IS/IT procurement
Current scenario of M.R.S. Oil and Gas Company
M.R.S. Oil and Gas Company is one of the leading distributors of petroleum products including AGO, PMS, Base oils, and DPK in Nigeria. The company is presently facing various challenges brought about by the neglecting of important roles played by Information Technology in business. The company is in ownership of various isolated information systems which up-to date have proved not to support smooth running of business. In this regard the company should consider procuring better IT equipment and other supporting requirements to cater for the same.
The usual company business process include procurement of crude oil from other companies that sell crude oil, refinement of the crude oil, supply of refined products to marketers, and transport logistics.
In place is an inventory system that controls the procurement of crude oil and final products. This system is isolated from other information systems that aid the company in running smooth and accurate business. The inventory system only tracks the inflow of crude oil and the outflow of the refined products. Other information about the procurement of crude oil and supply of refined products is manually reported.
In addition, the system that controls oil refinement is independent and not connected to any other information system. The information collected from these systems is manually linked with other information from different systems of the company.
Another crucial system that needs integration is the procurement system that helps the company to determine the quantities of crude oil to be bought. There is no linkage between the procurement system and the system that controls the flow of available stocks.
The way of communication in the company is through ordinary electronic mails. Every personnel have to be checking mails every now and then. There is no direct communication between the suppliers of raw materials and the communication. This calls for a system whereby the two entities exchange information in almost real time so as to enhance smooth business continuity.
The transport department also is isolated. The transport data is kept in basic spreadsheets prone to damage or modification. The data that is reported from this department are done manually giving hard time to department managers. Meter alteration is also possible with the current state of information systems thus encouraging fraud of company resources. .
The disadvantage of all these isolated systems is that there is poor flow of communication within the company, thus hindering the speed of business operations (Khosrowpour, 2001). Another problem of the same is that some critical information may be tampered with thus producing unexpected outcomes. In addition the company may run at a loss due to inaccurate information concerning procurement of raw materials.
Isolation of information systems also leads to increase of operation cost (Broadman, 2005) since the company would be uncertain of production and sales trends. Personnel in the transport may also deliver inaccurate data of quantities delivered to suppliers of the refined products.
Integrated system is therefore recommended so as to enhance speed and accurate business process within the company. This will make data dependent of each other thus making it hard for individuals to interfere with crucial data which may otherwise lead an organization into untold losses. The same will enhance exchange of information among entire sections of the company.
References
Broadman, H. G. 2005. From disintegration to reintegration: Eastern Europe and the former Soviet Union in international trade. USA: World Bank Publications.
Khosrowpour, M. 2001. Managing information technology in a global environment: 2001 Information Resources Management Association . New York: Idea Group Inc (IGI).
