The means by which this data driven manager achieves his tasks on reports. Reports convey to the manager the following:

1. It gives an idea of whether activities under his sphere of influence are happening as per expectations. For example, when a production manager checks the production schedule and compares it with actual production in the factory. This is done by comparing it with the actual production report. In this case, the manager is trying to compare and see whether the production process is within control and that the production is as per expectations. Any deviations in the actual will indicate that the process is not within control and hence, corrective action is required.
2. It gives a clue or an insight into some bigger problem that might be happening within the organization. For example, if a manager notices that the attrition rate is going up sharply it might give him the insight that either the market for skills of his employees has become more competitive or that more players may have entered the market with the same skill set or that the salary levels of the present organization are way below prevailing market rates for such skills. This might lead the manager to delve deeper into the problem of attrition which is only a symptom of a much larger phenomenon. Such behavioral changes of his own workforce are prompting them to have lesser loyalty and focus more on monetary compensation.

Hence, we can see that a modern manager relies heavily on data to take decisions and the means by which he gets the information is through report. Reports are of many types.

Scheduled reports

These are reports that are generated regularly with respect to time. They are in the nature of daily report, weekly report or monthly report. They contain information that is of recent origin and help the manager to understand and analyze the information from the context of the recent past. These reports are the first line of reports which normally show the first signs of problems or opportunities that can be understood through the data.

On-demand reports

These types of reports are unscheduled in nature and are created based on the need of the managers for such reports. They help in analyzing a particular issue in greater degree of granularity. These reports are generally the result of a reaction to any event.

Exception reports

In management, exceptions warrant greater attention than any normal event. Exception reports are special reports that indicate to the manager that some control needs to be exercised to bring an issue under control. For example, if in a company the average absenteeism is two per cent and in the last week, the average absenteeism is twenty percent then an exception report is generated to make the concerned manager aware that something is amiss and needs attention.

Predictive reports

These are special reports that give the manager a sneak preview of the future. These reports give a scenario of the future and are very useful for planning.

Summary reports

These are general reports that aggregates data and provides summarized information to the manager so that he may get a macro view of an issue.

Regulatory and statutory report

These are reports created under the obligations to follow rules and statues. They are primarily meant for external consumption for the information needs of regulatory bodies. Thus, we see that the reports tell the manager the issue behind a problem and give him all the information he needs to take decisions. However, information can be of various degrees of value to a manager. A set of information that he already knows is’ of little value to him incorrect information has a negative value. So we must understand the meaning of valuable information.

Resistance to change is a normal human tendency. MIS when implemented, changes a lot of things within the organization. It ushers in a new way of working in the organization. It changes power structures, the way people view their work, changes skill requirements of employees, processes and also the entire organizational culture.

This change can cause problems in the implementation process, as there may be resistance to this change from employees. Moreover, the implementation of MIS involves migration of an information system from a controlled environment of design and development to a ‘real’ environment of an organization. Sometimes, information systems that work fine in a controlled environment fail to deliver in the ‘real’ environment. This may require some tailoring and customization of the system. The management should ensure that such minor glitches should not be used as an excuse by rumormongers to malign the new system.

Management should have a mature view that such problems are not expected in the implementation process, ensuring such technical issue remains a technical issue only and are not blown up into an organizational issue. A strong message from the top management favoring the new system thwarts such attempts at maligning the new system and hence is advocated. However, in spite of the best efforts some factors cause problems in the implementation process. The major factors that determine the degree of resistance that organizations face in implementing MIS are,

1. The degree of MIS driven change in departmental boundaries-any major change that changes the functioning of departments drastically is likely to be challenged or resisted by the department functionaries as it changes their way of working. This resistance should be anticipated at the design stage. Typically, if a BPR exercise is conducted along with the requirement analysis of the system then such exercises result in recommendations of change in business processes which result in changes in the organization structure or functioning of departments. Thus, the fact that such a change is on its way is known to the management well in advance. Hence, they should prepare the workforce for it.
2. Lack of organization culture supporting MIS-some organizations does not have a culture of information based decision-making. Implementation of MIS is such organizations are always a challenge, as the employees have to be trained to appreciate the importance of information. They become so used to judgment based decision-making that such training has very little impact. In some cases, it has been noted that even after implementation of MIS the organization culture has not changed and that managers continue to resist changes brought on by installation of MIS.
3. The degree of employee involvement in the MIS creation-this is a major issue in implementation of MIS. If employee participation is good then resistance to MIS is less.
4. The degree of employee involvement in the implementation of change along with MIS is a major issue. If the management uses a participatory approach towards MIS implementation then resistance to MIS is less.

The degree of MIS driven change in the informal system-if MIS changes the informal communication system completely then resistance is more. This informal communication channel is a source of power for some individuals. They resent their loss of power due to emergence of MIS as the sole authority for communication

Even though MIS has many benefits it has its limitations. MIS is sometimes considered a solution for every bane within an organization. While MIS may solve some critical problems but it is not a solution to all problems of an organization. The limitations of MIS may be stated as,

1. The MIS is as good as its design-MIS if designed in an improper manner does not serve the management and hence is of little relevance.
2. The MIS is as good as its users-if the users do not know how to leverage the information available from MIS then MIS is of little use.
3. The MIS is no good if the basic data is obsolete and outdated (for example, MIS will only facilitate garbage with information and in about garbage-out-process).

MIS when properly developed and used in an organization brings in a lot of benefits for the organization. A list of the benefits of MIS for a organization are:

MIS increases productivity

1. MIS reduces time, errors and costs associated with processing information.
2. To increase productivity, MIS follows Online Transaction Processing (OL TP). OLTP is the gathering of data as input, processing that input data and updating the data to create valuable information from this processed data.
3. Another area in which modern MIS improves productivity is by allowing customers to process their own transactions through the use of a Customer-Integrated System (CIS).

MIS enhances the quality of decision-making

1. MIS helps top management to do business in a better way, find solutions to problems/opportunities, or help them in decision-making by providing the relevant information.
2. MIS support for decision-making falls in two categories:
   1. 1. When MIS helps you analyze a situation by providing all the relevant information about the situation and then expecting you to make the decision.
      2. When MIS actually makes some sort of recommendation or giving some insight into what decision to take.

MIS improves communication and helps develop team work

1. MIS helps to manage information and facilitates communication between diverse teams.
2. A collaborative management information system is a specific system to improve team work.
3. One aspect of EDI is Electronic Funds Transfer (EFT) which allows for payment without physically sending money.

MIS can facilitate organizational transformation

1. MIS helps organizations to remain competitive or enter new markets and transform the way business is done.

Management information system is a set of systems which helps management at different levels to take better decisions by providing the necessary information to managers. Management information system is not a monolithic entity but a collection of systems which provide the user with a monolithic feel as far as information delivery, transmission and storage is concerned.

The different subsystems working at the background have different objectives but work in concert with each other to satisfy the overall requirement of managers for good quality information. Management information systems can be installed by either procuring off the self systems or by commissioning a completely customized solution. Sometimes, management information systems can be a mix of both, i.e., an ‘off the self system but customized as per the need of the organization.

