An Assignment report on

The Implication of
Information in Business
Course: Management Information System ( )
By

ID No. Group members

Made
Mar
Getnet MUhabaw

Table of content

[Type text] Page 1

Title page

2 The Implication of Information in Business

 I. Introduction

The rise of information technology has paved the way for various innovations. With the
digitization of information, more and more businesses are increasingly leveraging the benefits of
digital tools to improve their prospects. Information technology has dramatically transformed the
lives of individuals. It provides businesses the scope to analyze data and plan business strategies
accordingly. Utilizing information technology means that the data analysis is accurate, thus
optimizing profits.

A management information system (MIS) is a computer system consisting of hardware and

software that serves as the backbone of an organization’s operations. An MIS is gathering data
from multiple online systems, analyzes the information, and reports data to aid in management
decision-making. (http://en.wikipedia.org/wiki/Managment information system).

MIS provides a valuable time-saving benefit to the workforce. Employees do not have to collect
data manually for filing and analysis. Instead, that information can be entered quickly and easily
into a computer program. As the amount of raw data grows too large for employees to analyze,
business analysts can build programs to access the data and information in response to queries by
management. With faster access to needed information, managers can make better decisions
about procedures, future directions, and developments by competitors, and make them more
quickly. In general, MIS can help businesses to enhance communication among employees,
reduce expenses related to labor-intensive manual activities, reduce product development and
marketing life cycles, increase their understanding of customers’ needs, engage in business
process reengineering, optimize their utilization of resources, identify and manage risks, make
strategic decisions and others. Even thou using IS in business arise some questions like security,
unfairness development because of wide gap of information technology between developed and
developing countries and others, using information technology in business became not the matter
of choice but also a must.

This assignment paper focuses on the some of the areas in the implication of information system
in business and how information system helps business development.

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 II. Impact of Information Technology (IT) on Increase profits and Reduce cost
i. Finding the target business group

By pulling together information, MIS can help identify ways to improve products and expand the
customer base. A proficient management information system will improve the processes of the
organization. When MIS does this, time and money previously spent in this area can now be
devoted to marketing activities, including promotions and studies to improve and test new and
current products or services.

By offering consumers new products and improving on products currently offered, a company is
provided a significant chance of improving their market share in the long run.
Since knowledge of the business and its customers and competitors is the key to an
organization’s continued health, companies must keep in mind the need for access to data about
every aspect of the business, its procedures, and the knowledge of its employees.

ii. IMS increase profit using E- commerce:-

“Electronic commerce commonly written as E-commerce is the trading in products or services

using computer networks, such as the internet. Electronic commerce draws on technologies such
as mobile commerce, electronic funds transfer, supply chain management, Internet marketing,
online transaction processing, inventory management systems, and automated data collection
systems. E-commerce businesses may employ some or all of the following:

 Online shopping websites for retail sales direct to consumer,

 Providing or participating in online marketplaces, which process third –party business-to-
consumer or consumer –to- consumer sales ,
 Business-to- business buying and selling,
 Gathering and using demographic data through Web contacts and social media,
 Business –to- business electronic data inter change,
 Marketing to prospective and established customers by E-Mail or fax(for example with
newsletters),
 Engaging in pre tail for launching new products and service.

(Wikipedia 2015, Introduction to E-commerce : combining business and information

Technology 1st edition 2016 martin kutz &bookboon.com)

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In general information system help business organizations and individuals to make any
transactions using ecommerce easily that will allow them to bay and sell their goods and services
in the world and earn more profit

iii. IS help to reach more target groups using advertizing system

Advertising belongs to the field of mass communication. It is about delivering messages, with
the aim of improving lives and increasing cultural competence, and is an applied social science
that can benefit the life of the general public. The purpose of advertising is to improve quality of
life and increase knowledge and facilitate cultural exchange. Advertising is an indirect tool for
convincing people. Its coverage is very broad, including fields such as business, public welfare,
and promotion. It attracts people’s attention through the elements of images and text.

Advertising not only aims to introduce new products to society, but also to portray life in an
active way. A successful advertisement is one that can achieve the goal of moving people. The
core of its design must be some element that can touch people’s hearts. Furthermore, what the
advertisement presents must be authentic. Only authenticity can lead to a sound reputation. Thus,
increasing the general public’s understanding of the essence of advertising can help to enhance
its meaning. (MATC Web of conferences 119,01022(2017).

