliable and expensive.

In the last 50 years, the explosive introduction and development of Internet and the information
and communication technologies started a new era of our now called “Information Age”.
Information which was limited to books and journals, expanded millions of times with the help
of World Wide Web covering and bringing the information of the whole world with just a click
of a finger, hundreds of television channels, satellite radio etc. The dream of easy, fast, reliable,
and very cheap communication became a reality with the introduction of cell phones, E-mail and
modern internet applications. We can now talk (Skype), chat (Messengers), share photos, videos,
songs and make new friends (facebook, twitter, you tube etc) with people all around the world.

Early part of the last century internal reporting for businesses and other organisations was
manual and periodical, by-product of the accounting system and with some additional statistics,
and gave limited and delayed information on management performance. Later, data was
distinguished from information, and so instead storage of mass of data only the relevant
information was being stored.

Organisations started exploring new horizons of success with the introduction of Management
Information and Communication Systems (MICS). “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” (Wikipedia). They can also be described as “The discipline focused on
the integration of computer systems with the aims and objectives on an organisation (Anon).
According to Philip Kotler (2006) "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."
These Management Systems allowed the organisations to manage their resources, people,
machinery (technology and computers), money and time and allowed managers to make vital and
important decisions based on the records, graphs and predictions provided by these systems
ultimately increasing the overall effectiveness, efficiency and profitability.

Information is moving very fast and becoming more and more plentiful and people everywhere
are benefiting from it. All of these advancements have removed the problem of lack of
information and its accessibility but constant changes in technologies and organisations have
lead to unpredictable and complex side effects. Lack of information is replaced by
overabundance of information

MICS demands specialized staff support, expensive training for managers and employees, a
redefinition of jobs and a really heavy budget for the cost of hardware, software and its
maintenance. The problem associated with these systems is that they are only as good as the
information that goes into them, so if poor or incomplete data is used, it can distort the
management information system and results in poor decisions. So managers have to monitor all
the coming information and look into the precise details and this extra pressure often results in
anxiety, stress, constant worry, emotional impacts affecting their relationships and some other
psychological impacts. Moreover, all the data is integrated into a single database. If database
damages due to any reason, then the whole data may get lost forever and this can affect an
organisation a great deal for a long span of time but disaster recovery somewhat tries to limit this
risk.

2.1 Information Overload

“Information Overload is when you are trying to deal with more information than you are able to
process to make sensible decisions. The result is either you delay making decisions, or that you
make the wrong decisions.

The first recorded use of the phrase “Information Overload” was used by Alvin Toffler in
1970, when he predicted that the rapidly increasing amounts of information being produced
would eventually cause people problems.” (Infogineering)
Information has always helped mankind giving them a lavish life and a developing culture,
overcoming the basic challenges of life. Food and nutrition, reliable infrastructures, stable
societies, freedom of speech, political systems functioning around the world, all became possible
due to information and its progress. It was not long ago when a lack of information was one of
society’s fundamental problems. Lack of information threatened every level of society, from our
daily concerns to our major political and economic decisions but for the past 50 years, something
strange started to happen. Within a few decades, our drought of information transformed into a
flood.

A study done by Reuters Business Information, found that 73% of the 1,313 business Managers
in the US, England, Hong Kong, Singapore, and Australia felt that their success depended on
having a large amount of information on-hand. The same study also showed that in 67% of
respondents, Information Overload was responsible for the stress in their personal and work
lives.

2.1.1 Effects on Businesses and Organisations

With the advent of computer programs for business applications, organisations started using
computers for tracking sales and data payroll in the beginning. Over time these applications
became more complex and began to store increasing amounts of information while also
interlinking with previously separate (Islands of Automation) 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 "MICS" 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 System, Human Resource Management, Corporate Resource Management,
Enterprises Resource Planning, Supply Chain Management, Customer Relations Management,
Project Management and Database retrieval application (Wikipedia).