However, before we precede any further we must have a clear understanding of what managers do in an organization and why they need management information systems. The former issue has already been dealt with at length in the previous sections. Only a brief overview is given here.

Managers are the key people in an organization who ultimately determine the destiny of the organization. They set the agenda and goals of the organization, plan for achieving the goals, implement those plans and monitor the situation regularly to ensure that deviations from the laid down plan is controlled. This set of activity ensures the smooth functioning of the organization and helps it attain its objectives. Hence, these managers are vital for a successful organization. The managers in turn conduct these activities collectively management functions. They decide on all such issues that have relevance to the goals and objectives of the organization. The decisions range from routine decisions taken regularly to strategic decisions, which are sometimes taken once in the lifetime of an organization. The decisions differ in the following degrees,

1. Complexity
2. Information requirement for taking the decision
3. Relevance
4. Effect on the organization
5. Degree of structured behavior of the decision-making process.

The different types of decisions require different type of information as without information one cannot decide.

They have common characteristics and even though their actual implementation in an organization may differ according to the needs of the organization, their basic characteristics remain the same. The information technology platform on which management information system is based may also vary in terms of complexity and scale but the technology component does not change the broad characteristics of management information system. Technology is only the medium through which the solution is delivered. Management information systems may consist of a set of information systems working towards the common goal of achieving greater efficiency in management decision-making for each level of management. Typically, management information systems deal with information that is generated internally. The in-house data is processed (summarized/aggregated) to create reports, which helps the management at different levels in taking decisions. Today’s management information systems have a data repository at the core, which is mostly in the form of a relational database management system. All in-house data (mostly transaction related) are saved in this database, which is itself designed on the basis of set rules. Over this data repository lies several tiers of logic and/or business rules which helps in creating an interface and the various reports for use of managers at different levels. The management information system is normally designed in order to achieve an information flow that is based on a ‘need to know’ principle. This means that any manager would be given only that type and kind of information for which he is entitled and for which he has any use. This means, that a shop floor supervisor may get the personal details of all people working under him but will not get to view the salary details of the CEO as he/she is not entitled to know such information. The floor supervisor will not get to see the personnel details of all employees working in the human resource department as he has no use for such information. This hierarchical rule-based information delivery to the different levels of management is put in place to avoid both information overload and to enable information security.

Many modern systems have come up in recent times to help the manager in their tasks, like enterprise-wide resource planning systems that is, basically, transaction processing/ support systems but comes inbuilt with a lot of best practices of the industry and helps in generating integrated scenarios for the managers at different levels. Customer relationship management systems help in the management of customers by creating profiles and making available complex analytical tools for processing customer data to the managers. Similarly, there are systems to help managers deal with supply chain data called supply chain management systems. All these modern systems help in achieving greater efficiency by making the job of management decision-making better and therefore, fall under the category of management information system.

Conceptually, management information systems and information technology are two very different things. Management information system is an information management concept. Indeed technologies will change and have changed in the past but management information system and its requirement and characteristics will broadly remain the same. Only MIS with changing time and technology regimes will have different technology platforms. In the early seventies MIS was mostly run on mainframe computers with COBOL programs. In the eighties and nineties that changed to a personal computer based solution using networking and with databases and 4GL tools. Today MIS runs on advanced computer networks with wireless connectivity with hugely advanced software tools but the broad characteristics of MIS have remained the same. In the sixties and seventies it was instrumental in providing information which helped in management decision-making just like it provides today. Only the degree and quality of information has improved. However, the character of MIS has not changed with changing technology. Technology has always been and will be a platform for MIS, However, the technology intervention to provide the platform for MIS has increasingly grown over time and some confuse MIS with the technology on which it runs. Technology has become an integral part of MIS but one must appreciate that MIS is a much larger concept, critical to management decision-making.

The nature of MIS is passive it only supplies information to managers. It does not actively lead the managers to a decision. The managers take decisions with the support of the management information system. The system only supplies the background information on which such decisions are based. The system does not provide active decision support. It does not have models to mimic the real life scenarios as a proactive system like the one the decision support system has. Even though this role of providing information is very important it is only an enabler for better decisions.

Managers take decisions based on several triggers and in several ways. Some managers are optimists and take an optimistic view of any situation, be it a problem or an opportunity. While others take a completely different view in the sense that they are pessimists at all times. They look at only the negative side of decisions. Some managers take decisions based on instinctive reaction. Some take decisions based on analysis of data. These data driven managers rely wholly on information systems to provide them with the necessary data and information in the form of reports. Nowadays, the prevailing view is that the data driven, analytics driven way of taking decisions delivers greater value to the organization than the instinctive feeling based decisions. In the instinctive feeling based decision-making approach, the judgment and experience of the manager plays the most important role in his choosing an alternative. This factis often misunderstood by the proponents of ‘gut feeling’ based decision-making supporters and has been beautifully described in a book written by Malcolm Gladwell titled ‘Blink’.

Hence, the contemporary wisdom suggests that managerial decisions must be taken on the basis of solid rationale and information. If the manager has complete information about a problem or opportunity, then he can take an appropriate decision. On the other hand, his decision will be based on gut feeling or judgment which is prone to personal bias and hence, is likely to be inaccurate. Therefore, managers in today’s world are more and more data driven rather than instinct driven.

MIS Functions

The broad functions of MIS are as given below:

1. To improve decision-making: MIS helps management by providing background information on a variety of issues and helps to improve the decision-making quality of management. The fast and accurate information supplied by MIS is leveraged by the managers to take quicker and better decisions thereby improving the decision-making quality and adding to the bottom line of the company.
2. To improve efficiency: MIS helps managers to conduct their tasks with greater ease and with better efficiency. This reflects in better productivity for the company.
3. To provide connectivity: MIS provides managers with better connectivity with the rest of the organization.

Characteristics of MIS

Management information being a specialized information system conforms to certain characteristics. These characteristics are generic in nature. These characteristics remain more or less the same even when the technology around such management information system changes:

Management oriented

One important feature of MIS is that MIS is designed top-down. This means that the system is designed around the need felt by the management at different levels for information. The focus of the system is to satisfy the information needs of management.

Management directed

Since MIS is ‘for the’ management it is imperative that it also should have a very strong ‘by the’ management initiative. Management is involved in the designing process of MIS and also in its continuous review and up gradation to develop a good qualitative system. The system is structured as per directions factored by management. This helps in minimizing the gap between expectations of management form the system and the actual system.

Integrated

MIS is an integrated system. It is integrated with all operational and functional activities of management. This is an important characteristic and- requirement for a system to qualify as MIS. The reason for having an integrated system is that information in the managerial context for decision-making may be required from different areas from within the organization. If MIS remains a collection of isolated systems and each satisfying a small objective, then the integrated information need of managers will not be fulfiller. In order to provide a complete picture of the scenario, complete information is needed which only an integrated system can provide.

