ROLE OF IT IN BUSINESS DECISION-MAKING

8/3/2017
 Management Information System (MIS)
Course Code: K302

Assignment On:
ROLE OF IT IN BUSINESS DECISION-MAKING

Submitted To:
Mohammad Anisur Rahman
Assistant Professor
Department of Management Information System (MIS)

Submitted By:
Tasviha Taher Trishila
Batch: 23rd
Section: B
Roll: RH-117

Date of Submission:
August 3, 2017
Contents
List of Figures ................................................................................................................................................. i
List of Tables ................................................................................................................................................. i
Introduction .................................................................................................................................................. 2
Decision-Making in context of Primary Managerial Functions: .................................................................... 3
Planning .................................................................................................................................................... 3
Organizing ................................................................................................................................................. 3
Directing .................................................................................................................................................... 3
Controlling................................................................................................................................................. 3
Feedback ................................................................................................................................................... 4
Decision Making in context of Business Operations: .................................................................................... 4
Hiring and Staffing .................................................................................................................................... 4
Customer Relationship Management ....................................................................................................... 4
Data Management .................................................................................................................................... 4
Inventory Management ............................................................................................................................ 4
Collaboration and Work Group Support ................................................................................................... 4
Future of IT in Business ................................................................................................................................. 5
The Negative impact of IT in Business .......................................................................................................... 5
Conclusion ..................................................................................................................................................... 6
Bibliography .................................................................................................................................................. 6

List of Figures
Figure 1: IT personnel across Different Business Levels ............................................................................... 2
Figure 2: Digitization Guide........................................................................................................................... 5

List of Tables
Table 1: Data Security Issues ........................................................................................................................ 6

i
Introduction
With every passing year, IT is playing an increasingly prominent role in decisions regarding
almost every aspect of our daily life. A vast number of business operations are now unthinkable
without the aid of information technology. A managers primary goal is to take decisions, and to
make good decisions, information is necessary. The system based information system which
provides them with this information is called Management Information System(MIS). MIS is
essential in providing managers with timely and accurate information, which is necessary to not
only thrive, but also to survive in today's competitive business scenario.

Figure 1: IT personnel across Different Business Levels

The importance of IT in decision-making across various important business functions is

discussed as follows.

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Decision-Making in context of Primary Managerial Functions:

Planning
With the advances in IT, communication has been facilitated, so that managers can quickly be
notified of any issues and necessary changes. Managers have access to a vast amount of data
from both internal and external networks of an organization, and available software makes it
possible for speedy analysis of the data, which helps managers with both their short-term and
long term planning. A decision support system(DSS) makes it possible to create information
through online analytical process(OLAP) that would otherwise have required significant effort
and analysis. Executive Information System(EIS) allows managers to view a scenario from
different angles, and thus identify and address problems and opportunities. (Ramey, 2014)

Organizing
After coming up with proper strategies and goals, it is necessary to allocate the resources
accordingly. Information systems now have built-in features which allows managers to run
different scenarios resulting from a decision. It is possible for the managers to change a variable
such as changes in staff levels, and see the impact it has on the company's revenue and profit.
Information system also makes it possible to create a time-series analysis of various business
aspects, enabling managers to spot any existing patterns. It is further possible to make
projections based on the past data, to get an idea of how a certain product or project might
perform in the future, and thus allow managers to assign tasks accordingly. (Markgraf, 2017)

Directing
The employees need to be sufficiently directed and motivated in order to complete their tasks as
efficiently as possible. The managers are be able to maintain better contact with their employees,
and can more easily be reached in when guidance or instructions are needed due to the increased
connectivity which IT has brought in business. IT also allows more elasticity, so that employees
can now receive instructions and work from home. Training initiatives and professional
development opportunities can also help managers to lead and motivate their employees better.
(123HelpMe.com, 2017)

Controlling
It is necessary to monitor the business operations from time to time, in order to ensure that
everything is proceeding as it should be. IT makes it possible to keep a closer watch on the day-
to-day activities of the business, and allows for prompt discovery of any errors. The managers
are thus able to deal with those issues more efficiently and speedily. An increasing number of
business processes are fully automated, with specialized software which runs the entire process
and also has fail-checks in place which are more rigorous than manual ones.
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Feedback
After implementation of a process or project, it is necessary to get feedback from time-to-time
in order to gauge their effectiveness and to help managers decide if any changes need to be
made in either short or long term goals and strategies. (Brian, 2017)

Decision Making in context of Business Operations:

Hiring and Staffing

Before the Internet, potential employees had to rely on printed publications like newspaper
adds to know about job offers. Now it is possible to search for jobs from the comfort of their
homes. Employee training can be performed more efficiently by means of virtual classrooms
and computerized testing systems. IT eliminated the need for storing vast amounts of
paperwork as necessary information can be printed on demand. Various software also makes it
possible to ensure that employees are meeting performance standards. (Lewis, 2017)

