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INFORMATIONAL SYSTEM: DANGERS, ADVANTAGES AND BENEFITS

mr Ljiljana Pecić, dipl.ing.maš, ljpecic72@gmail.com, +381606791485 IHP Prva petoletka Trstenik u restrukturiranju Abstract: Business enterprises and other types of organizations and individuals in modern society, depend on informational systems: for managing their operations and activities, for maintaining competence on the market, for managing different service offers, and also for improving competence and capacities. Information and knowledge are vital economic resource nowadays. There are companies which have drastically improved their performances with IT introduction, and on the other hand, there are some companies which spent millions for new technologies, and without results. This fact leads to conclusion that purchase of new technologies cannot be guarantee for success, it is necessary to analyze the problem very seriously, with participation and support of top-management. If there is no complete support of top-management for this project, and if it is not a part of strategic business plan, do not expect any significant results. Informational System Introduction will probably be the biggest project and process for the company, and for company's management IT introduction main dilemma is: improvement and glory or resignation. Key words: informational system, top-management, performances 1. INTRODUCTION

We can be engineers, economists, lawyers, biologists, pharmacists, doctors… But, being informed at the right time, on the right place, in the exact way is most significant, and it is nowadays clear to everybody. Every businessman's wish is to have system for quick reply to inquiries. For example, modern corporations depend on computer informational systems, that are necessary for operating their financial and business transactions, management of human resources; city councils also depend on informational systems - they cannot provide citizens with basic services in effective and transparent way; some individuals use informational systems to improve their knowledge, for shopping, for bank accounts and transactions, as well as for different financial operations. Since informational systems have provided different human activities, and as a result - greatly affected the society and changed the lifestyle itself. Important fact is that modern business and technologies are so much connected, that it would be impossible to manage any modern company without informational technology, or in business words: investment in informational technology is the project which changes your business. 2. LITERATURE REVIEW

An example for successfully implemented IS is definitely DELL company. Here are some facts about this company: Dell manages one of the biggest commercial internet pages in the world, each day Dell sells computers in amount of 40 million dollars on their pages. Main characteristic of this internet page is Premier Page programme, which serves 40 largest companies, government and education customers all around the world. Namely, every bigger company, which becomes customer, gets its own Premier Page page. Premier Page has some smaller pages, which are often connected with customer's internet. Every day, 30 millions of Dell's contents are ordered this way. Each customer follows his order from company to his premises. Considering that Dell's suppliers have access to data about running orders, they can accord their own manufacture and delivery. In this way, suppliers immediately know about the changes in requests. Internet and unique marketing approach have in this case shown as an excellent combination. [4] Also, the case of company Cisco System is interesting. This company has business system on the internet, customers order goods via internet, and suppliers know what materials and what parts should be delivered to the company, because they are present in Cisco's dynamic ordering software. About 98% of orders go immediately, which is also time saving both for Cisco and the customer. Many problems clients solve by themselves, on the internet, because great deal of support is available on the internet, while engineers solve only bigger problems. Using this service, about 80% of inquiries is being solved. [4] Cisco's technical support productivity is in this way increased 200-300 times, and money saved is 125 million dollars for technical support staff. Downloading software directly from Cisco's page, about 180 million dollars is saved per year for distribution costs, packing and copying. Placing catalogue with prices and products to company page, another 50 million dollars is being saved. Also, every year 37 million dollars is saved by servicing employees. For example, only two persons work on following and booking documents related to travelling expenses of 17.000 employees. Total Cisco's money saved per year, by placing internet application, is 680 million dollars. Company Tenneco has also made some changes, and the results are significant. Data are standardized, common databases are formed, for coordinated market planning, equal resource distribution, united purchase of raw materials, optimal processing. During implementation process, cooperative acting between employees is encouraged, they improved employment by well informing,

