Literature Review
Management information system (MIS) is known to have several implications cross-business processes (Chen, Wang, Nevo, Jin, Wang & Chow, 2014). Operations across corporations and their decision making are based on information that is generated form IT systems such as MIS. MIS comprises computer systems that include software and hardware. It is known to gather multiple information from online systems that improve decision-making. Holden Australian automobile manufacturer has incorporated MIS in order that its business processes can be improvised (Laudon & Laudon, 2016). The current scope of study includes a brief evaluation of a literary framework for MIS and findings from secondary sources. A brief discussion along with conclusion and recommendation for the study has been encompassed that allows analysis of business processes in Holden.
Holden is an automobile manufacturer and importer of automobiles. The Company’s headquarters is based in Port Melbourne, Victoria in Australia. The Company has a centralized organization structure with over 180 employees. Decision making and corporate operations of the Company is undertaken by through information systems. The Company has several information systems, amongst which MIS is the most critical as it has been found to have implications on several business processes. The study analyses implications of MIS on business processes in Holden.
The project can be justified as the incorporation of MIS has to impact on several varied business processes of Holden. The analysis undertaken in this study can provide the basis for impacts on decision making that has been improvised through MIS (Tallon, 2008).
The research aim that is accomplished in this study is to understand the implications of MIS in improving business processes in Holden.
Analysis of relevant literature is critical while undertaking any kind of research. In this study, there has been included literature material in order to understand the several implications that MIS has on business processes. Bharadwaj, El Sawy, Pavlou and Venkatraman (2013) analyses a critical digital strategy that businesses need implementing. Contemporary organizations in order to compete are adopting digital strategy; such strategies are based on information systems. Information systems such as MIS extract crucial information from external sources as well as internal to process data, which in turn enables decision making. Such decision pertains to varied areas, which in turn impacts business process management. One key area in which MIS allows taking effective decisions is in regards to financials. MIS is considered to be the backbone for the organization as it gathers data from multiple sources which aid in decision making to improve operations. It can compare sales, revenues, profitability, capital structure and other financial aspects of the Company and compile the same. The information is used for decision making for raising finances, allocating financial resources, ascertaining costs and in making other decisions (Röglinger, Pöppelbuß & Becker, 2012).
Implications of MIS on Business Processes
The extensive wide spread of organization’s operations, such as multiple warehouses, various assemblies, multiple showrooms and so on prohibits to ascertain physical stock of raw materials and warehouse conditions easily. Wüllenweber, Koenig, Beimborn, and Weitzel (2009) states that through MIS it becomes possible to integrate and compile such a vast amount of information. MIS has the capability to reflect quantities of materials, finished products and other items that are available. Meaning an MIS allows retrieving information easily from various point of operations in inventory that are crucial in ordering quantities, procuring raw materials and so on. Such decision making saves cost and time by reducing loss in time and wastages. An organization’s most integral resource is its personnel, which is why it becomes critical to maintain an information system that contains critical information pertaining to them. An MIS effectively maintains databases of personnel, their leaves, pay structure and promotions along with other details (Turban, Sharda & Delen, 2010). This allows effective management of personnel and allows coordinating between them to attain organizational objectives.
A large organization often finds it difficult to maintain multiple project timelines. Kohli & Grover (2008) states that IT enables the capability of the organization for managing multiple project deadlines. With the growing need and diversity within the organization, it becomes crucial to undertake multiple projects and maintain the profitability of the organization as well. Failure to meet deadlines of projects might affect other business processes and ultimately impart bad repute for the organization. MIS maintains project deadlines in an appropriate format and in separate folders with specific alarms for timelines. Dynamic management of project deadlines allows organizations to undertake their business process management well. MIS in manufacturing is present which allows managing of several batches of products and then assembling them. Mani, Barua, and Whinston (2010) state the capability of MIS in the management of business processes is immense. MIS has the capability to coordinate amongst various functions and operations of the management within a single domain with ease of retrieving information. Impact of MIS is tremendous on all business processes, which in turn has the capability to render effectiveness within the organization.