These systems really helped organisations to perform and manage their tasks swiftly and
efficiently. In return, they demanded a need for specialized staff support, expensive and
extensive technical and theoretical training for managers and employees, a new redefinition of
jobs and a really heavy budget for the cost of hardware, software and its maintenance. “60 to 80
percent of the whole budget of information systems is dedicated to maintenance.” (Kaplan, 2002)

The problem associated with these systems is that they are only as good as the information that
goes into them and depends on the right alignment of software and hardware precision.
Management decisions based upon ineffective, inaccurate, or incomplete MICS may increase
risk in a number of areas such as credit quality, liquidity, market/pricing, interest rate, or foreign
currency. A flawed MICS causes operational risks and can adversely affect an organization’s
monitoring of its fiduciary, consumer, fair lending, Bank Secrecy Act, or other compliance-
related activities.

Since management requires information to assess and monitor performance at all levels of the
organisation, MICS risk can extend to all levels of the operations. Additionally, poorly
programmed or non-secure systems in which data can be manipulated and/or systems requiring
ongoing repairs can easily disrupt routine work flow and can lead to incorrect decisions or
impaired planning.

2.1.2 Information Systems gone wrong

e-bay Website shut down for 11 hours: E-bay, the successful online auctioneer had a hardware
failure in a disk backup system at 11:34 A.M PST one day, and so the outage began. Technicians
attempted to fix the problem, but when they tried to restart everything they encountered further
problems in both the primary and secondary systems. They brought a third backup system online
at 2:45 P.M PST, which worked for nearly 40 minutes, but that failed too. The website was
finally fully restored by about 10 P.M that evening.

Nowadays, entire strategy and success of a firm rely on the effective use of information systems.

2.1.3 Too much information effecting managers and


employees

If Information systems are not well integrated and thoroughly implemented, then it can result in
an extra effort by the managers and employees to compile the reports. Managers need precise
information of the business sectors and if the information systems provide them information of
all the functions of the organisation, then it becomes really difficult to extract useful and relevant
information. Moreover, they also have to verify the authenticity of information and results in
hand. This has resulted in anxiety, stress, constant worry, emotional impacts affecting their
relationships and some other psychological impacts.

2.2 The other side of Information abundance

We have discussed thoroughly about the impacts of effects of access of information in today’s
world, now let’s take a look on the other side of the picture. The advantages of this information
culture are way down the human imagination.

Korea, where web can be accessed everywhere is on top of the world’s education league tables
and is the leading country in terms of mathematics and sciences due to high penetration of
internet since an early age. When this generation will prosper, they will be more intelligent and
will represent the importance of communication.

Information has made it possible to track everything and everyone. We can now find everything
easily. Literature, arts, information, entertainment, people and almost everything we come across
in our lives. Therefore interaction between individuals and information systems are numerous.

Figure 1. (Turban, Leidner, McLean, Wetherbe)


Trade and businesses are revolutionized with information. Now any body can sell products from
any where around the world with the help of websites like e-bay and Amazon.

Government can track the records of people and can keep an eye on everything. Methods can be
used to spy the assets which are a threat to national security and can be destroyed.

2.2.1 Positive change in Organisations with advancement


of Internet and MIC systems

Advancement in information and communication has revolutionized the concept of business in


organisations. The trend in business today is to use the public internet and web as the vehicle for
business to business electronic communication. The internet have enabled small to midsized
firms to participate in business markets once reserved for large corporations. With the entrance
of buyers and suppliers of all shapes and sizes, the mass adoption of these technologies has
propelled business to business into the forefront of modern commerce.

The development and management of information technology tools assists executives and the
general workforce in performing any tasks related to the processing of information. MICS and
business systems are especially useful in the collection of business data and the production of
reports to be used as tools for decision making.