Using a best type of advertizment at ontime and intime will allow business organizations to reach
variety peoples at at the same time. For example a musician who have a new album and use best
and different advertizing system can sell its album within a short period of time.

iv. MIS help in Cost reduction and in reveres increase profit

IS have a great value in the reduction of costs of product of goods and services through reducing
the prices of inputs, such as materials, time, labor, the price of transport cost, the price of
processing cost etc. The reduction should be through improvements in methods of production
from research work.

Information technology can reduce internal management costs.

According to agency theory, the firm is viewed as a “nexus of contracts” among self-interested
individuals rather than as a unified, profit-maximizing entity (Jensen and Meckling, 1976). A
principal (owner) employs “agents” (employees) to perform work on his or her behalf. However,

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agents need constant supervision and management otherwise, they will tend to pursue their own
interests rather than those of the owners. As firms grow in size and scope, agency costs or
coordination costs rise because owners must expend more and more effort supervising and
managing employees.

Information technology, by reducing the costs of acquiring and analyzing information, permits
organizations to reduce agency costs because it becomes easier for managers to oversee a greater
number of employees.

Reducing overall management costs, information technology enables firms to increase revenues
while shrinking the number of middle managers and clerical workers. Even though new
approaches for evaluating, organizing, and informing workers are required and not all companies
can make virtual work effective IMS can help minimizing cost.

Information technology helps companies organize in more flexible ways

IS increase companies ability to sense and respond to changes in the marketplace and to take
advantage of new opportunities. Information systems can give both large and small organizations
additional flexibility to overcome some of the limitations posed by their size.
Small organizations can use information systems to acquire some of the muscle and reach of
larger organizations. They can perform coordinating activities, such as processing bids or
keeping track of inventory, and many manufacturing tasks with very few managers, clerks, or
production workers.

The companies or any business organization must have to use best ways to reduce its cost. There
are some best characteristics of cost reduction:

 Obtaining a large quantity of production from the same facilities;

 Using materials of lower price and of different quality without, sacrificing the
quality of the finished product, i.e., reducing cost through the process of
substitution;
 Simplifying the process of manufacture without sacrificing the quality of the
finished product;

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  Changing features of the product suitably without sacrificing the quality of the
product etc.

Totally the reduction should not be at the cost of essential characteristics, such as quality of the
products or services rendered. Every plan of cost reduction proceeds with this assumption that
there is always scope for cost reduction (https://www.yourarticlelibrary.com/office-
management/cost-reduction-system/cost-reduction-meaning-techniques-and-advantages-
organisation/73952).

III. Impact of Information Technology (IT) on Working Remotely

The third world especially like our country most of the managers believe that if they can’t see the
workers physically sitting at their desk doing work then they are not getting done. But today the
world is coming together as one glob and any in formations will reach throughout the world with
in a if reaction of seconds. In this case any individuals who work in any government, private
organization or even its own job can perform their task in any place, home, coffee, recreation
area or other corner of the world. So that the idea of remote working came in to sound.

What does it mean Remote work?

Wikipedia defined remote working also called tele commuting, future of work telework, working
from home, mobile work, remote job, work from anywhere, and flexible workplace, is a work
arrangement in which employees do not commute or travel to central place of work, such as an
office building, warehouse or store (http://cen.m wikipedia.org wile telecommuting)

Encyclopedia also defined remote working “tele commuting is a practice in which an employee
works at a location often his or her home-that is remote form the actual business facility at which
he/she is employed. Under this arrangement the employee maintains close contact with co
workers and supervisors via various forms of computer, internet, and communication technology
(i.e electronic mail, telephone, computer networks etc.) (http//wwwencyclopedia.com/social-
science and low/economics-businesses and labor/telecommuting).

Remote working also defined working from elsewhere than in the employer’s premises. And the
managers and coworkers should have us modern technology to communicate like computer
mobile phones access to email account, internet video conferencing devices and other (milana
virtaneni 2020).

