Unit 2.3.Information Technology and MIS

2.3.1. What is IT?

There are few aspects of life nowadays which are unaffected by IT. In the office, factory or at home, visiting a bank, supermarket or garage and in many other places IT is used to carry out transactions, provide information, record data, make decisions and perform an every increasing range of tasks.

A useful definition of IT is:

‘the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numeric information by a micro-electronics based combination of computing and telecommunications’.

The main motivation for investing in information technology during the 1980s was to reduce costs, improve productivity and become more competitive and efficient. During the 1990s there is a need to develop more interlinked processes, and share information both within the organization and among trading partners at home and abroad. The advent of global trading requires information to be shared between trading partners, nationally and internationally. In addition, the move to open systems and uniform standards for Electronic Data Interchange (EDI), Interpersonal Mail (IPM) and Electronic Funds Transfer at Point of Sale (EFTPOS) is causing changes in the way companies interact and exchange information with their partners, suppliers and customers worldwide.

Electronic trading, however, is firmly based in certain industries, particularly in the food retail markets. This have been achieved by optical scanning.

The use of optical scanning at the point of sale by leading supermarket chains has improved customer service by reducing queues and providing itemized bills. In addition, the sale of the item is recorded for stock control and the inventory has been reduced. This forces stocking further up the supply chain, and stock replenishment cycles are faster.

Computers are not essential for MIS but properly used they can be invaluable. Jobs best suited to computerisation are those with the following characteristics: accuracy and speed important, high data volumes, and a degree of repetition.

The division between computer and human tasks is constantly changing. Tasks previously requiring managerial expertise and judgement become worthwhile computer jobs.

An example is the now widespread use of ‘credit scoring’ in banks: An applicant for a loan fills in a detailed questionnaire and the answers are input into a computer. The program carries out a series of checks and tests and decides whether or not the loan should be granted. Previously all loan applications required a managerial decision which is now needed only for unusual requests, large loans or industrial applications.

When contemplating the introduction of IT the reactions of users and the people affected by the system must be considered. In general people dislike change and can feel threatened by new systems especially those that use technology with which they are unfamiliar. There is inertia and consequently a slower rate of acceptance of new IT based systems than system designers of IT manufacturers like to acknowledge. For example there have been repeated forecasts that the use of credit and debit cards, ‘smart’ cards and ‘electronic purses’ will bring about a cashless society. However a research study in 1993 by Girobank and Research Surveys of Great Britain found that the everyday use of cash had actually increased over the past few years and that over 85% of payments in retail outlets were made in cash with over £19 billion of cash in circulation. Furthermore over 80% of those polled predicted that there would be little or no change to their personal use of cash over the next 5 years.