CS507 - Information Systems - Lecture Handout 03

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Organization & Information Requirements

Organizations have various attributes which distinguish them from each other. No two organizations are similar in all respects. There have to have certain distinctive lines keeping them unique from each other.
Information requirements keep varying in accordance with

  • Size of organization
  • Its structure
  • The Culture it follows
  • Decision Making Structures
  • Interested parties both internal and external

An organization should consider the above mentioned requirements while devising a system which tailors for specific information needs.

Size of the Organization and Information Requirements

Small Organizations

Small organizations usually have simple management structure. The need invariably grows from the limited scope and operations of management. Since tasks to be handled are usually limited and manageable, hence need for introducing more levels is not required. Since operations can be managed at the top level by one or two members of the senior management, officers from the lower level of management are not usually involved in decision making. Hence the final decisions are centrally taken.

Information flows and formats are easy to define and change. Since information requirements are not extensive, number of documents prepared and generated will also be few in number. Mostly the interested party itself is running the business, hence the management is centralised to few people.

Examples of Information requirements of Small Organizations

  • Day to day transactions
  • Daily Sale
  • Cash management
  • Receivables and Payables

Medium Sized Organizations

Medium Sized organizations are normally a family ownership run by brothers, father-son. There are many organizations existing these days which are being run by the family members. The prime concern may be the trust already fostered among the blood relations but this might give rise to informal relationship among them. Since all critical managerial positions are usually controlled by the family members, information is structured only to the extent of external reporting. The level of reporting that could meet the information needs of the clients is best suited for such an organization.

Medium sized organizations are run under direct supervision of the family members which rarely extends to segregation of duties and delegation of authority.

  • Centralized decision making
  • Above mentioned structure rarely changes with complexity and dynamism of environments.

Information Requirements of Medium Sized Organizations

As size of the organization increases, the importance of planning for information also increases. The planning on long-term basis also helps in monitoring of information against planning

Large Organizations

Usually such organizations are characterized by large scale of operations. Various criteria can be used for this purpose.

  • Number of employees
  • Amount of turnover
  • Number of branches
  • Profit size
  • Value of assets
  • Number of businesses the organization is working in

With such large size of organizations, management structure needs to be multi- tiered for efficient and strong control. This leads to formulation of many departments, management levels, designations, promotional opportunities and salary increments.

Public companies

Information Requirements of Large Organizations

With such a large structure, it is inevitable that the detailed planning should be made for proper management control, for both short term and long term.

Performance measurement against plans / targets

Nature of the Business and Information Requirements

  • Manufacturing Sector
  • Service Sector
  • Trading Sector

Manufacturing Sector

Manufacturing process involves more than one sub-processes, detailed information is required before transferring materials for warehousing, manufacturing and sale to final consumer.

Information Requirements of Manufacturing Sector
Management is concerned with the day to day costs, production targets, quality of the product, delivery schedules, etc.

Service Sector

Final product is intangible, so information is critical at various steps, e.g. preparation, delivery and customer satisfaction. Quality maintenance is an issue which requires structured reporting.

Information requirements of Service Sector

  • Quality of service provided.
  • Mode of delivery
  • Customer Satisfaction
  • Time Scheduling
  • Resource Management

Trading Sector

Monitoring requires information for each product, e.g.

  • Customer profiles
  • Customer Comments
  • Volume of sales
  • Profitability
  • Stock movements Manufacturing/Procurement Cycle
  • Market needs

Nature of Business & Information Requirements

As the size of organization and scale of operations change, information requirements need to be adjusted for better monitoring to keeping things in control.