numbers. improved flow of documentation. for creating virtual production capacities. SajtReflect. Following and rewarding individual contribution is connected. [ 1] 3. managing customer's stocks in order to anticipate market changes. 3. improved resource following and planning. customers and products are also followed. and unfortunately. made powerful business processes available • all kinds of data . managing raw materials. packing. It often happens that top-management of powerful companies is surprised: • • • • • experienced managing personnel is engaged experienced consultants are employed team for transitional period is formed strategic plan is created big amount of money is invested and there are no results.com invites customers to choose form. value evaluation for marketing campaigns However. improved process connection. because what they hear is story about improvement in the following areas: • disappointments and losses caused by bad communication between company and their partners are eliminated • discord between customer's needs and development of reliable and lucrative products is reduced • speed for raw material delivery and speed to produce finished parts can be increased • receiving data. so executive managers can be in closer contact with their clients • employees can have more independence when they do their jobs On the other hand. to introduce new business processes. They invested 100 million dollars in ERP. Companies apply these kind of projects for many reasons: to improve business processes inside the company. to create new ways of doing business between companies. taking orders. Because of bad training of the employees. situation was bad on the field.1 Expectations Expectations from Informational System Introduction are huge.[ 3] Company Procter&Gamble has also made a change by implementing IS in purchase and distribution chain. New system was designed to automatize and modernize almost all Heshey's business processes. As a consequence there are: • Lower expenses • Market expansion . to improve business process between facilities of the big company. sound. which becomes faster and more reliable with modern networks. in order to make decisions for the prices. and package is sent directly. that provide great amount of data by very accessible prices • standard hardware and software platforms. We cannot criticize these expectations.keeping and improving employees . they could not manage to deliver candies to customers on time. which are part of the purchase chain of some industry. saved. percentage of successfully implemented is around 40%. and the result was loss before Halloween and fall of 30% on stockmarket. RESEARCH RESULTS ANALYSIS 3. truck loading. expertise systematization and sharing the knowledge can greatly improve business process and customer's services • organizational bonds are cancelled. booking accounts for orders. drawings. Cooperation is realized with suppliers. well-known candy company . advantages mentioned in this context are: improved informational system. operated and exchanged between computers. together with business data standards. photos. and their exchange in the enterprise resources standard (ERP).today can be digitalized. video . text.2 IDENTIFIED PROBLEMS THROUGH THE RESEARCH By summing up results of business improvement. informational technologies provide: • global communication possibility.[2] An example of obviously bad implementation has been made by company Heshey Foods. New contents should have supported after manufacture: forming prices. manufacture planning. delivery schedule.

Needed way of changes d. and the most ambicious and intelligent employees are most likely finding better opportunities in other companies. Company's heritage b. they are physically and mentally exhausted. Resistance to changes is growing and instead of making changes A. and in this way they avoid high money investments. where and how will the organization change . all reasons can be sorted in four basic groups: a. ways to approve investments . biggest obstacle for company changes is non-existance of any description of company's future.• Deep and wide economy expansion Logigal question is brought up:Why there are no projects like this anymore? Namely. resources and company's energy. Regarding current business conditions. In companies like these it is hard to approve spending millions of dinars for management expenses for IT structure. innovative and organizational processes are avoided.vision that could start imagination. and that causes additional logistics costs • Time zones and cultural differences are also disturbing factor • Organizational structures. It is naïve to hope that only investments in chosen technology will lead to strategic business change. Current business conditions c. IS investments are small and local. Failure can arise from mistakes in management policy. and to expect that business processes will merely adjust to new infrastructure. will make the change in partnership. In the end. Changes within company. This problem often manifests when there is no strong changes-protector in the company. responsibility. delivery schedule. or when there is no strategic plan with clear specifications of resource schedule.are the biggest problem • Diferrent existing hardware and software solutions are affecting changes immensely. when other business structures are aiming to spend much smaller amounts of money. it seems logical to wait and check how things are going. politicians or some satisfied buyer(supplier). etc. Non-existance of the goal Company's heritage is the factor which mostly affects business of the most successful companies. these activities exceed all business made before. and suppliers of earlier software and hardware solutions can also cause problems. what. In these companies employees are burdened with increased productivity programme. also salaries will have to be changed. and they disable conversation about radical changes. time and emotional energy. A team of sharp and energic managers who can think about possible company's future and making company changes must be created. New employees are needed. with many various applications.P. strategic planning process. which could be used to explain why. in order to create new business models. way to approve investments and defined ways of successful evaluation. Technological old-fashion is the highest risk. companies that need radical changes. In these conditions.S. Globally. Sometimes even best iniciatives of these groups fail because: • management's attention and support is lacking • management's orders are often inappropriate attempt to enter the field they don't know • not realizing reasons for investment • decisions of various interest groups. with significant advantages for their company. all these stated obstacles are mostly not of technological nature. Principally. Regarding that these changes are huge. the situation is the following: • Almost 1/3 of projects is finished before anticipated time • Only 1/10 reaches its main goal • Evaluate violation and activities schedule is around 100% • Expected effects are around 50% from expected • Paret's rule is reliable in this case: 80:20 Also. are usually having organizational stress and financial pressure.A. Being afraid to change what is well-functioning. This group should be challenged to ''think beyond usual limits'' and ''to break existing rules'' if necessary. . This situation is especially present in companies ruled by governments. and investments are necessary in this segment as well. analized results show: • The wider the company. because there is always pride for the trademark and brand. it is hard to create positive mood inside company for high risk projects and long lasting. unions. business goals. communication between people is slower. Dramatically improved company's business demands equal dramatic business process and management changes. management policies.