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From the above definitions we can understand that any government private or even self employer
can work any tasks or business from anywhere with the use of modern telecommunication
technologies therefore information technology become one of the area that implies on remote
working. With the fast growing rate (5.4%) of unemployment rate to day more than 470 minion
peoples are unemployed (ILo: 202o) some of the reasons for this are the increasing of
computation in the human labor market, the slowdown of total (world economy due to covid 19
pandemic, and in the developing countries lack of modern telecommunication infrastructure and
devices (ILO 2020). Due to these and other more peoples around the world become self
employed with help of modern information technology. Studies shows that in the spring 2020
covid 19 expand rapidly than expected at the time almost all countries closed governmental
organizations, private companies and even closed their territories.

Even though the idea of remote working was started in the 1990s’developed more with the
development of modern telecommunication devices, in land, water and even flights. But tanks to
modern information technologies, governments allow their employees and private companies to
work at home and let them to give service and goods to their customers, by doing so try to
minimize the crisis as much as they can. For example our university college(gage university
college) due to restriction of giving face to face education by government, begun to provide its
education through e-learning portal and telegram cannels and continue to achieve its objective
and the same thing also applied all universities in our country. Government organizations like
Ethiopian customs and Revenue, banking institutions also allow their workers to work at home
through computer, internet, web page, portals etc

Generally by using information system technology any one can bring its job at home or
everywhere. When we talk about remote working the main question arise is how information
technology help to work remotely? And what advantages have working remotely?

1. Work motivation.

Employers work motivation is affected either by intrinsic (individual behavior) or extrinsic

(external factors such as working environment rewards given, culture etc) (mil ana vitara 2020).
Therefore remote working helps the employee to minimize external environment challenge and
let them to focus on their work any were they are.

2. Flexibility in the scheduling of working hours &working place

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One of the most important things remotely is the ability workers to have some control over to use
their working hours. If the company or organization let their workers to work remotely with
bounded time (example 8 hours) in a day, the employee have the right to adjust the working time
(teodora lazarova:2020). The survey by American time in 2011 sited by teodora lazarova, shows
that, 49 percent of remote workers in America had flexible working hours that allowed them to
change the time they began and needed work (Teodora lazarova 2020).

Remote working also allows works to have flexible working place. Some jobs that previously
need face to face employee physical presence like teaching, lecturers, administers , salesman etc.
nowadays with the help of modern technologies doesn’t need their presence physically rather
they can work anywhere or place to their customers by email, face book, whatsup, video
conference like zoom, ecommerce, e-learning etc.

3. Cost benefit.

By using modem technology and working remotely the employees as well as the companies and
organizations can minimize their cost. Studies cited by teodora lazarona shows organizations and
companies enabled most of their employees work remotely can reduce the company expense
with about 40-50% that will be paid for office rent, electricity, water supply, buying and
maintain office material etc (teodora lazarova ፡ 2020). Not only the organizations benefited from
working remotely but also the employee by working at home, they can reduce transport coast and
other coasts in reverse increase their income by using their time efficiently for over time.

IV. Impact of Information Technology (IT) on Human Resource

Management (HRM):

The IT industry spans broadcast, electronics and print media, computers, human resources
management, telecommunications and e-commerce activities. information technology in HRM
has grown considerably in recent years and there are now extensive applications across a wide
range of HRM activities.

Organizations that use technologies for HR field such as employee participation, clearly defined
jobs and extensive formal training. On the other hand, according to survey, companies which are
using external IT capability, only internal career opportunities used IT tools. In nowadays top
leaders fully realize the power of information technology (IT) tools for reaching business targets.

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The utilization of IT tools help not only to fulfill defined company’s goals but to optimize the
work processes as well. Trends and results of the contemporary studies constantly confirm
contribution of the IT tools in Human Resources (HR) area i.e. to accomplish assigned HR tasks
by using the source of IT capabilities. (http://www.ripublication.com)

The crucial factors for effective implementation and accomplishment of HR with IT usage, first
it must be defined which IT tools fulfill described HR demands. Secondly, HR managers state
that main advantages of using HR IT tools are time saving, work efficiency, keeping employees
fully informed.

This in turn has help human resource managers (HRM) professionals to play a strategic role in
attaining improved competitive advantage. This interaction and intersection between IT and
HRM leads to the emergence of HRMS a term used to describe the systems and processes at the
intersection between human resource management (HRM) and information technology (IT). It
merges all HRM activities and processes with the information technology field while the
programming of data processing systems evolved into standardized routines and packages of
enterprise resource planning software.