Common data flows

Through MIS the data being stored into the system, retrieved from the system, disseminated within the system or processed by the system can be handled in an integrated manner. The integrated approach towards data management will result in avoiding duplication of data, data redundancy and will help to simplify operations.

Strategic planning

MIS cannot be designed overnight. It requires very high degree of planning which goes into creating an effective organization. The reason for this kind of planning is to ensure that the MIS being built not only satisfies the information need of the managers today but can also serve the organization for the next five to ten years with modifications. Sometimes when the planning part is done away with, systems tend to perform well in the present but they tend to become obsolete with time. Planning helps to avoid this problem.

Bias towards centralization

MIS is required to give ‘one version of the truth’, i.e., it must supply the correct version of the latest information. There is a requirement for the data repository to be centralized. Centralized data management helps MIS to exercise version control as well as provide an integrated common view of data to the managers. In a non-centralized system, data will get entered, updated and deleted from the system from different locations. In such a case it becomes difficult to provide correct information to managers. For example, in a decentralized System if a person superannuates from an organization and his superannuating is only recorded in the human resource system but not communicated to the finance department system, then it is quite likely that his salary may be generated by the finance system for the next month. A centralized system where data in entered, updated and deleted from only one location does not suffer from such problems. In a centralized system, the superannuating employee’s details are deleted from the master file from which all departments’ access data, thereby eliminating the risk of generating his salary for the next month.

Management performs several roles within an organization. Even though almost all managers perform multiple roles within an organization, some roles are performed by specific set of managers at certain levels. Before understanding the roles played by the management in an organization we must appreciate that management is the life blood of an organization. Managers get things done efficiently and effectively (mostly by others) thereby adding value to the organization. An organization without managers would have no cohesion, no purpose and no direction. It will simply collapse. Management helps in not only getting things done but also ensures that the organization works towards a common purpose and remains organized in this endeavor. Several management thinkers have dealt with this subject of role of management.

Roles of Management

A study (Minztberg 1980) and other studies have shown that the roles of management can be divided into three major categories; interpersonal, informational and decisional. In fact, ten roles of management have been pointed out in the three categories but the most important has always been decision-making. The roles of management under different categories are:

1. As a titular figurehead whose role is only symbolic-the person who performs this role is normally widely respected within the organization and is known for some special quality or contribution to the organization or society at large. Even though the person is a figurehead and does not enjoy a lot of actual authority and power, he/she helps to galvanize the employees to work for a greater goal. For example, Narayan Murthy, the celebrated CEO of Infosys was primarily responsible for changing Infosys from being a small IT firm to a global enterprise. When he expressed his desire to retire as CEO, the board of Infosys impressed upon him to work as their Chief Mentor. Even though this was just a titular figurehead position, a vast majority of employees continued to get inspired by his actions and word. This kind of role is often very important for continued success of an organization. Management performs this role.
2. As a leader who takes responsibility of getting things done by inspiring and motivation his people-in this role, a manager works like an inspirational guru to people in his domain of influence. Normally top executives or very successful companies have played this role with elan. CEOs like Andy Grove have not only led from the front but have inspired and motivated others to give the extra bit for the company to create global enterprises. This role is sometimes performed by the management at a much junior level when managers lead by example rather than by the power and authority vested upon them. Several managers who have worked in shop floors have been known to inspire workmen and get things done by inspiring and motivating people.
3. As a liaison agent who interacts with social networks for business development and other related activities-in this role the manager works like a salesperson and representative of the company, interacting with and networking with people to get more business and other related goals.
4. As a control monitor who controls the organizational activities-in this role, the manager is a control master, who keeps a close tab on activities within the organization and corrects any deviations from the planned result. A manager plays this role when he is in a middle level position. He exercises his power to control the organizational system and regularly acts on feedback.
5. As an information disseminator who relays information from top down and sometimes also from bottom up-the manager needs to be a good communicator to be able to achieve this. In this case the role of the manager is not only to act as post office but to ensure that the information that is being disseminated in being understood the all concerned.
6. As a communicator/spokesperson who communicates with the environment-in this role the manager works like a public relations specialist for the organization and communicates to the market, buyers, sellers, regulators, etc., key issues about the organization.
7. As an entrepreneur who hunts for opportunities and initiates changes-in this role the manager is the most effective. In this role the manager works by driving a particular issue and by taking up opportunities that might crop up.
8. As a trouble-shooter who solves organizational problems and does mid course corrections-in this role the manager works as a control agent, who ensures that corrective action are taken at appropriate time to thwart any problems.
9. As allocator of resource who decides on the quantum of resource for activities-in this role the manager decides on the quantum of resources required for completing activities under his domain.
10. As a negotiator who makes deals happen for the organization-in this role the manager works as the sole representative of the organization and works with the best interests of the organization in mind.

All managers perform these roles in their regular course of work but some managers are biased towards certain roles that they perform with great elan.

Functions of Management

Management professionals and management as a profession is highly specialized: In an organization managers are required to play different roles of a leader, mentor, follower, etc. they do so under a particular domain. These functional domains are required as the tasks that management professionals execute require specialized skills that can only be honed after years of experience. MIS requires the understanding of this functional classification of management to provide meaningful information to managers. Functionally, management can be segregated into the activities that an organization needs to perform to stay afloat in business namely, finance management, marketing management, operations management and human resource management. These are the functions of management that can again be sub-classified into more specialized activities.

Functionally, management can be segregated into several compartments each with specific specializations. Normally, management is a term loosely used to identify people within an organization who have the authority and capability to take· decisions (mostly functional for middle and junior level but strategic for top level). The various functions are given briefly below. It may be worthwhile to point out that managers play their required roles under each function.

Marketing management

Marketing is the activity of reaching out to customers, communicating the offerings of the organization to them, selling the product or service and ensuring their satisfaction. It is the activity through which an organization can keep its ears close to the pulse of the market.

It generally encompasses the following sub-activities:

