Introduction
Information processing is a way to view organizations and their designs. The purpose of information systems is to get the right information to the right people at the right time in the right amount and in the right format (Rainer et al., 2007). Both information systems and individuals possess a capacity to process information, but this capacity is not unlimited. However, the scarcity of information-handling ability is an essential feature for the organization’s demand for information processing and its capacity for processing information (Burton et al, 2001).
Information system is therefore considered in situations where an organization is sought as a whole with respect to its information requirements and information utilization. French (2004) further defines it as the total apparatus for handling information within the organization in all respects. With the complexity and changeability of the context and internal control structures in which modern businesses operate, dependency on information systems is demanded. Therefore, up-to-date, complete and accurate information proves to be a necessity for such businesses to survive in an increasingly competitive world. In other words, an organization processes information in order to coordinate and control its activities. By doing this, it observes what is happening, analyzes and makes choices about what to do, and communicates to its members.
The rationale-underlying concept which makes information processing necessary to an organization is the mechanism by which it can obtain coordination of its activities in a reliable and efficient manner. Nevertheless, it is evident that organizations strive to achieve certain objectives for the benefit of their owners or clients. These objectives can be expressed as increasing revenues and profits, avoiding costs, or improving services; which are to be met within various financial constraints and limitations of available resources.
Drawing from information processing theory, Information Technology IT and the objectives of a firm to be able to plan ahead, and control and co-ordinate its activities, the provision and communication of information is significantly dependable. The information is thus likely to be used most effectively if it is seen as a resource which needs to be exploited to best advantage by the whole organization and not just by its individual departments (French, 2004).
Therefore, information technology strategy should be an expansion of enterprise’s business strategy in the field of supporting its business programs and basic supporting production or service processes. This point of view results in the fact that basic goal of IT strategy should be systematic and balanced hardware, software, and information infrastructure development. IT strategy expert Mahr (2010) asserts that information technology enhances horizontal information processing, which is the primary mechanism to coordinate a firm’s subtasks in decentralized organization designs, but IT may also enhance vertical information processing, which is the primary coordination mechanism in centralized organization designs. However, the idea that decentralized organizations design can be viewed as a centralized organizational design lies behind this information system’s view of organizations. Whether or not such view is adopted, such requirement of providing and communicating information remains. These requirements are met, at least in part, by the data processing systems within the organization. This research takes to look into information processing issues in regard to the business environment.
Information processing
The prime objective of information systems is to economically process data into information and ‘knowledge’. Therefore, data items refer to a basic description of things and transactions that are recorded and stored even though they are not organized to convey specific information. On the other hand, Information in this context refers to any meaningful item obtained from assembling data, for example, a payroll, an invoice, financial statements, or reports. Similarly, ‘knowledge’ is data or information that have been structured and processed to suggest understanding, experience and expertise as they apply to a current business problem (Rainer et al., 2007).
Data Processing
French (2004) views data processing as the collection and manipulation of items of data so as to produce meaningful information. Over the years, data processing involved electronic means, principally the computer, therefore diverting the view to electronic data processing. Most organizations apply the use of electronic data processing mostly in sales order processing, purchase ledger processing, and payroll processing.
Information technology is the technology which supports activities involving the creation, storage, manipulation and communication of information, in addition their related methods, management and applications. Therefore, IT may be seen as the broadly based technology needed to support information systems (French, 2004). In regard, computers play a central role in Information Technology. Since, they are responsible for processing and storing data processed. Thus, the computer displays for significant functions that are quite conspicuous in information processing, these are; input that allows the computer to allow data from outside, storage that allows the computer to hold data internally before, during and after processing, processing the actual step that allows the computer to perform operations on the data it holds, and finally the processed data that is important to the user referred to as output. It is to be noted that the processing operations of a computer are determined by programs stored within the computer. A program is a set of instructions that is used to make the computer perform a specific task, such as calculating interest to be paid to savings-account holders or producing a payroll.
File Processing
The processing of files is of major importance in data processing. Practically, data processing almost invariably involves the processing of files. Even though files are being replaced by databases in a growing number of organizations, the basic principles of file processing apply. Organizations need to clearly understand the methods of file processing so as to be able to effectively adopt modern methods of data processing. Since every data processing system is required to provide timely, accurate and appropriate information about the real state of affairs, there is a fundamental requirement for the state of data processing system to correspond to the real state of affairs whereby file processing plays a major role in meeting these objectives.
