People do not take care of ethical issues while developing an information system at least until a serious scandal occurs (Clifford, 2009). These scandals may impact negatively on the business economically and therefore, should always be considered especially when coming up with a new information system. Some of the major ethical issues relating to information system include data misuse and privacy, access and control of information, and other considerations within the system (Clifford, 2009).
The new information system should take care of the type of customers (Post and David, 2010). Moreover, to increase the market base, both individual customers and businesses should be taken into consideration. According to Cliff (2009) the system has to take care of the unique distinctions between individual customers and businesses. Important things to note include the legal personality, level of liability, and the possible difference in quantity of purchase.
For information system to serve its intended purpose economically and efficiently, a good care should be taken on the information being gathered. This will enable accurate tracking of transactions and full information on the customers, suppliers and management team. A good information system is that which can accurately determine the purchase pattern of a customer and establish their contact information for feedback purposes (Clifford, 2009).
It has proved difficult and expensive for Margret to keep track of her transactions as she has been using a manual system to work on inventory, invoices, and customer orders. It becomes very difficult to compete with major book retailers. If Margret decides to embrace management information system (MIS) and automate her transactions, she will be able to compete even with already established book retailers. She will be able to gather and disseminate the right information from and to right people within the shortest time possible. She will not have to keep piles of files, as designed management information system will have a data warehouse from where data mining can be done to help for strategic, operational, and decision-making in tactical situations. Orders will be acted upon very first, and unlike before little or no delays will be experienced when a proper system is put in place. Margaret will be able to have an accurate inventory account with accurate costs. Customers will be accurately priced which boost the confidence level of the customers. She will be able to place orders that are on current demand as she will have the information at an appropriate time. This will reduce the cost of ordering obsolete books and hence compete favorably with established booksellers. Unlike in the past, Margret will be able to have a comprehensive current financial position of the business as it will be automatically generated. With this kind of system, employees must not have a manual data collection as they can be fast and easily entered into a computer program.
Developing or acquiring management information system can be very expensive in large companies but small businesses like those of Margaret’s competitors can always avoid the problem. Her competitors are reducing this cost by adopting groups of applications for a variety of functional areas that are designed to be as compatible as possible. To reduce the cost of acquisition, Margaret’s competitors ensure that incompatible components are not purchased by involving personnel who have a wealth of knowledge in information technology. Even though the cost of adopting management information system may be expensive, it is true that the ignoring cost exceeds in the long-run (Post and David, 2010). Management information system also lowers operating costs in various ways. MIS facilitates communication amongst various departments, such as, marketing and sales department to ensure that all product features are as clear as possible to ensure that customers are not confused. This may enable the firm to acquire and retain new customers. This may be possible with all the departments as the developed database contains all the information required by all departments and other stakeholders. MIS may also eliminate redundancy efforts that would otherwise, experience in various functional areas (Post and David, 2010). Moreover, cost of paper work and the space consumed by the files and the charts is significantly reduced by management information system. With the reduced cost by MIS, an increase in the company profit can be realized in various ways. It enables pulling together of information which helps improve inventory management, web-based self-services. Availability of information always helps in making the right decision. Margaret’s competitors are able to know the newly demanded books ahead of her and be able to make higher sales, which translate to higher profits (Post and David, 2010). They may also be able to respond to the customer orders in time hence increase in purchasing frequency leading to high revenue. They may experience little or no stock-outs as restocking can be done in time and costing done accurately. When her competitor lower costs, they are able to purchase in bulk hence enjoy economies of scale, contrary Margaret. With well automated inventory management, firms win the confidence of customers (Post and David, 2010). Consistency of quality services to both suppliers and consumers earn competitor goodwill, which is economically profitable. Unlike Margaret who makes losses because of manual system, her competitors reduce cost and make huge profits by use of Management Information System.
Generally, when small business grows, management becomes difficult as the business data also grows bigger. Jobs, which may be easily handled manually, become very difficult or impossible to handle. Continual uses of manual operations in larger firms always attract huge losses as witnessed in the case of Margaret. There is always lack of accuracy in the inventory counts, orders by suppliers are always be late, errors are often experienced on invoices, and it may be very difficult to have the exact financial position of the business, as it is very difficult to do that manually. To avoid this, growing firms, always resort to an automated system. Management information system has been majorly adopted to solve the problems that come with the increasing size of the business. Management information system enables instant flow of information between functional and departmental areas, which improves an organization’s responsiveness (Kroenke & Richard, 2009). Advanced technology maybe very costly to put up, but with controlled purchase, the basic system can be acquired. A well-organized system can provide needed information that results into cost reduction and increase in the business profit. Firms that have embraced automated systems have increased management efficiency compared to those that use the manual system (Kroenke & Richard, 2009). This is possible as MIS provides quick information on procedures and business operations. Businesses, that embrace management information system enjoys; advanced communication between its employees, reduced cost of manual activities, needs of the customers is understood, ability to make business strategic decisions and utilize resources to the optimum. With all these benefits, it is advisable for growing firms to adopt automated systems to help in handling the increased business data.
References
Clifford Stoll (2009). The Cuckoo's Egg: Tracking a Spy through the Maze of Computer Espionage. New York: Doubleday.
Post, Gerald V., & David L. Anderson (2010). Management Information Systems: Solving Business Problems with Information Technology. New York: McGraw Hill.
Kroenke, D., & Richard H. (2009). Management Information System. New York: McGraw Hill.