1. Sale is the activity of selling products or services of a firm. It is one of the most important activities of marketing and most organizations employ the maximum number of employees within the marketing department. Normally sales function deals with the management of the channels of sales, i.e. managing wholesalers, retailers and stockiest, etc., to ensure that the product or service reaches the consumer. Some authors argue that selling is a push activity for marketing in the sense that selling normally involves a top down approach. Sales department is the department that lies at the interface between the customer and the organization. We can conceptualize the sales department as lying at the boundary between the organization system and the environment of the customers.
2. Advertising is the activity of showcasing the positive aspects of a product, service, brand or company in a medium of communication like electronic or print medium to create a need among consumers. Advertising is essentially a pull activity. It creates a need among consumers and thereby increases the revenue of the organization. Sometimes advertising can also be associated with creating an image for the organization or to send a message to the consumers. It is a tool at the hands of marketers to promote their product or service. However, advertising is not targeted in the sense that the communication from the company to its consumers is not targeted to the target consumer but is sent to all consumers in general. This ‘carpet bombing’ kind of strategy is a drawback of advertising.
3. Publicity is that activity that also results in greater revenue for the company. It is to ensure that positive articles get published or broadcast so that consumers are convinced of the efficacy of a product or service. Normally it is done in a way that the article or broadcast does not have any direct association with the company or brand. Like when a prominent nutrition specialist writes a positive article about a health drink by writing that it reduces cholesterol, then people reading the article may rightly infer that this is the honest opinion of the nutritionist or the publication but it may instead be promotion by the health drink company. These kinds of tools are used to create awareness and build customer base.
4. Product management is the activity of managing the entire life cycle of a product. It involves managing all activities associated with the product and it assumes that the organizational structure would enable such activity.
5. Customer Relationship Management (CRM) is the activity of fostering loyalty of the customer towards a brand or product or a company. It encompasses activities that result in a greater understanding and knowledge of the customer. It is the activity that enables a company to have a longer term view of customers rather than having a short-term view. The activity of CRM is based on the understanding of the customer as a person who has a long-term relationship with the organization rather than only at the time of sale.
6. Market research is the activity of conducting research on the market to find out whether the strategies of the company are bearing results or for planning strategies. It involves a lot of sampling survey and is applied to all aspects of marketing activity such as to find out if an advertisement campaign has been successful or whether a class of product will have a market, etc. This activity is more prone to mathematical and statistical treatment and involves a lot of customer interaction.
7. Pricing is the activity of setting the price of a product or service. It is normally a strategic decision as it is done with a view of beating competition.
8. Packaging is the activity of creating suitable packages for consumers so that the consumer is able to but the product or service such that the profit of the organization is optimized.

Finance management

No organization can survive without management of its finances. Finance is the function that manages the financial resource of the organization. It is responsible for management of receivables and payables, management of capital expenditure, costing and budgeting, accounting for all activities of the organization, management of taxes, etc. In short, finance is the function that helps us measure the value of the organization in monetary terms using several accounting, costing and mathematical tools. Financial management includes:

1. Working capital management is the activity of managing the working capital finances of the organization. Working capital is the capital required to run the organization on a regular basis. It is used to pay for salaries and materials. It normally is in the form of a short-term debt.
2. Receivables and payables management is the activity in which the receivable and payables of a company are managed. It inevitably results in the management of creditors and debtors and helps the management to take suitable decisions about both sets of people. This is a very important activity of finance and is done with due diligence.
3. Budgeting is a strategic action of finance. It is the activity by which the quantum of money spent on each activity of the organization is set. This is a complex exercise and one that requires a strategic view of the organization for the future.
4. Capital expenditure management is an important activity to take care of the capital expenditures of the company and make a plan for such investments. These investments are inevitably linked with the cost of capital.
5. Auditing is the process of controlling the financial systems. It gives us the variations between the planned and unplanned financial decisions. It also serves as a tool for taking care of malpractices in the firm by exposing frauds within the system. It also throws up any deviation from the general rules of finance as laid down by the company. These deviations if analyzed further and found serious enough warrant attention by top management who fix responsibilities on people for such deviations and corrective action follows.
6. Managing external borrowings, etc., is also an important function these days as more and more companies are borrowing from outside the country. This is a specialized task involving managing foreign exchange etc.

Operations management

Every organization has an objective for existence, an offering in the form of a product or service. Management of other activities is meaningless without any offering. Operations management is the function that helps an organization to manage the various activities related to the creation of a product or service. The various activities associated with the operations management are:

1. Production management is the activity of managing the production process of a firm. It involves the planning of production in different time periods, the planning of capacities, monitoring of the production process so that a control can be exercised over the production process.
2. Maintenance management is the activity of managing maintenance of machines in a firm. Different companies have different maintenance policies.
3. Quality management this activity is considered very important in most manufacturing and service organizations. It is the activity that measures the final output of the finished product or service against the standard. Any deviation from the standard is considered to be an aberration and corrective measures applied to rectify the same. Quality management itself has several dimensions. Statistical quality control is a form of quality management that takes a view of quality that is measurable. ‘Total Quality Management’ is the all encompassing improved view of quality management that considers duality as a comprehensive package of managerial initiatives that broadly aims at improving the quality culture of the organization.
4. Project management is that activity that helps management to manage projects efficiently. It focuses on managing protect from the aspects of time and resource management. Precise mathematical techniques are used in this activity to manage projects.
5. Inventory management is the activity to manage the raw materials and finished goods inventory of the company. This is an important activity as a lot of monetary resources are tied up in these areas. Also, any shortfall in the raw materials may trigger a cascading effect on production and hence, this activity is closely monitored. Vendors who supply the raw materials are carefully chosen and nurtured so that they perform their tasks with a high degree of reliability. Also, the lead times of the vendors are closely monitored and updated regularly to reflect the current status. A lot of mathematical models are used for managing this function.

Human resource management

The most precious asset of any organization are its people so, managing them well leads to growth and prosperity and mismanagement results in losses. In fact, most of management literature is about managing this precious resource. HRM consists of:

1. Recruitment is the activity of selecting the right people for the right job. A selection process is used to select the right kind of people from a universe of interested people for the job/s in the organization. The recruitment activity is a regular activity in an organization as the organization, being a growing entity requires more and more people to run its business and also because people leave the organization for various reasons. This process of people leaving an organization is collectively called attrition. Recruitment is the process to neutralize the attrition effect and also to ensure that there are enough people to take care of the growth activities of the organization. It is an important activity and employs different techniques for attracting the right people for the job/s in the organization. The techniques employed are advertisement of jobs with enticing job description, salary details, etc., searching for the right people in online search engines, targeting potential employees through contacts and networks, employing consultants and agencies who have a database of the right kind of people for the job.
2. Training and development is the activity that involves the development of employees in terms of skills, personality, behavior, etc., this activity is an ongoing activity within an organization as most organizations believe in continuous improvement and in order to improve constantly, one must be trained. This activity, even though a regular one is considered in some organizations as not being very important. However, most good companies take this activity very seriously as it holds the key to developing the human capital of their employees that in turn results in improved performance of the organization.
3. Compensation and benefits management this activity is required to fit the compensation and benefits of employees so that the employee is satisfied in terms of salary and benefits. This is a very crucial activity as many things have to be taken into consideration in order to do justice to this kind of work. Issues like seniority, fairness, performance, etc., are very important in conducting this activity properly.
4. Performance management is an activity that is a controlling activity. It is required to understand the level of performance of the employees in an organization. The lesser performing employees are normally put through a training process and the high performance employees are rewarded so that they feel good and continue to serve the organization in future with same performance.
5. Separation Management is another sub function of HRM in which managers manage the separation of people from the organization. This function is exercised in cases of superannuating employees, for employees who have resigned from the services of the firm and for employees who have been for some reason terminated from their services.

Management is the invisible force that keeps an organization going by continuously performing the tasks of planning, organizing, controlling and leading. Management plans for the goals and objectives of the organization, organizes men, materials, technology, money and other resources to enable the organization to attain the set goals and objectives, controls activities to ensure that everything goes according to plan and that there is no deviation from it and leads the organization to attain greater achievements. Without management, an organization cannot survive. The issue of management is therefore most important for any organization, business or otherwise.