Tools available for Information Processing
In a commercial context, the business case for investment in the (re)development of the computer systems will usually depend upon the potential for increased efficiency in the organization, and often the improved performance, increased revenues or reduced costs will be found in department other than the one responsible for the information system developments.
Information processing requires tools to solve current issues in an organization. Therefore, organizations expect efficient information systems to address performance, reliability, standardized access capabilities that return information in well-defined formats, adaptability, validation and documentation (Heynderickx et al, 2010).
As a result the use of such tools proves reliable. These include; text processors that allows the user to write pretty well formatted documents, client-server technology that enables the user to perform tasks in a co-operative way with the server, databases, artificial intelligence that plays a major part in improving the interface between humans and computers image and speech understanding, expert systems, data warehousing and the use of internet and email that allows paperless exchange of critical business information between parties in a business (Sonfroniou, 2008).
The skill level and capacity of employees help define the techniques and processes and must be compatible with the technology applied. Technology here refers to the information, process or equipment required to transform inputs into outputs. From an information processing point of view, the categories may be transaction processing that involves storage, modification and retrieval of an organizations transactions, information presentation and reporting thus delivering powerful information for making the most informed decisions and measuring the organizations performance, strategic advantage that also offers the business organization planning tools and other resources to help develop and implement significant decisions and problem solving skills that is a fundamental part for any business success (Heynderickx et al, 2010).
If the organization is small, coordination can be obtained by centralization. However, due to demand and expansion of the firm, decentralizing some decision-making process in the organization becomes important. Real-time processing, a situation whereby a client has to send a transaction and await a response from a distant computer before continuing, may also be achieved if the tools required to solve a specific issue in an organization are applicable. In addition, response time on the data communications facility is crucial such as when a customer is utilizing a voice call to obtain a quick response.
Span of control and skill level of employees are linked to complexity of information. Consequently, the more complex the information, the higher the demand for information processing capacity, and the higher the number of vertical levels. If employees have a high skill level, he or she can process complex information. Therefore a high skill level will, ceteris paribus, decrease the vertical information systems and the number of vertical levels (Burto, 2000). Conclusively, modern information technology can decrease the vertical information systems, e-mail, and so on increase information capacity and eliminate the need for a large middle management. That is, modern information systems can process information previously handled by middle management.
Fastrek Plc., headquartered in London, is a delivery service company with an increasing clientele database. This delivery firm distinguishes itself from the competition by providing a differentiated customer experience and its undying commitment to its tag line “service is key”. At Fastrek Plc., the CEO coordinates activities by reading the mail in the morning when orders arrive. He processes the orders and issues directions for the day. He is the central figure coordinating activities in an environment in which orders and specifications have to be in writing. He balances the risk and centralizes the information and decision making in order for his firm to be effective and efficient. However, the introduction of the internet changed how this firm operated. Orders came in at any given time, therefore, information demand increased. The demand for quick responses grew because customers wanted offers immediately by email or call. Because modern technology allows customers to send requests to more than one firm, competition enhanced. The delivery firm’s old centralized decision procedure no longer worked; decision had to be developed. Changing the information flow changed the organization structure.
Information Processing Methods within Fastrek Plc
Centralization is where majority of decision are made by senior management or by a centralized function. For example, in Fastrek plc old centralized decision method, the CEO received orders in the morning, processed them and later gave instructions for the day. As a result, few decisions are delegated to lower level managers who simple carry out the order of senior management or centralized function (Best et al, 2005).
However, the demand for quick responses at Fastrek delivery firm grew because customers wanted offers immediately by email. Other factors such as under-motivation for lower level managers, slower and inefficient decision making procedures, and lack of clear understanding on departmental decisions demanded for a distributed or decentralized method that incorporated real-time response.
In a decentralized organization, authority is delegated down the structure to divisional or lower level managers who make their own decisions. With this method in place, information processing at Fastrek plc ensures the limitations discussed above are avoided. As the firm expands its activities and operations, plans for restricting their information processing methods have to be looked into. A mixture of both centralized and decentralized approach for different decisions might be a solution in applying an efficient information processing procedure.