we concluded that two deciding factors: development strategy and topmanagement support. Getting opinions has to be a process. It is necessary to diagnose strong reasons for change. 4. Striving to change the culture by force is not characteristic of business manager.For success. In this case we have some important elements. management should be stronglly involved. what products and services will we offer. or team outside the company.meaningful plan with business goals and realistic evaluation of starting point • Strategy with clearly defined achievement evaluation and responsibility distribution • Changes in organizational and management structure. Managementt should make this decision and it is suggested that the engaged team is created from people of different company facilities. how will we differentiate our products and services from competitors. In defining strategy. these people should be real experts. dedicated to work. financial organization status. After this it has to consider status quo and strategic alternatives. general manager has to respond to main question: where and how will we compete? And that means answering to some important questions: which are business opportunities that our company will follow. strategy defining phase. dynamic but stable persons. resistance is going to be on the smallest level. by re-shaping organizational structure. it is necessary to have: • Clear aim . From that aspect. they cannot take over control of necessary changes. management should try to hear as much opinions as it is possible. First step is to diagnose existing business status and needs.2 MANAGEMENT AND DEFINING STRATEGY PHASE Defining strategy phase leans on knowledge acquired during diagnostics phase. which has two basic components: • basic values • conviction of employees. 4. You must insist to bring strategy. Strategy must hit sensitive balance between desirable and possible. THERE IS NO JUSTIFICATION FOR NOT BRINGING! In this phase. and also strategy to achieve this goal. The third important segment are available resources. market position. as well as investments in new company's abilities and skills of employees • Providing resources and management reliability. organization must prepare all the necessary activities that will take place during process of passing from one business structure to another. or mixture of these two options. It can be realized as passing from one business structure to another. preparing phase and performing phase. Also. as well as these two. As long as executive management does not decide which business strategy they will follow. it is important to ensure that management understand importance of organizationa culturel. processes and infrastructure. and which are necessary. what is the environment like. This can be treated as transition management. Status recording takes time which is by all means measured in months and done by expert team. To define strategy.If people are involved in making stratgy. In this phase strategy and vision for the change is defined. engaged as consulting house. in order to take courage to do sth. of diferrent competencies. organizational changes approach and investment in IT has to be considered through their influence to: environment. In this context we suggest model with four phases: diagnostics phase. what is our goal regarding other companies and geographic markets. what is our company doing better than any other competitor. Recording can be done by company's expert team. It must answer to questions: why do we want to make a change. what are competitive and legal threats. and group of authorities. are necessary to create minimum conditions for process realization. management process. so business strategy has to be the same as the beliefs of people who carry it out. In all these phases. MANAGEMENT ROLE IN THE IMPLEMENTATION PROCESS By analyzing many practice examples. On that way. what can our company do better than competitors to survive on the market. (Which strategic activities are desirable. . strategy. which is necessary process change degree and what can actually be done). 4.1 MANAGEMENT AND DIAGNOSTICS PHASE Diagnostics phase includes environment evaluation. they would be devoted to them. Changes of basic values and convictions of employees can be carried out in a long-term period.