Management in business organizations has traditionally always focused on the four levels of business change and success namely, business strategy, organization structure, business processes and people. However, a fifth level has now been added to the existing four information levels. Information has not only become an additional lever for change and success of a business organization, but has become the most important key asset for it. The reason for the emergence of the importance of information in management is the positive role it plays in improving the quality of decision-making. Information helps the management in conducting its tasks efficiently and helps in decision-making, thereby making it an important asset. Also, unlike any other resource information resource cannot be duplicated by competitors as information is proprietary to an organization and hence competitive advantage gained by leveraging the power of information is very hard to replicate by competitors.

                Management with information ensures a smooth process driven organization climate as all management decisions are based on information and hence (by definition) are based on a proactive decision based approach. This ensures that problems are nipped in the bud and opportunities are taken even when others are unable to spot one. Management with information also ensures that decisions are based on objective criteria and are not ‘gut feeling’ based. This ensures fairness and boosts confidence of employees on the management. Business organizations that manage with information successfully achieve the following:

• Minimization of risks – information helps organizations to continuously monitor and control the following entities:

1. Activities (business activities)
2. Situations (industrial dispute, etc.)
3. Clients
4. Competitors
5. Markets
6. Employees
7. Technology, and
8. Government (new regulations, etc.)

In short, information helps the organization to keep a tab of all likely or potentials areas of risk. Since with information, organizations can monitor the potential risk areas, it results in a shorter lead time for the organization to react to risks thereby helping the organization.

1. Reduction of costs – management with information leads to reduction of costs (by gaining information on wastage and acting to eliminate it) by eliminating wastage and by improving efficiency and performance.
2. Addition of value – information helps organizations to add value to customers by improving the offerings and by taking measures to ensure customer delight.
3. Creation of new ideas and innovation – information and its flow within an organization enhances innovation and helps the organization to see the market reality in a better and more candid manner. Innovation is enhanced by increased information as increased information leads to greater understanding of key developments leading to innovation and new ideas.

Management with information is a continuous process and in many ways is a different philosophical approach towards management. It needs strong leadership and a commitment from top management to become a. successful strategy in the organization, it helps the organization to remain healthy and efficient.

Quality of information is an important concept. Information quality is a multi-attribute concept. If the attributes that define quality of information are of good quality or of high value then the information is said to have good quality. The attributes of quality of information are:

1. Timeliness- The speed at which the information is received. Normally, faster the information better is its quality.
2. Appropriateness- is the suitability matching of the receiver and the information, more the suitability of the information to the receiver, better its quality.
3. Reliability – the reliability of information is a key attribute of quality. Only if the information is reliable is it of any use. The understanding of reliability comes from past experience, the standing/reliability of the source, the methodology adopted to acquire and process the information and the channel of delivery.
4. Accuracy – is the correctness of the information. Normally, the higher the accuracy of the information, the better is its quality.
5. Completeness – is the measure of comprehensiveness. It is required to ensure that the information provided gives the complete picture of reality and not a part of the picture.
6. These attributes define the quality of information. A high score on each of the attributes indicate that the quality of information is good.

Information Overload

Information overload is a condition where there is more information than one can handle. The concept of information overload has been around for over a century but its impact is being felt in today’s times as never before.

Information overload is a huge problem for managers as it affects the quality of their decision-making. A good management information system ensures that information overload is avoided. Information overload leads to both psychological and physiological problems for the receiver and brings down the quality of decision-making. In today’s organization this is a major issue as it has the potential to destroy a lot of the value created by a good information system. System designers should be careful about this issueand should strive to create one version of the truth all across the organization. This helps to reduce information overload.

The value of information is a very slippery concept as information per se does not have any universal value. Its value is related to the person who uses it, when he uses it and for what he uses it. Any assessment of the value of information is therefore related to the value of the decision-making supported by such information.

For example consider two persons lost in the Sahara desert. One person has an adequate supply of drinking water (more than he could desire) and another has exhausted his supply. If one were to approach these two individuals with information about a drinking water well in the surrounding, such information will obviously have greater value for the one who has exhausted his water supply. For the one who is thirsty, this information is the most valuable piece of information for him at that point of time as it will determine if he will survive. If by chance the information reaches this thirsty person late and he dies of thirst, then the value of the same information becomes zero. So we can see that the same information can have different value for different people at different points in time. Hence, it will be fair to conclude that value of information is relative. There is no absolute value of information.

                However, the normal mathematical and economical explanation of value of information suggests that if an event occurs whose expectation was low and information of its occurrence is known then such information is valuable. For example let us say that the reader of this text gets the information that an earthquake of 10.5 magnitude in the Richter scale is going to hit India and the epicenter of the earthquake will be the very spot on which he is located, then that information is more valuable to him than the information (say) that he has to pass his BCA exam to get into the MCA course. In the former case the information is more valuable to him as he is not expecting it but in the latter case he already knows the information with certainty and expects it fully and hence the value for such information is less. All market mechanisms work on this model of information. This has already been dealt with in the earlier chapter and as Eq.1 suggests, the value of information of an event is the negative logarithm of the probability of occurrence of the event. Therefore, the more unlikely the event the more its information value, if communicated correctly. This is also exhibited in our behavior as eons of evolutions have shaped us in a manner that we tend to attach more value to unlikely events. In a game setting for example, say a horse racing game, if the odds of a horse winning the race are more then the payoff for that horse is less. Similarly, if a stock in the stock market is likely to outperform the market then the price payoff for that stock is not high, but if a stock that is likely to underperforms, performs beyond expectation, then the price payoff become very high. Thus, we can that the issue of value of information is a complicated one.

Normative Value of Information

Marschak (1971) and McGuire (1972) made seminal contributions to this field of work. Decision theory has developed this concept further and the basic assumption is that we always have some preliminary information about the occurrence of events that are related to our decisions. This information or knowledge is represented by an a priori assignment of probability of occurrence to the event and hence a calculated payoff. The a priori probability might be objective or subjective as the case may be and with the knowledge of additional information the probabilities are modified resulting in a change in the expected payoffs. This approach is however, only good for theoretical discussions as its practical applicability is poor. The problem for such cases has to be highly structured, which is rarely the case in management.

Subjective Value of Information

It is the subject view of the information available. It is the subjective perception or impression of the information. This subjective value approach varies widely with individuals. In the subjective valuation of information, no probabilities are calculated. Subjective value of information is the person’s (receiver’s) comprehensive impression about the information content.

This issue has been dealt with in each and every MIS text. The reason is that this issue is important from a conceptual standpoint in the study of MIS. The concepts of ‘Data’, ‘Information’ and ‘Knowledge’ are interlinked. In fact, data, information, knowledge and wisdom have been the building blocks of systems thinking and are sometimes referred in literature as DIK hierarchy. Data is raw facts, which is not of much use per se. When this data is processed it becomes information.