Customer Relationship Management

IT makes it possible to connect with millions of current and potential customers in real time.
The role of effective communication in understanding customer demands, problems and their
solutions, is a critical one. Organizations use customer relationship management systems(CRM)
to store important data about the customers to respond promptly to their inquiries, and to get
a better idea about customer behaviors and future demands. (Butt, 2015)

Data Management
Organizations now make use of database software to store all relevant information in a
database. The database can either be an internal or an external one, with the external one
making it possible for employees to access the information remotely using a valid IP and
password. (Ramey, 2014)

Inventory Management
The company needs to keep track of the inventory levels so that they have enough to meet
their demands but do not overstock. An inventory management system connected to a point-
of-sale(POS) system allows the inventory to be updated in real-time, forming a closed
information loop between all departments. (MacKechnie, 2017)

Collaboration and Work Group Support

IT makes it easier for the employees to collaborate and consult with each other as data can
easily be accessed, no matter wherever they are by means of email and social networking sites,
as well as common company databases. (Linton, 2017) Group Support Systems(GSS) and
communication systems(CMCS) provide support for both spontaneous and planned meetings.
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Future of IT in Business
Figure 2: Digitization Guide

As can be seen in Figure 2, in order to successfully integrate IT in the decision making process
and derive gains from it, it is necessary to make an effort both at an individual and managerial
level. The future is set to introduce more sophisticated software and simulations in the business
world, thus ideally leading to greater efficiency in decision making and increased
competitiveness. Companies are expected to direct greater focus towards developing an IT
infrastructure. As the business world becomes increasingly globalized, IT would become
necessary not just for success, but for a company's very survival. The social network will be the
value-driver, as businesses turn to them in order to reach existing and new customers . Some
businesses are completely ditching brick and mortar stores and solely doing business online.

The Negative impact of IT in Business

The increased use of IT may make managers very reliant on the use of software to help them
plan and support their decision making. In cases of data or power failure, they might be
unprepared to face a situation. There is also a possibility of managers being led to think that they
are being overshadowed by the computers, and that their creativity and opinions are being
devalued. This is a gross misconception, as the managers need to use their own interpretation and
creativity in combination with the highly rational information provided by IT to make decisions.
The privacy concerns with such large volumes of data being transferred is quite significant. Even
though plenty of software and precautions have been taken to dealt with the issue, till date
information leakage remains one of the biggest threat faced by a company.(Table1). The health
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concerns related to increased usage of electronic gadgets which are necessary for IT, is also a
factor that needs to be taken into account.

Table 1: Data Security Issues

Conclusion
Innovation and long-term business success are both becoming reliant on the developments in IT.
IT solutions are bring improvements in productivity, efficiency and effectiveness of business
process. The IT strategy that is used should be flexible in order to deal with the dynamic market
forces. However, without investment in proper complementary assets such as trained IT
professionals, sophisticated gadgets etc and a proper business strategy, it would not be possible
to derive the benefits of IT implementation. The IT strategy that is used should be flexible in
order to deal with the dynamic market forces.

Bibliography
123HelpMe.com. (2017, August 2). Technology And Management Functions. Retrieved August 2, 2017,
from 123HelpMe.com: http://www.123helpme.com/technology-and-management-functions-
view.asp?id=159572123HelpMe.com123HelpMe.com
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Brian, G. (2017, August 2). The Decision-Making Process in an Organization. Retrieved August 2, 2017,
from Chron: http://smallbusiness.chron.com/decisionmaking-process-organization-21532.html

Butt, A. A. (2015, May 14). The Role of Information Technology in Business Success. Retrieved August 2,
2017, from LinkedIn: https://www.linkedin.com/pulse/role-information-technology-business-success-
abid-afzal-butt

Lewis, J. (2017, August 2). How Does Technology Impact HR Practices? Retrieved August 2, 2017, from
Chron: http://smallbusiness.chron.com/technology-impact-hr-practices-37912.html

Linton, I. (2017, August 3). The Role of Management Information Systems in Decision Making. Retrieved
August 3, 2017, from azcentral: http://yourbusiness.azcentral.com/role-management-information-
systems-decision-making-1826.html

MacKechnie, C. (2017, August 2). Information Technology & Its Role in the Modern Organization.
Retrieved August 2, 2017, from Chron : http://smallbusiness.chron.com/information-technology-its-
role-modern-organization-1800.html

Markgraf, B. (2017, August 2). The Role of Management Information Systems in Decision-Making.
Retrieved August 2, 2017, from Chron: http://smallbusiness.chron.com/role-management-information-
systems-decisionmaking-63454.html

Ramey, K. (2014, January 3). IMPACT OF INFORMATION TECHNOLOGY IN AN ORGANIZATION. Retrieved

July 2, 2017, from USE OF TECHNOLOGY: https://www.useoftechnology.com/impact-information-
technology-organization/