2.2.2 Difference between Information Systems and


Management Information Systems

“The terms MICS and information system are often confused. Information systems include
systems that are not intended for decision making. The area of study called MICS 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. MICS has also some differences with Enterprise Resource Planning (ERP) as ERP
incorporates elements that are not necessarily focused on decision support.” (Wikipedia)

Any successful MICS must support businesses Five Year Plan or its equivalent. It must provide
for reports based up performance analysis in areas critical to that plan, with feedback loops that
allow for titivation of every aspect of the business, including recruitment and training regimens.
In effect, MICS must not only indicate how things are going, but why they are not going as well
as planned where that is the case. These reports would include performance relative to cost
centres and projects that drive profit or loss, and do so in such a way that identifies individual
accountability, and in virtual real-time.

2.2.3 Applications of MIC Systems

With computers being as ubiquitous as they are today, there's hardly any large business that does
not rely extensively on their IT systems. However, there are several specific fields in which
MICS has become invaluable.

2.2.3.1 Data Processing

Not only do MICS allow for the collation of vast amounts of business data, but they also provide
a valuable time saving benefit to the workforce. Where in the past business information had to be
manually processed for filing and analysis it can now be entered quickly and easily onto a
computer by a data processor, allowing for faster decision making and quicker reflexes for the
enterprise as a whole.

2.2.3.2 Strategy Support and Enhanced decision making with


MIC systems

While computers cannot create business strategies by themselves they can assist management in
understanding the effects of their strategies, and help enable effective decision-making.
MIC systems can be used to transform data into information useful for decision making.
Computers can provide financial statements and performance reports to assist in the planning,
monitoring and implementation of strategy.

Accurate decision making demands accurate, timely and relevant information. There are three
characteristics of decisions.

Unstructured decisions: These are decisions in which decision maker must provide judgement,
evaluation and insight to solve the problem. Each of these decisions is novel, important, and non
routine.

Structured decisions: They are repetitive and routine and involve a definite procedure for
handling them.
Semi structured decisions: They have elements of both above types of decisions, only part of
problem has a clear-cut answer.

Improved and effective MIC systems have made decision making simple and easier then ever.
Senior executives, who face many unstructured decisions like establishing a firm’s five year goal
or deciding which new markets to enter, requires access to news, government reports and
industry views as well as high-level summaries of firm performance and also require senior
managers to use their own best judgment and poll others for opinion. MIC systems provide a
valuable function in that they can collate into coherent reports unmanageable volumes of data
that would otherwise be broadly useless to decision makers. By studying these reports senior
executives and managers can identify patterns and trends that would have remained unseen if the
raw data were consulted manually.

MIC systems can also use these raw data to run simulations – hypothetical scenarios that answer
a range of ‘what if’ questions regarding alterations in strategy. For instance, MICS can provide
predictions about the effect on sales that an alteration in price would have on a product. These
Decision Support Systems (DSS) enable more informed decision making within an enterprise.
Hence increasing precision of decisions and saving a lot of time effort and energy.

Proctor & Gamble Restructure its Supply Chain: In early 1990’s P&G used MICS
successfully to restructure its supply chain. Prior to the MICS, the management was unable to
make good decisions about where to make plants and distribution centres for new products in
North America because supply chain was extremely large, complex and affected by many
different variables. Initially, bad decisions were taken by management about where to locate
plants and distribution centres increased cost to procure, manufacture and ship P&G products
because plants and centres did not operate efficiently. They also polled managers in different
parts of the business for ideas on where to allocate supply chain resources. This did not work
because it only return a few alternative designs that reflected local and corporate management
biases and ruled out many other possible design options. The solution was achieved by building a
new model-based information system evaluating large quantities of data and thousands of
variables and determining an optimum allocation of supply chain resources from both
operational and financial standpoints. It paid off and the company consolidated North American
plants by 20 percent and lowered supply chain cost by $ 200 million each year.
2.2.3.3 Management by Objectives using SMART ratio

While MICS are extremely useful in generating statistical reports and data analysis they can also
be of use as a Management by Objectives (MBO) tool.