Marketing which comprises an integrated functionality in promoting products of the company. Tzeng, Chen, and Pai (2008) state that MIS furnishes crucial information to marketing managers, which allows them to take a decision pertaining to the marketing of products of the Company. Information such as marketing budget, market share, consumer information, and various other data is compiled by way of MIS. As it converts data into information, which is further needed for taking decision-related to market within the Company. Research and development team receives crucial information for product development or their transformation from MIS. MIS compiles market and internal information and then furnishes to R & D, which makes of such information for maintaining the competitive edge of the Company. This information is used in the enhancement of the core competency of the Company.
Research Methodology
Analysing relevant literature for the study leads to arriving at a literature gap related to the same. There is no direct emphasis on the impacts made on business process management on the automobile sector in Australia or related to any specific Company. Thus, the scope of this paper aims at fulfilling the gap to analyze the several impacts made by integration of MIS into automobile industry’s business processes management.
Research methodology is the most critical and significant aspect for conducting any type of study. The aim of a method is to find suitability such that research aim, objectives and questions can be attempted in an appropriate manner (Zikmund, Babin, Carr & Griffin, 2013). Positivism and interpretivism are the two main types of research methods that can be used for this business research study. In positivism, scientific quantitative methods are preferred whereas interpretivist make use of humanistic qualitative methods. A study can be conducted in a qualitative or a quantitative manner, for the sake of this study qualitative approach has been used. The scholar has collected qualitative data and analyzed it in an interpretivist manner in order to arrive at the findings related to the study.
Post selection of a method for conducting the study, it becomes pertinent to select an approach for the same. A research approach is a broad-based plan that comprises several steps and underlying assumptions (Smith, 2015). It includes a procedure for data collection, analysis, and interpretation. An approach for data collection can be quantitative or qualitative in nature. Quantitative data deals with mathematical and statistical data, whereas qualitative data comprises of subjective data. For the purpose of this study, a qualitative approach has been selected. On the other hand, data analysis technique has to be ascertained also. A study may be conducted in an inductive or deductive approach. Qualitative data is analyzed in a better manner using an inductive approach. Generally for quantitative data makes use of the deductive approach. In the inductive approach makes use of secondary data for deriving concepts, models and themes (Bryman & Bell, 2015). The study develops a theory to arrive at a brief summary and building links between the objectives of the research.
It becomes pertinent to select an appropriate research design for the study. The varied types of research design include correlation, descriptive, experimental, semi-experimental, and meta-analytic and review. The scope of this study has made use of review techniques for collecting and analysis of concepts specified. The review research design will provide a framework for arriving at answers to the specified research questions. It becomes integral to specify research tools for the purpose of the study (Taylor, Bogdan & DeVault, 2015). Research tools allow the collection of data pertinent to the study. There are various kinds of research tools that are available such as observation, focus groups, and questionnaire and so on. The study has made use of secondary data that has been collected Federal Chamber of Automotive Industries by means of observations.
Conclusion and Recommendations
Method of data collection can be primary or secondary sources. Primary data collection includes first-hand data whereas secondary data includes data that has been collected by someone else as a part of their research work. In order to conduct this study, the scholar has made use of secondary data that has been collected by the Federal Chamber of Automotive Industries. Data analysis method of inductive techniques has been used for the study (Sekaran & Bougie, 2016). This study has made use of the qualitative inductive approach. The study has cross-checked and verified data that has been collected in order to check for reliability. The study has followed ethical procedures such as providing appropriate references wherever possible and included a link, in case any.
The study has collected data primarily from a secondary source and then arrived at findings related to the study. Analysis of data that is collected from the Federal Chamber of Automotive Industries in Australia revealed a few implications that MIS could have on business process management. The automobile industry in Australia is known to transform raw materials such as steel and aluminum into value-added products as automobiles and automobile parts. The industry is a leading contributor to the economy employing more than 400,000 people either directly or indirectly. The industry is considered to be a leader in innovation with significant research and development activities going on. The industry has been able to diagnose ways for environmental technologies with safety features for fast Australian vehicle fleets. It has been effective in reducing polluting by 15% in the past to ensure the sustainability of vehicles. In areas of Electronic Stability Control, the Australian automotive industry has adopted advanced safety technologies. The figure below depicts the sales unit of varied types of vehicles in Australia. The annual turnover of the industry exceeds $160 billion. The industry contributes to total taxes in excess of $10 billion.