HRM is internal application of e-business techniques to add value to the management through
more effective and efficient information flow and is a way of doing HRM. As information
technology improves, organizations especially banks, could manage an increasing number of
HRM processes in an effective manner, there by contributing to the availability of information
and knowledge. Information technology (IT) has become an indispensable part of contemporary
world while human resource management globally has equally being affected in a number of
ways through its adoption and application. Despite the considerable growth in the use of
information technology in human resource management (HRM), the level of impact is still
under-researched.

Information technology has enhanced the ability of human resource managers to produce reliable
data via a human resource management system; this in turn allows human resource professionals
to make data-driven decisions and to provide other managers with consultancy based upon this
data. Finally, with regard to the human resource management role, it is apparent that human
resource managers may be able to adopt a more advisory or strategic role due to the increased
availability of reliable human resource management data. Human Resource Management

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System is any system that helps an organization to acquire, store, manipulate, analyze, retrieve
and distribute information about an organization’s human resource

The role of IT Human Resources Development

Career planning tool is a generic, learning, knowledge-based system that helps top leaders to
manage the personal development and path career of employees. One of the most important
online supports within Human Resources is tracking the Human Resources Development Core
Processes. The implementation of current liberalization measures - and those that may be agreed
in the future - creates both opportunities and challenges for the business community.

Some of the area IS role in human resource includes,

 provide better services to line managers.

 serve as a pipeline connecting a personal policy and personal processes in all
organization and thus facilitate personal management in the company,
 provide important data for a strategic personal decision-making and enable a quick
acquiring and analysis of information for HR assistants,
 reduce cost labors at performance of personal activities.

To keep high performance culture, company should maintain a continuous improvement of core
processes and activities. The tool which supports Idea Management processes should provide
how many improvement proposals are submitted by the employees. It can also provide the
information of saved revenues and costs by implementation of improvement proposals. The main
purpose of online support in Idea management is to build a tool which gives the opportunity to
all employees to present their applicable and well-founded ideas on the one hand and on the
other hand company becomes more competitive. The above mentioned IT support carries the
advantages as follows:

 Save money,
 Avoid costs or
 Improve process performance.

The information technology to human resource management activities is usually driven by

potential improvements such as in the speed and efficiency of processes, cost savings, enhanced
customer satisfaction, increased accuracy of data, improved transparency and consistency of

11 The Implication of Information in Business

processes, increased availability of information and the facilitation of a change in the role of
human resource managers. (http://www.iiste.org)

The survey confirms that companies use HR IT tools and should contain all HR processes which
will sustain all parts of HR it means from ”Recruit to Retire” functions within the company.

The ways to use IT in HR

First of all implementation HR IT tools requires to perform analysis which provides information
about benefit of IT usage. Also during the implementation, attention must be paid to the
protection of sensitive data about employees. If the tools are implemented on higher level, it can
bring cost saving for the company, reduce process time, quality of work and finally the major
benefit is the contribution to the strategic development of the company. It is essential that the
tools are user friendly for all employees, provides data and reports necessary for the employees´
jobs. Next point which has to be taken into consideration is that implementation of HR – IT tools
can increase the costs e.g. purchase of the facilities, i.e. companies have to be aware of it during
preparation of budget. Nevertheless, HR IT tools must help all employees because incorrect
implementation may bring negative consequences e.g. the employees may understand the usage
of tools as an inevitable evil which does bring any effect neither them nor the company.

V. Impact of Information Technology (IT) on Business Process Automation

reengineering

Information technology helps in developing automated processes for businesses. This not only
helps in reducing the cost of operation but also saves time. The time saved can be utilized to
focus on other tasks, thus speeding up business processes significantly.

Processes like billing, tracking metrics, collecting customer data, monitoring certain processes
etc. can be automated easily. There are numerous automation software that can be utilized for
this purpose

In a best case scenario ICT resources automate business process which have been reengineered
and unnecessary activates eliminated. The remaining value adding process are restructured
where multi layered controls are collapsed to leave a few essential ones for instance rank.

1.1 process reengineering

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though process reengineering is a painful process given its tendency to result in job losses it is a
path organization that desire cost-efficient service delivery needs to task Business Process
Reengineering (BPR) enables an organization to collapse they many layer into fewer cost –
effective levels that are easy to automate effectively.

