Use of Information Technology in Controlling
JBIMS MFM Batch II - Group G Presents
Principles of Management
What is Control?Any process that directs the activities of individuals toward the achievement of organizational goals
Process where managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals
Organisation Control
Control Systems A control system contains the measures that allow
managers to assess how efficiently the organization is producing goods and services
Without a control system in place, managers have no idea how well their organization is performing and how its performance can be improved
Formal, target-setting, monitoring, evaluation and feedback systems that provide managers with information about how well the organization’s strategy and structure are working
Control Systems and IT
Standards of Performance, Goals or Targets Physical Standards Cost Standards Capital Standards Revenue Standards Program Standards Intangible Standards Goals as Standards Strategic Plans
Process of comparing one company’s performance on specific dimensions with the performance of other high performance organizations
Benchmarking
Scope of ControlFinance
Production
Human Resources
Control through Return on Investment Profit & Loss Control Budgeting
Gantt Program Evaluation & Review Technique
(PERT)
Bureaucratic Control Clan Control
What is Information Technology Acquisition, processing, storage and dissemination of
vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications
Information technology is an interrelated component that collects, processes, stores, and distributes information to support decision making
In the Competitive Business Environment three powerful
worldwide changes have altered the environment of
business.
Why Information Technology?
Emergence of the Global Economy
Transformation of Industrial Economies
Transformation of the Business Enterprise
Emergence of the Global Economy Increasing dependence on imports and exports is emerging. Today, information systems provide the communication and analytic power that firms need for conducting trade and managing businesses on a global scale. Globalization and IT bring new threats to local businesses.
Transformation of Industrial Economies Major leading economies are transforming to knowledge- and information-based service economies. Information and knowledge intense products are becoming the foundation for many services & products. Intensification of knowledge use in the traditional products is increased. More knowledge and information intense organizations have emerged.
Transformation of the Business Enterprise The traditional firm is still hierarchical, centralized, structured, and set of specialists, depend on rigid division of labor, formal rules and plans. The new style is more towards decent., flexible set of generalists to produce mass-customization products, depend on informal commitments and goals, flexible arrangement of teams, and customer orientation for task forces.
Why Information Technology?
IT profoundly affects the way managers control their organizations. People
and processes can be monitored in ways that were not possible only a decade
ago.
Managers need to control work done at the process level - IT plays three
important roles in management control processes: Data collection,
Evaluation, and Communication.
IT has successfully enabled the development of several business applications
that are necessary for planning, implementing and monitoring the control
process in an organisation
How has IT Helped in Control
IT has helped in the development of Management Information Systems
(MIS) - a formal system of gathering, integrating, comparing, analysing and
dispersing information internal and external to the enterprise in a timely,
effective and efficient manner to support managers in performing their jobs
Important business applications under MIS include Material Requirement
Planning, Enterprise Resource Planning (ERP), Project Costing, Inventory
Control, Purchasing, Computer-aided Control of Manufacturing Machinery,
Customer Relationship Management (CRM), etc
IT has also enable the widespread use of the Internet - a global system of
interconnected computer networks consisting of millions of private, public,
academic, business, and government networks that are linked by a broad
array of electronic, wireless and optical networking technologies. The
Internet has enabled entirely new forms of interaction, activities, and
organizing in the business environment.
How has IT Helped in Control
Management Information System (MIS) Management Information System (M.I.S.) is basically concerned with processing data into information.
which is then communicated to the various Departments in an organization for appropriate decision-
making.
MIS provides several benefits to the business organization: the means of effective and efficient
coordination between Departments; quick and reliable referencing; access to relevant data and
documents; use of less labour; improvement in organizational and departmental techniques;
management of day-to-day activities (as accounts, stock control, payroll, etc.); day-to-day assistance in a
Department and closer contact with the rest of the world.
Various systems under MIS - Decision
Support Systems, Resource & People
Management Applications, Enterprise
Resource Planning (ERP), Enterprise
Performance Management (EPM), Supply
Chain Management (SCM), Customer
Relationship Management (CRM), Project
Management and Database Retrieval
Applications.