A simplistic way of connecting the above concepts is to consider information as the understanding of relations in the data and knowledge as the understanding of patterns in the information.

The management of information is largely the efficient management of data, which are the basic building blocks of information, If the data is not managed properly, information will not be generated, So even though data by itself is meaningless, it is vital for information management Poor data quality leads to a situation commonly known as ‘garbage in, garbage out’, where the information coming out of processing the data is also as meaningless as the data to start with was useless. In fact, the subject of information management largely deals only with the strategies for managing data.

Deriving knowledge from information however, is a more difficult challenge. Information can be stored in specific systems to create organizational memory and organizational learning. The problem with managing knowledge is that it is largely contextual with a strong experiential bias making replication a big problem. Knowledge management is an issue that needs detailed discussion, which we shall revisit later.

Consider the following statements:

1. I have two boxes connected by wires.
2. Box one is moderately heavy and boxes two is lighter.
3. Box one has a glassy front view with 3-4 buttons in front
4. Box two also has 3-4 buttons but no glassy frontal part.
5. You usually find the boxes in a study with smaller gadgets attached to it through wires.
6. Gadget one has a lot of push buttons with alphabetical and numerical characters printed over each button and the other gadget, gadget two fits into a palm and has a roller ball underneath with two buttons on top.
7. When a button of box two is pressed, box one initially shows characters in the frontal glassy part and then lights up like a television.

Can you guess what it is?

Yes it is the description of a personal computer. Somewhere, while reading the statements you could match the pattern of a personal computer’s description with the statements above. When you started reading the statements in a sequence, the statements must have meant nothing at all to you but somewhere you could match the pattern based on your knowledge and then on, the other statements were only a confirmation of your understanding. However, if you would not have seen a computer in your life, you would not have been able to identify the statements as describing a computer. This is what knowledge is. Knowledge helps you to make meaning of the information at your disposal. Each statement is information as each statement is complete and has meaning. However, the value of such information is very low as it does not convey any decision-making .value to you. The fact that there are two boxes and two gadgets attached to the boxes are data which in themselves convey neither information nor knowledge.

Human beings have known information and its relevance to their existence from the beginning of human civilization. Our instincts and intellect have developed and evolved to take advantage of information. However, we have been unconscious about the role it played in human lives till the early twentieth century.

Only in the later part of the twentieth century and specifically in the seventies and eighties has the role of information come into focus. With the success of the US based firms, like Bloomberg, information began to be taken seriously in business organizations. Today information is considered as the most important resource in a business organization. Information is required in business to serve a host of purposes ranging from the most critical, like decision-making, strategizing, planning, to the mundane, like operational control, automation. In some futuristic business organizations, it has assumed the role of a differentiator, giving competitive edge to the organization. Information management has therefore, become a very important task in modern business. Business organizations invest heavily to install modern information management systems. These systems are housed within a computerized environment more popularly called information technology platform. The requirement for technology in information management stems from the dual need for ‘timely’ and ‘accurate’ information in today’s modern business.

Meaning of Information

Information and the understanding of its value lie at the core of management information system. Information is quite distinct from data, even though the two concepts are interrelated. The concept of information as an important resource began to take root from the late eighties. Management practitioners began to deliberate seriously on the issue after the huge success of Bloombergin the eighties Bloomberg started with the modest business of analyzing the financial results of different US companies and providing analyzed data or information about the financial performance of these firms to brokers in the stock market for a price, thus starting the first information business in the information trading business. Different forms of such information based business have evolved since then and today, information is not only regarded as a resource but is considered as the most valuable resource. A resource which if used properly may result in competitive advantage for the firm.

We are instinctively alert for ‘valuable’ information. However, the human brain has evolved to understand that there is different degree of ‘value’ of information (which the brain unconsciously values). The human brain works in a way that it prioritizes information according to its perceived value, most often this unconscious valuation mechanism in our brain is correct, more so in the case of instinct based information. For example, let us assume that a driver notices a child suddenly crossing the road and evaluates that he will hit the child unless he stops and at the same time he feels an itching sensation on his forehead. In this case the brain of the driver prioritizes the two different information that receive from the different sensory inputs, it reacts by sending a signal to the driver’s right foot to press the brake pedal to stop the car and only after the car stops will the brain react to the itch. We unconsciously do this everyday. Evolution has taught us that information has a context and hence different degrees of value. We exhibit the same behavior of prioritization of valuable information in taking business decisions. Sometimes the value of information is evident but in most cases the value has to be mined out. The value that information delivers for business can be of several types. For example, it may be the launch date of a competitor’s product (kept secret by the competitor) or it may be the total sales of the organization made in a particular market segment in a specific time frame. In the former case the information is very straight forward (it is just a few pieces of data) and the difficult part is to get a source for such information (the basic data is very difficult to get and may well be available only through industrial espionage). In the latter case the data is available in abundance and information is created by processing it and the difficult part of the information creation is the processing part not the availability of data, which of course is important as well but not as important as in the former case. The subject of information as used in business organization deals mostly with the latter case, in which the organization’s own data is captured, stored and analyzed to create information for decision-making. Information of the former type is mostly dealt with through industrial espionage.

Information-Mathematically

Mathematically, information may be defined as a function of the probability of occurrence of an event. The information theory literature has been developed by C.E.Shannon, ‘Norbert Wiener and others. To understand information in a mathematical way, let us consider an event E with probability of occurrence p. Information is of greater value if the probability of its occurrence is closer to 0 than 1. For example, if someone were to convey that the Sun will rise in the East tomorrow, then would we consider this message to be ‘valuable’ information? No, as this event (i.e., Sun rising in the East tomorrow) is certain (and hence has very little, almost no information value), but if on the other hand, if someone were to convey the message that in the next five minutes an earthquake would hit with its epicenter at the very spot on which the reader is sitting, then that piece of message would have a much greater information value as the probability of its occurrence is much less (and hence consequently, its information value great). Thus, we can see that the greater the probability of occurrence of an event, the lower its information. This is what Shannon has defined mathematically as,

h (p) = -Iog (p), where 0 < p ≤ 1

h (p) is the measure of the amount of information (also called information function measured in bits).

p is the probability of occurrence of an event.

We can see that h (p) is a decreasing function whose value varies from ∞(when p is 0)

to 0(when p is 1).

The value of information comes down exponentially as p increases. This means that as events start happening on expected lines, information about such events start to diminish in value. When the event is certain with probability of occurrence at one, then its information value becomes zero.

Entropy

Entropy is a concept in physics, which is a measure of the degree of randomness in a system. Shannon (1949) suggested that the concept of entropy in information theory. Entropy in information theory is the mathematical expectation of information of the occurrence of one of the events when a set of events is considered.

Let there be n events E₁, E₂….E_n, with probabilities of occurrences as P₁ P₂….. P_n Where all probabilities are greater than 0 and the sum of all probabilities is one.