1.2 process automation

An increasing the scope of automation has the knock on effect of eliminating intermediate data
entry tasks between process reducing the numbers of the process tasks process duration and the
manpower involved embracing paperless office and advanced messaging systems will reduce the
numbers of secretaries eliminate the needs for office assistance .

Some of the areas business process automation used

1. Employee on boarding
Although hiring employees may seem like a fuss-free process, it involves multiple tasks. Filling
out employee information forms, setting up induction sessions, arranging training sessions,
setting up bank accounts, collecting relevant documents, and assigning mentors are just a few of
the activities involved.

Without automation, the entire process can become quite chaotic and result in:

 Endless paperwork
 Missing out on some tasks
 Employee dissatisfaction
 Low productivity

Applying business process automation to employee on boarding will ensure smooth transitions
from one task to the next, keeping relevant employees in the loop and providing visibility into
the status of the process.

2. Purchase orders
Purchase order requests are recurring processes in most organizations. The requesting team fills
out a form and sends it to the purchasing team. The approving authority then examines the
request and rejects the request in case information is inadequate or if there are budgetary

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constraints. It is then sent back to the requesting team. If approved, a purchase order is created
and copies are sent to the supplier as well as the inventory team.

Without automation, the following issues could crop up:

 Delayed PO approval
 Impacted productivity
 Incomplete records
 Errors in the PO
 Errors while taking delivery of the supplies

Business process automation can help improve accountability, transparency, and enable accurate
data recording, which can be accessed by relevant stakeholders when necessary. It will also
retain all process-related communication within the workflow to make execution easier and
faster.

3. Stepping stone to digital transformation

Digital transformation can seem like a lofty overwhelming goal to organizations that aren’t on
that path. Business process automation can be a stepping-stone to adopting that culture of
continuous transformation. Such as:

 Get more clarity

Automation demands a certain amount of clarity about the process right at the designing stage. If
you don’t know the tasks involved and the people responsible for running the process, you can’t
design and automate the workflow effectively.

Further, process mapping can provide clarity to all employees and serve as a training resource as
well. The insights you gain from analyzing an automated process can clearly show you the gap
between your process as is and as it should ideally be.

 Streamline processes
One of the great outcomes of a process automation system is streamlined processes. Clear
accountability, customizable notifications, valuable insights, and faster turnaround times make it
easier to eliminate wasteful activities and focus on enhancing tasks that add value.

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  Get compliance records
With business process automation, every detail of a particular process is recorded. This
information can be presented to demonstrate compliance during audits.

 Standardize operations
When we automate a business process, you can expect a consistent standard of outcomes every
time. Standardization helps position your organization as reliable, which in turn can help
increase your customer base.

 Increase customer satisfaction

Customer satisfaction is a key differentiator in any industry. Focusing on process and operational
excellence helps you exceed customer expectations with ease. When you consistently meet
promised standards, customers are more likely to develop a preference for your company.

What business processes should we automate?

Business process automation is not restricted to a handful of functions. Some factors that can
indicate the need for automation include

1. High-volume of tasks
2. Multiple people required to execute tasks
3. Time-sensitive nature
4. Significant impact on other processes and systems
5. Need for compliance and audit trails

Automated processes in all organizations include

 Email and push notifications

 Helpdesk support
 Creating customer case studies
 Data aggregation and migration
 Backup and restoration
 Employee leave requests
 Procurement
 Call canter processes

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  Sales orders
 Time and attendance tracking
 Payroll
 Invoicing
 Collections
 Product launches

Benefits of using business process automation tools

Once an organization have automated its business processes, can achieve multiple benefits. Fore
example:

1. It can boost in productivity brought about by enhanced access. Tools store data in a central
data base. This help the organization to access data from any location or device whenever it
needed.
2. The organization business process will become much more transparent. Managers can track
and monitor process while they are running, which can improve accountability and visibility.
3. The ability to monitor processes on the go will also help to keep a lookout for errors, fixing
them as they occur. Performance reports will arm with insights, so they can take preventive
measures against recurring errors.
4. It will also help a managers to enhance its workforce allocation since the application will
handle all mundane recurring tasks so they can redirect your employees into tasks that
necessitate human effort and judgment.

A business process automation system will ultimately enable growing business efficiency. Since
it is based on the notion of continues process improvement continuous, efficiency levels will
keep increasing in response

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