stronger support is reached and presenting results should be continued. As additional effect. IT programme schedule depends on priority schedule. project progress. • resistance to common practice • objections of regional managers because of operational difficulties and new ways of booking data. They should pass the education of the company engaged to introduce implementation. in accordance with stated and established criteria for evaluating solution (experience from companies of similar size and manufacturing programme should be used). where is each modul taking place…) With implementation beginning. Important segment of this preparing phase is preparing for new IT structure which includes: range and amount of financial investment. which means: decision to engage experts from outside. modul schedule from starting point.Plan for needed investments has to be adopted. We suggest engagement of the outside company to estimate the situation. After identifying weaknesses. given resources. Training must be adequate and should last 3 to 4 months. and from each company 15 sharp. as well as detailed time schedule for these programs. to assure that the rest of the team misses nothing. which are visited by executive manager if . 4. Some of them are: • local habits. energetic. 4. problems are appearing. some more important decisions have to be made: • choice of unique ERP for the complete system. It is very important to choose good team for implementation. • choice of modul that will be used • shaping and making corporative intranet • establishing standards for table computers in the whole company depending on working place needs. as well as meetings on local level. We suggest choice of combination. management board meetings are always organized. By presenting facts exactly. with help of own staff. starting from common data definition. Objections are solved through organizing project activities designed to give answers and remarks immediately after performance. After this. or mixed structure. program ''management education'' is probably needed and also ''business infrastructure improvement''. For some plan to succeed. By carrying out detailed analysis in diagnostics phase.4 MANAGEMENT AND PERFORMING CHANGES Before realization. seminars create new team spirit and optimism. in order to keep the same intesity of support. company's management must understand and like the plan. hard-working employees should be delegated. and also to choose experienced leader because of the segment's importance. government regulatives and market demands. and also the programs which will define development plan for the following period. if there are failures in skills and management. it is necessary to organize seminars to increase expert level and knowledge from the following areas: • Informational systems • Accounting management • Process re-engineering • Team spirit development • TQM • Operational execution • Strategic plan • Industrial marketing • Increase of working efficiency Top management should visit these seminars individually. performing plan should be checked again (time.3 MANAGEMENT AND PREPARING PHASE In preparing phase it is necessary to prepare for the new organizational infrastructure.

Issue 1. Issue 1140. 3. Forcht. Procter&Gamble gives a birth to a WEB baby.necessary. but results were diferrent. Fall 2000.Electronic Buzers' News.. people should even be told to find some more appropriate job if they do not want to accept changes.. but consultants should be engaged where there is time. Each company started these projects expecting the best possible results. In this way. After analyzing international and domestic experiences in IT implementation. CONCLUSION Investments in ERP are probably the biggest. One of the main problems of manager practice is that management must become educeted in the field of: managing projects. the conclusion is: • • • • it is always easier to criticize for some days or months. It enables detailed financial calculations. It is necessary to follow installing moduls one by one. Transition and re-engineering goals must be clearly defined. Mičigen. Poslovna škola Univerziteta u Mičigenu. Vol 41. It is important to have fasibility plan. M. Busing. Detailed state recording enables viewing weaknesses and brings decisions how to exceed them. Journal of Computer Informational System. Weekly revisions of projects are desirable. and introduction plan should be followed by detailed plan of necessary resources and comparison with other possible solutions. Himelstein. 12/21/98. and for insurance you must provide support from general manager... ISSN 0164-6362 .Passino. Galusyka. Shanmagan. managing risks.. Management board meetings should be organized always. Trommer. D. necessary finances.. If there are some big changes. K. most expensive and potentially most dangerous resource investments in company's history. J. These resistances will be out of: fear of new. D. 5. for example: deadlines.. so that all team members affected by the project can express their interests. For the success of complete implementation process. L. it must be invested in IT sector personnel (they are overloaded. P. it is necessary to do project revision with defining new deadlines. What you must count on in this project is resistance inside the organization. Standard ERP model should be chosen. . Inc. 4. than make the right decision unpredictable things often do happen. it is followed whether jobs are done by the development plan. and possible changes require intervention. Severance. manager competence deficit must be removed. Issue 3648. R. you should not enter the project. where silent resistance is greater danger than public. as well as needs in other resources. Business Week.2002 2. • • LITERATURE: 1. for example on Fridays. because they also do running jobs and preparing or doing new jobs. SAP R/3: A Reengineering toolat Tenneco.. conflict with tradition and habits. so new salary system should be introduced). Existing resources should be used maximally.. Transformation of the business into a multimilion. which can be installed easily. new requests.dollar company. scientific and financial basis. Also. 09/27/99. Implementation must not be accelerated for the cause of quality. Without this obvious support. And they will be very dangerous. implementation range. than not unpredictable factors result in making decisions that nobody wanted some decisions understand only those who were directly involved in the process for company's management IS introduction is main dilemma: improvement and glory or resignation IS introduction is process. because of various personal interests and interests of the interest groups. Objections should be solved in an adequate way. managing people. IT u primeni.