Now, Entropy function is defined as,

                                   n                            n

H(p1,p2,…..pn) = – ΣP₁ logp₁;p_{1 ≥0}, Σp₁ = 1

                                  i=1                         i=1

It is clear, that entropy is a measure of expected information. Sometimes entropy is also considered as a measure of uncertainty.

Business and business environment have changed dramatically in the last one and a half decades. The transformation has been nothing short of being radical. Concepts and issues that were centre stage a decade back are now irrelevant and have been replaced by new ones.

A liberalized, globalize and open environment for business and commerce exists today in this new era. New products and services have replaced older ones and competition has become more intense and the churning in the marketplace has resulted in the creation of new market leaders. Customers have become aware and governments have brought in progressive legislations and the pace of international business integration has increased. Globalization has made geographical boundaries meaningless, the Internet revolution has changed the way of life and commerce even the internal functioning of businesses ,have changed with less and less hierarchy, a more open culture, easier and transparent communications, increased expectation of faster delivery and greater focus on corporate governance.

In short, we live now in a completely new order. This new order in which we live is ruled by the power of information. Information and technology that helps in managing information have worked as the catalyst for this change. The change is by no means final. In fact, this process of change is likely to intensify in the years to come.

                Managers who run businesses are always tuned with the market realities so that they can react with minimum time and effort in case any problem or opportunity presents itself. The changes sweeping through the business and economic environment have forced business to look at newer ideas to bank on and thrive. One of the ideas reinvented in the modern business era is the management of information, not just for reactive decision-making but for proactive decision-making to embrace the changes in the marketplace and turn threats into opportunities. However, before we proceed any further, let us take a look at the major trends in modern business environment that have forced management thinkers to take a new look at the management of information.

Increasing Competition

The most important trend in the modern business environment is the increase in competition. Competition has forced businesses to become more efficient and effective. More and more corporate entities are obsessed with the efficient use of its resources to beat competition. Capital is freely flowing to low-cost (but not necessarily low quality) manufacturing and servicing hubs, the world over. Economies of scale have become important along with the productivity of capital and labor. In fact, most of the measures that a business entity takes today are with a focus on competition. The main reasons for this increase in competition are due to:

Globalization and Liberalization

Businesses want to derive value in any location or in any country by leveraging a wage arbitrage opportunity or creative labor force or business-friendly government policies or low cost scale manufacture/service to create value for the shareholders. The world has indeed become flatter in the last few years.

Market Dynamics Favoring the Efficient

The markets have become demand driven. Customers today have greater choice and hence demand for better quality at a lower price, which in turn favors those companies which are efficient in their use of resources as they can deliver a better quality product at a lower price.

The Fast Pace of Recent Technological Change and Innovation

The recent technological changes in information technology, Very Large Scale Integrated Circuit (VLSI) design, and nano technology and biotechnology space have altered many market equations. Disruptive technologies have leveled the playing field and made competition difficult for established companies and easier for start-up firms. Innovation has now become the new tool for gaining long term advantage in the marketplace. Top management now routinely focuses exclusively to bring in innovation in their products and processes.

Increased Information Exchange

It has resulted in a free flow of information about markets, competitors, strategies and alternatives making competition all the more difficult.

Increasing Uncertainty in the Marketplace

The fast pace of technological change and innovation has resulted in uncertainty. Businesses are continuously alert to changes in the market place. Disruptive technologies get developed faster and the life cycle of a product/service gets shorter every year. Gone are the days when a company had a blockbuster product/service that it could sell for years together. Today alternatives get made in shorter time and from the most unexpected competitors and locations of the world. This competition from unknown competitors and from unknown technologies and products creates a sense of uncertainty among businesses. The manner in which business is being conducted is also adding to the uncertainty. Market meltdowns like the recent global financial market meltdown and slowdowns strike markets without any warning which creates a general feeling of uncertainty. This uncertainty has to be met with greater capacity to absorb external shocks in the organization and by reducing the reaction time to changes in the marketplace. Information management becomes a crucial weapon in such environs where uncertainty is a certainty. The value that an organization gets from investments on information management in such situations is immense as the difference between success and failure may be just a small piece of crucial information provided by an efficient information management system.

Increasing Globalization

Globalization is also another important trend in today’s business. Geo-political boundaries have lost much of their relevance in business due to globalization. Today a North American business house can source its raw materials/components from a country in sub-Saharan Africa, manufacture/assemble in China and sell it in Europe or Japan. The barriers have fallen. Capital flows freely in different forms from one country to another and the primary considerations are lower costs and increased efficiency. Corporations have a more pragmatic view of business and focus only on increasing value. Globalization is a force in modern business that is growing with every passing day. Organizations are on the lookout for global markets, global manufacturing hubs, global logistic hubs, global labor force and global presence. Today a business entity tries to scale up its business to a global scale as soon as possible. The idea is to find lucrative markets in different corners of the planet, create products or services at any location where cost of creating the product or service is lowest and then connect the market with the manufacturing/servicing hub by a global supply chain. Globalization has today transformed from being a business philosophy to a unifier. Several books have been written on the effects of globalization. Globalization has brought opportunities as well as threats to business. Those businesses that can link themselves to this huge global business in any manner (in any part of the value chain) stand to gain from globalization but those that choose to remain outside the ambit may face difficulties. The opening up of the global marketplace for commerce has also brought in threats. Businesses can no longer remain in their comfort zones without having an open-eye to global competition. Local businesses face increasing competition from global players. They can choose to go global themselves or remain local and face competition. Whatever the strategy, one can no longer ignore globalization. It has forced businesses to become more efficient. It has changed the perception of customers and made them more demanding. It has made shareholders hungrier for profits and changed the fundamentals of doing business in many ways. It is here to stay and businesses have to be acclimatized to this modern trend.

Increasing Tendency of Outsourcing

More and more businesses are trying to beat competition by staying focused on their core functions and competencies and outsourcing the rest of the non-key functions to specialized firms. Specialized firms have sprung up (especially in low cost countries like India) that have made managing the non-core businesses of other companies their core competence. Special firms which are called Business Process Outsourcing (BPO) firms have created competencies in voice and non-voice customer relationship management, legal process management, etc., so that they can handle these ‘non-core’ processes of other companies at a fraction of the cost. This helps the outsourcing companies to remain profitable by lowering costs and improving quality of its key and non-key areas. Its key functions are now free to be given complete focus within the organization and its non-key functions are now key functions for someone else Le. the outsourced entity. The tremendous wage arbitrage opportunity provided by transferring these non-core jobs to developing countries makes it a lucrative proposition for companies in developed countries. This has been made possible by the great advances in information and communication technology that have made territorial distance meaningless. It has made the service delivery independent of boundaries. Anyone located anywhere can deliver service anywhere making the service delivery independent of boundaries.

