External Business Information
All of these aspects combined should insure that the information reaching the different levels of the organisation would allow them to make correct and successful decisions for the business. A primary task of management for any firm is coping with change. Management, and the information systems that support them, have to learn to deal with change and to adapt their operations accordingly in order to survive. Competition is a typical change that is taking place in every industry, managers need to be able to view data such as performance related data in order to constantly evaluate their position in the market place.
This is important in making sure that they do not begin to lose their market share to their competitors. There is also increased globalisation with lower trade barriers etc. Another change is the faster pace at which business is moving. MIS systems need to be able to cope with these changes and the managers need to ensure that they are receiving the correct information, which will allow them to deal with these changes and make decisions accordingly.
Information Technology is one area, which has seen a lot of change and businesses have adapted to this change and are constantly using new technology. Computers play a big part in information flow in organisations. They are used in order to facilitate the various systems in place by acquiring, monitoring and communicating information. There are many functions of IT, which can produce data of company facts and figures, which is then processed into the information that the different levels in the organisation receive according to their needs. Although computers are not necessarily essential for MIS, they are an important means of producing information.
The Need for and Use of Internal and External Business Information In Organisations As we have seen planning requires a lot of information. The types of information and their sources will vary from organisation to organisation but there is a general principle that for long term planning, external information is critical. At lower levels and on a short term basis internal information is important but for long-term goals and ensuring the survival of the company external information is vital.
Types of External Information: Social Factors – this includes changing views on consumption and savings, what would be the effect of the changing family pattern? Demographic Trends – This includes how the population structure is changing, is it an ageing population? Economic conditions such as what are the forecasts for growth, inflation and G.D.P. What will be the effect of the European single market?
Political Factors – How will political decisions affect businesses, will it effect trading in overseas markets? Markets and Competition – How will the market be segmented, what would be the effect of growth in the market, what will competitors be doing? Technological Change – Will the business be able to change and adapt to new technology, if so how will the changes affect the organisation.
Internal information is just as important to a business, however it is likely to be more useful to lower management for the day to day running of the business and for the short term. The majority of internal information is performance based and so managers and lower levels will be looking at where improvements can be made and will make decisions and set targets based on this information. This is using the feedback process. Feedback is a means towards improvement. It will be part of the output of systems and become part of the input of the system.
Types of Internal Information: Personal Information – this will include labour skills, and training, sickness and attendance records Financial Information – this will include data on profit, costs, cash flows and investments Marketing and Sales information – this will be information on performance, revenues, distribution, market share Production and Operational Information – this will be on assets, quality standards, outputs, and lead times. Research and Development Information – this will focus on new products and developments.
The sources of internal information will be outputs of the organisations MIS, whereas with the external information the sources are likely to be published reports, government statistics, company reports etc. The Banking Industry is one of the largest and most lucrative industries in the world. With new entrants constantly entering the market and the rapid speed of the changes in the market, these businesses have to keep up with the changing times and constantly analyse internal and external information generated by MIS. MIS’s in this industry are vital to each business and they rely heavily on the information produced from it and also form external information to ensure their survival in a rapidly changing market.
Barclays Bank is one of the world’s largest banks with over 78,000 employees worldwide. They are a UK based financial services group engaged primarily in banking, investment banking and investment management. They set their objectives based on the information that they receive at each level from their MIS. They then make decisions on this information constantly keeping aware of their changing environment. I will look further into this industry and the changes it has undergone in the last decade later in the assignment.
MIS as a Business Management Function Management takes place at all levels and management functions can be grouped into: Planning, Motivating, Control with decision-making taking place within each function Information is vital to any organisation and everything an organisation does involves using information in some way. Information both supports and is involved in the total business process. Given the crucial role that information plays in and around organisations it is important that this information is managed effectively. Managers must understand the value of information.