Central Database
Finance andAccountingSales
Distribution
CRM
Inventory andManufacturing
Human Resources
Example of How IT Helps in Control Through an ERP System An ERP System (Enterprise Resource Planning) is a type of MIS that integrates internal and external
management information across an entire organization, embracing finance/accounting, manufacturing,
sales and service, customer relationship management (CRM), etc. ERP systems automate this activity
with an integrated software application. It facilitates the flow of information between all business
functions inside the boundaries of the organization and manages the connections to managers/
stakeholders of the business through a Central DatabaseAdvantages• Sales forecasting• Order tracking• Revenue tracking• Matching purchase orders, inventory
receipts and costing • Consolidation of finance, marketing and
sales, HR, and manufacturing applications• Make real–time information available to
management anywhere, any time to make proper decisions
Disadvantages• Customization is problematic• Extensive training requirements• Re–engineering business processes to fit the ERP system may damage competitiveness/ focus from
critical activities • ERP can cost more than less integrated/ less comprehensive solutions
ERP Implementation Success StoryTRL Krosaki Refractories Ltd (formerly Tata
Refractories Ltd)Need for ERP• TRL provides refractory (heat resistant) products to industries like steel, copper, cement, aluminium,
glass, etc• The downturn in the refractory space in 2001, Tata Refractories turned to IT to push itself ahead of
the competition• Refractory companies were looking to enhance their manufacturing capabilities, which called for
drastically cutting down consumption of refractory products. As a result, refractory companies were forced to enhance their internal technologies to suit the ever-increasing demands of steelmakers. All these initiatives forced TR to re-engineer and streamline its complete business process to get a competitive edge.• TRL implemented the ERP known as Baan IV C4 provided by Infor Global Solutions. Today, the entire
business process of the company is designed and driven by technology.
ERP Implementation• TRL’s pre-implementation process involved creating awareness and allocating budgets• The first step to implementation familiarised employees with the changes that were likely to take
place post-implementation.• Implementation of Baan IV C4 involved 2-tier approach, 1) ‘as is’ approach, studied existing
processes and suggested various changes that would speed them up. 2) ‘to be’ approach outlined details of the changes that were likely to happen in the workflow process.• The implementation took place in a span of seven months with intensive knowledge transfer from the
technology consultant to users, together with post-implementation handholding and stabilisation.
Benefits Achieved from ERP Implementation• Complete turnaround in internal processes facilitated by monitoring activities, measurement of
performance and change management initiatives. • Entire business was driven by the use of IT. • The ERP enabled TR to successfully adopted the best business practices followed the world over to
cut costs, streamline core activities, and gain significant competitive advantage.
Conclusion The managerial function of controlling is the measurement and correction of
performance in order to ensure organisation objectives and plans devised to attain
them are being accomplished and is the function of every manager from President to
Supervisor
Basic steps in control involves 1) establishing standards, 2) measuring performance
against these standards and 3) correcting variations from standards and plans
Many overall controls are financial, one of which is profit & loss control, another is the
exercise of control through calculating & comparing RoI. Other control devices include
Management Audits, Bureaucratic control based on rules & regulations and Clan
control influenced by norms & values
A variety of tools & techniques have been used to help managers control, these include
Budgeting, non-budgetary control devices like analysis of statistical data and reports,
operation audits and time-network analysis and review through PERT
With the ever changing business environment brought about with the use of IT &
telecommunications, organisations around the world utilise various forms information
technology to monitor, analyse and control critical operations and processes
MIS of several types has significantly helped companies in improving the way they
achieve effective and efficient operations through meticulously tracking & controlling
important business processes
AnnexureGroup G Team MembersRiddhi P Ghelani - 88Vinay Hegde - 114Vishal Rajput - 116Mahmad N - 61Nakul Savani - 102Ronald Dias - 93
References
Essentials Of Management By: Koontz, Harold Weihrich, Heinz
MIS: http://www.diacritech.com/samples/interior_design/Computer-4color.pdf
http://en.wikipedia.org/wiki/Management_information_system
ERP System: en.wikipedia.org/wiki/Enterprise_resource_planning
ERP Success Story: http://www.expresscomputeronline.com/20040517/ebusiness01.shtml
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