Outsourcing can be of different types. Outsourcing can be voice-based or non-voice based. Sometimes outsourcing can be such that the outsourced organization works from the premises of the client organization. Most IT outsourcing are of this type. Some of the outsourcing jobs being carried out today are:

1. Direct selling by tele calling-Outbound calls
2. Direct selling by tele calling-Inbound calls
3. Customer grievance handling by receiving calls
4. Customer support by tele calling
5. Medical transcription
6. Legal process outsourcing
7. Technical support to sales team through inbound calls
8. Billing support and management
9. Accounts management
10. Human resource management
11. Recruitment assistance
12. Marketing analytics support
13. IT application development
14. IT maintenance
15. Entire IT management
16. IT hardware support
17. IT software support

And a host of other areas that are cost intensive and require specialization.

Outsourcing requires special managerial skills. Contracts management and time management are crucial for managing outsourcing. Constant monitoring of the outsourced partner needs to be adhered to but at the same time suitable vendor relationship needs to be maintained. Sometimes outsourcing may involve management of entities over different geographies with different cultures and time zones. From the perspective of the outsourcer, outsourcing involves challenges like,

1. Ensuring quality of output
2. Ensuring timely output
3. Ensuring zero cost escalation
4. Ensuring minimum customer complaints
5. Ensuring synchronized service over different time zones
6. Ensuring zero stoppages
7. Ensuring six sigma

All this requires a very good relationship management with the outsourced vendor. It requires understanding of the vendor’s capability and a realistic assessment of the achievable goals. It also requires constant communication to ensure that the information flow across the vendor and the client is not disturbed. It also requires an understanding of different work cultures to anticipate problems before they occur. It also requires a bit of legal knowledge of the laws of the land and also of the laws of the outsourced country, particularly with regard to contract laws, workplace related laws, labor laws, privacy and IT laws and security and IPR related laws.

From the perspective of the outsourcing agency the skill requirements are:

1. Service orientation
2. Ensuring six sigma
3. Ensuring proper client management
4. Ensuring zero stoppages
5. Managing a large body of young and educated labor force
6. Managing a large IT platform
7. Ensuring efficiency of service level
8. Ensuring polite and amiable customer handling

Outsourcing is a controversial issue. In developed countries, there is opposition to movement of jobs to low cost countries outsourcing. Indeed in countries like the US, outsourcing is a major political issue. Even though there has been a lot of hue and cry over outsourcing, several studies have shown that outsourcing not only results in enormous cost savings but also results in improved service delivery. Outsourcing is a natural corollary of the process of globalization as more and more businesses try to become globally competitive, they will search for ways to reduce costs and improve service. Outsourcing provides them a wonderful opportunity to do just that.

Reducing Hierarchy and Improved Transparency

Businesses have themselves transformed over time. The organization structures of business organizations are becoming flatter reducing unnecessary hierarchy. The popular corporate culture within organizations, both in the West and in developing countries like India and China has changed dramatically to a more informal first name, efficiency focused and work driven culture. Focus is now more on work and how to get it done and less on massaging egos of superiors and adhering to strict hierarchy as was the case in the past. This free and open culture is visible and reflected in several areas of business from the modern open office design to the style of writing memos. This open culture has resulted in greater efficiency and a culture of open communication and fast action and decisions based mostly on data driven reports.

This increased openness in the office environment is a process that can be traced to the late eighties when companies grappled with cultural issues in organizations. Transparency has improved because of the impact of MNCs. The increased transparency has resulted in faster and more efficient reactions from employees. The trust levels in companies have gone up with rise in transparency.

Increasing Clout of Civil Society and Media

Civil society and media all over the globe have become more aware with greater clout and power. From environmental issues to consumer protection issues, they are increasingly asserting their power to make consumers aware of different burning issues thereby creating challenge for business in some cases. Environmental pollution, global warming, consumer protection, safety, etc., have now come to the centre stage of business attention. No business house can afford to ignore these interest groups in this changed order.

Civil society bodies and media have made it impossible for companies to hide behind curtains of opacity. Public awareness coupled with an active media has forced companies to increase compliance on regulatory and ethical fronts. Companies now know that the cost of non compliance is much higher now, in terms of not only cost but also in term of loss of goodwill and public image. More and more companies have started to comply with public· welfare issues and the civil society and media have even started to rate companies on their performance in this front.

Increasing Customer Focus

Businesses have become increasingly aware of the need for customer focus to improve market share. They have realized that the customer today has a choice as never before. Those companies which will ensure customer loyalty through good delivery and service will come out as winners in the marketplace.

These trends of modern business indicate that the way business was being conducted has changed and will evolve further in the coming years. Now a more competitive business environment exists. Liberalization and globalization have made international and geographic boundaries meaningless. Cultural changes and social empowerment have themselves brought in positive changes in organizations. Corporate governance initiatives and media focus have made business more accountable and open. The WTO has reduced trade barriers. Businesses cannot survive in this environment in isolation. They have to embrace these changes. The increasing uncertainty of market forces have to be neutralized by visionary decision-making. Businesses have to be proactive. Decisions will have to be based on proactive approach such as using predictive analysis rather than the age-old reactive approach. Efficiency will ultimately decide who wins and who loses. The need therefore is for faster access to the right kind of information and insight to improve the quality of management decision-making. This is the reason why large corporate houses are investing millions of dollars to ensure a proper information technology infrastructure for better information management. Investments in Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Data Mining and Data Warehousing (DM and DW) systems have now become the norm rather than the exception in corporate houses.

                The business environmental changes have necessitated a new view on organization and the role played by information management in it. The challenge is to integrate and enable organizational structure, culture and form with information management so that management decision-making is faster, accurate, timely and reliable. Before we proceed any further on the need for information management in this new era, let us clearly understand some of the concepts related to the use of information within an organization.

Increasing Focus on Knowledge in Business

Business organizations are focusing more and more on knowledge as a key ingredient for success along with capital and labor. Focus is more on using knowledge to increase output and get greater value for the resources applied. More and more companies are investing therefore, in research and development to come up with new and better products and services. This knowledge focus has led to very fast obsolescence of products and services and hence, has indirectly led to increased competition.

Increasing Awareness of the Value from Managing Information

Businesses have become increasingly aware of the value of information and invest heavily to acquire the valuable information. Awareness has sunk in that ultimately the greatest differentiators are information based differentiators. Google, Big Flicks, and other such firms have made information their competitive advantage. This trend of information driven competition has created a new breed of companies and managers who focus on analyzing data to derive predictive kind of information so that decisions can be based on what the future has in store. This type of proactive decision-making is very effective and much better than the reactive type of decision-making that is done in traditional companies. This makes the analytics based competitors more agile to changes in the marketplace and hence, their reaction time is much less.

Increasing Investment on Information Technology

Companies are investing heavily in information technology as they are getting greater value from this kind of investments. This trend has resulted in the commoditization of information technology. Today due to the competitive pressures, most successful companies have MIS or even better versions of MIS in the form of ERP or CRM or even KM systems, but that is not able to give them the edge in competition as all its competitors also have similar systems. Thus, a competition has started in the installation of IT solutions for management problems. However, a very few companies make use of the information for decision-making, which is the original objective of these systems. Those that do, dig deeper into their own data to find insights for decision-making. These companies succeed as their decisions are proactive.