Alternative methods
Other methods that can also be applied are; batch method which involves executing or processing a large number of accumulated orders or transactions at one time. However, batch processing does not allow real-time processing since transactions are collected and updated as a batch when it’s convenient or economical to process them. The stages followed are collecting and storage, and processing the data at a convenient time. For example, Fastrek plc can apply this method when processing orders that would not require an immediate feedback.
Transaction processing method is a system that supports a business in the delivery of its business transactions. Therefore, transaction processing involves the continuous updating of the customer and inventory files as orders are entered. A business transaction is an event that generates or modifies data, for example, calling the bank to confirm an account balance or perhaps collecting of accounting information. Consequently, each type of business transaction may have multiple stages before it is completed, whereby at each stage it may generate financial information that may be useful to the responsible staff and intended users. Information systems may apply both batch and transaction processing (Reich, 2011).
Evaluating information systems within Fastrek Plc
In the past, the majority of data processing has been carried out by companies using batch style computer systems. With the cost of hardware rapidly reducing and with the hardware power and facilities increasing inversely, on-line systems are now becoming easier to justify and develop (Sonfroniou, 2008). Measurement and evaluation of information technology is irrelevant to winning in the market since all the technology is available to the competition (Grembergen, 2002). From a recent research, there is increasing evidence that information systems fail to deliver their expected benefits. This situation has motivated the development of different evaluation models for information systems, mainly focused on investment justification. Indeed, most organizations turn to new technologies, in particular, information systems that will provide them with a competitive edge.
The selection of a set of measures for different organizations depends on the circumstances and the context faced in their business environment. This view has led to the development of contingency models for evaluation of information systems. According to Willcocks et al (1992), the use of contingency models would assist in understanding the role and impacts of information technology or information systems. Information technology or systems can affect business operations in various ways and the ultimate impact on business performance depends on various intertwined factors that can render the evaluation task a challenge.
Consistent evaluation of IT should be based on an overall management framework, a set of key measures, performance targets associated with selected measures and underlying information and reporting system. Given the range of frameworks, performance measures, reporting mechanisms available to include in an IT evaluation program, there is a clear need for a systematic approach to the design process. To derive an appropriate set of attributes for an It evaluation program, four activities must be carried out, these are; understanding stakeholders’ needs and expectations, determine IT application and supply, derive performance measures and targets, and test adequacy.
When the design and verification of an evaluation program has been carried out, which means that real activities are measured using a set of selected performance measures, associated targets, evaluation techniques, and tools; the next step is to weave the evaluation program into the organization and existing management practices. Having discussed the what of evaluation program design, it is the how of putting the program into practice that is now of interest. The implementation of information systems evaluation program focuses on the development of three conditions essential for effective implementation; operational alignment, stakeholder ownership and stakeholder mastery.
Although the design and implementation of an IT evaluation program might not be easy, the operation of it requires the sustained commitment of an organization and its stakeholders to exploit such a program to its full potential. The ability to measure and evaluate performance on a continuing basis assumes the existence of fundamental and reliable information systems, procedures and databases that link disparate pieces of existing operational measures so they can be used for analysis purposes.
To demonstrate the purpose for which the program is originally envisioned, evaluation results must be seen to be used to fuel sustainable improvement actions. Developed improvement actions justify the need for the evaluation program itself and demonstrate the seriousness of management that drives the program. Evaluation results and improvement actions therefore must be communicated and, above all, managed.
References
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Heynderickx, B. (2010). Data processing, Data Bases and Tools Available: Present and Future. Brussels: BISA.
Mahr,F. (2010). Aligning Information Technology, Organization, and Strategy: Effects on Firm Performance. Gabler Verlag.
Rainer, K. & Cegielski, C. (2007) Introduction to Information Systems: Enabling and Transforming Business. John Wiley & Sons
Reich, S. (2011). Characterization of a Business Transaction Processing System. Retrieved From http://st-www.cs.illinois.edu/users/johnson/business-transactions/sreich.html, March 22, 2011.
Sofroniou, A. (2008). Business Information Systems: Concepts and Examples. PsySys Limited
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