MBO is a management process by which managers and subordinates agree upon a series of
objectives for the subordinate to attempt to achieve within a set time frame. Objectives are set
using the SMART ratio: that is, objectives should be Specific, Measurable, Agreed, Realistic and
Time-Specific.
The aim of these objectives is to provide a set of key performance indicators by which an
enterprise can judge the performance of an employee or project. The success of any MBO
depends upon the continuous tracking of progress.

In tracking this performance it can be extremely useful to make use of an MICS. Since all
SMART objectives are by definition measurable they can be tracked through the generation of
management reports to be analyzed by decision-makers.

2.2.4 Benefits of MICS

The field of MICS can deliver many benefits to enterprises in every industry. Expert
organisations such as the Institute of MICS along with peer reviewed journals such as MICS
Quarterly continue to find and report new ways to use MICS to achieve business objectives.

2.2.4.1 Core Competencies

Every market leading enterprise will have at least one core competency – that is, a function they
perform better than their competition. By building an exceptional management information
system into the enterprise it is possible to push out ahead of the competition. MICS provide the
tools necessary to gain a better understanding of the market as well as a better understanding of
the enterprise itself.

2.2.4.2 Enhances Supply Chain Management

Improved reporting of business processes leads inevitably to a more streamlined production


process. With better information on the production process, comes the ability to improve the
management of the supply chain, including everything from the sourcing of materials to the
manufacturing and distribution of the finished product.

2.2.5 Integration of Management functions

Effective and efficient information and communication plays an integral part in success of an
organisation. This is normally achieved by well structured MIC systems integrated throughout
the organisation. The integration of management functions also helps managers and employees
to overcome information overload increasing the overall efficiency of the managing team. This
integration reduces wasteful redundancies and generates possible synergy effects.

Access of information is subjected to the level of authorization an employee or manager has and
in this way, people are only authorized to information relative to their work. Helping managers
to extract information easily from each department and compiling information with precise and
accurate data. It provides the facility to all management departments to generate their own ad hoc
reports achieving real time and on time reporting. Moreover, it also reduces the cost of paper,
printing, mail and messengers and if all information is needed by top management they can just
access.

3 CONCLUSION
Our relationship with information shapes our professional and personal lives. The overload of
information although has its drawbacks but if processed and streamlined to cater for a specific
need, can be extremely powerful in making day to day decisions.

The revolutionary advances made in Management Information and Communication Systems has
resulted in reduction in process inefficiencies and enhancement of the over all performance of
organisations. Any successful and progressive organisation would recognize the value of MICS
and would view MICS as strategic value added investment.

I conclude that we have enough resources to deal with the current glut of information but there is
a need to interact with information in a structured manner using the MIC systems.
4 BIBLIOGRAPHY

Books

1. Kotler, Philip Keller, Kevin Lane, 2006. Marketing Management 12th ed. Pearson
Education.

2. Turban, Leidner, McLean, Wetherbe, 2005, Information Technology for Management, 5th
Edition.

3. Laudon, laudon(2007),Essential of Management Information System, An Academic


Internet publisher, USA.

4. Jessup,Valacich(2003),Information System Today, Prentice Hall ,New Jersey, USA.

Articles:

Coley, Zephenia, 2009, Alternative Software Collaboration Tools (ASCTs), Systemic Logic.

Websites:

5. Infogineering. Understanding Information Overload.

Available from:
http://www.infogineering.net/understanding-information-overload.htm

6. Anon. What are Management Information Systems?

Available from:

http://www.scribd.com/doc/19697843/What-Are-Management-Information-Systems

7. Jonelle E, Morris. Management Information System. Honolulu. Atlantic State University

Available from:

http://aiu.edu/publications/student/english/Management-Information-System.html

8. Wikipedia. Management Information System.

Available from:

http://en.wikipedia.org/wiki/Management_information_system