Figure 1: New Motor Vehicle Sales
Source: VFACTS
The various reports and data from the industry are directly reported to the Federal Chambers from automobile companies. Automobile companies are also able to retrieve information pertaining to manufacturing, finances, inventory and so on from the Federal Chambers. Each company has available MIS that integrate various functionalities and operations such that overall business processes can be improvised. With the Australian automotive industry being dynamic in nature, companies are expected to strive and continuously improve their business processes such that they are able to sustain their businesses in the future. In absence of MIS, companies will not have readily available information; hence they will not be able to take strategic decisions easily.
Figure 2: Automotive Industry R&D expenditure
Source: Key Automotive Statistics
Recycling, reducing emissions, building sustainability and various other agenda within the industry is attended by means of a compilation of data. Such versatile data can be contained within MIS only.
The automobile industry in Australia is highly dynamic in nature. With the Federal Government easing norms and allowing ease of entry into automobile markets. A large number of foreign automobile dealers have entered the country increasing competitive pressures. Holden in order to survive such competitive pressures needed to enhance its business process management such that they can function effectively. The age of globalization has impended tremendous pressures and challenges for organizations. In order to compete in the globalized scenario and continue profitability, organizations need to incorporate information systems (Trkman, 2010). In absence of information systems, it almost becomes impossible for organizations to maintain the huge flow of data and information. Holden experienced a phase of decreasing profitability and decreasing market share. It had highly ineffective business operations, which could allow it to compete with international automobile manufacturers and assemblers. Information was analyzed to be the only factor that could provide the capability to the Company to compete in such a competitive sphere and make its business processes effective.
Business process management such as finances, personnel, inventory, project timelines, manufacturing, marketing, and research and development comprises of integrated functionality for an automobile organization (Seddon, Calvert & Yang, 2010). The organization Holden already had managers handling various operations and functionalities. However, they did not have access to competition information and other departmental information, which often led them to undertake random decision. At one instance, marketing managers used to undertake advertisement for automobiles, which no more had consumer demand. At another instant, the finance manager decided on a debt at the high-interest rate, in spite of commercial loan is available at a lower percentage. This led to a drop in business process functionality and ineffectiveness in overall processes. Post-adoption in MIS within the organization, all business processes came in close connection with each other (Chen, Mocker, Preston & Teubner, 2010). It allowed an informative decision making by managers in all departments. Manufacturing, warehousing, and inventory systems became more effective with managers being able to order raw materials at an appropriate instance. Finance department had available revenue, costs, profitability, interest rates and so on, which allowed them to make budgetary decisions and financial decisions easily. Coordination of all information allows decision making in an effective manner which in turn allows improvised business process management. MIS allows effective management of business processes easily.
Conclusion
The above findings related to automobile industry reveals that with such huge amount of workforce employed in the industry with such vast operations MIS can aid in several functionalities (Chapman & Kihn, 2009). While manifestations of MIS are multiple in nature, they have been seen to be directly associated with business process management. With the automotive industry being a leader in innovation and major research and development going on, there is bound to be present an information system that assists management to undertake decisions. Decision making has a strategic importance across the organization and along with various processes as well as operations. Therefore, it can be concluded that in absence of MIS, organizations such as Holden might encounter several challenges carrying out their operations.
The organization within the automotive industry is unable to perform in a competitive manner. Therefore, it can be recommended that the organization develop an MIS that is well suited to its state of the art. A tailor-made MIS can assist the organization to cope up with versatile data and increasing complex competitor information. The MIS has to be capable to processes large amounts of information and data so as to provide an adequate solution to the organization so that it is able to undertake futuristic decisions. It is not adequate to have handy MIS; rather it is needed that managers are capable of analyzing and taking appropriate decisions. Therefore, it becomes integral that managers are able to analyze such versatile and large volumes of information to arrive at conclusion related to the study.
The study has several limitations, the most important one being qualitative in nature. The scope of the study has not undertaken any sort of quantitative data for its analysis. Secondly, the study is limited as it pertains to the scope of Holden, which is a small Company within the automobile industry. The study due to lack of time and resources has collected data from secondary sources, which means that data of primary nature has been avoided in totality.
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