Scholarly Activity - week 8 - Principles of Management

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CHARACTERISTICS OF BUSINESS INFORMATION SYSTEMS AND THEIR IMPORTANCE FOR THE

IMPROVEMENT OF LOGISTICAL SERVICE

Vania BANABAKOVA Atanas PANEV

“Vasil Levski” National Military University, Bulgaria

ABSTRACT The exchange of information, based and assisted by the

information te chno logies, developed a variety of software applica tions for processing the informa tion in the organizations, like ERP, ERP II, CMR, BI and other specia lized applications. At the same time one of the main indicato rs for the estima tion of the efficiency of the logistical syste ms and for the logistical p lanning, is the quality of the serv ice to the cu stomers and here is, whe re the role and importance of the appli cation of the busine ss informational syste ms comes forth. The insurance of the logistical syste m is of pa ra moun t importance fo r the clients. That i s why , the aim of the present study is to examine the chara cte ristic features of the basic business information systems and how they are applied in pra ctice to improve the log ist ical service .

Keywords: business information systems, Logistical service, customers

Introduction Apart from being the age of

information and telecommunication products, the 21st century turns out also to be the age of globalization and integration. Economy is defined as economy “based on knowledge” or “global economy” and as such is determined by two basic processes, namely by the development of the sector “Information and communication technologies”. These are not only the driving forces of the new economy and services, but they prove to be instrumental in the achievement of the “fifth liberty” and of a society based on knowledge [1]. Regardless of technological problems, the economy restructuring and the processes of social interaction springing from the future infrastructure of the internet, “golden chances” can be revealed for the interested

countries in Europe to head the new wave of innovations and to ensure a status in the internet economy, which corresponds to their technological and scientific know-how [2]. The IT based informational exc hange, developed a variety of software applications for the processing of the information in the organizations like ERP, ERP II, CMR, BI and other specialized applications. The contemporary information systems of management include all processes in the enterprise- the production process, the product distribution, the staff, the maintenance, public relations, suppliers relations, the accounting, storage, the assets, which in their turn realise the logistical service. Being based on the internet technologies gives them the chance to be used no matter where the hardware is, or the specialists and thus to a greater extent

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they relieve the management of the info resources. We can say that the main task of the systems is to provide timely actual information to a wide range of consumers on different levels. With the implementation of IT starts the actual automatization of the business processes in the economic structures, the logistical ones included. Hence their importance as a basis for the improve ment and optimization of all the sheres they are used in [3]. At the same time we view the logistical service as one of the basic means to ensure competitive advantages and to retain consumers by better and more efficiently satisfying their needs [15]. In this connection the quality of service to the clients is one of the main indicators in the evaluation of logistic syste ms efficiency and in the planning of the logistical activities and this is where comes the role and importance of the application of the business information syste ms. We here have to underline that the informational insurance of the logistical syste m is of critical importance for the clients. That is why the firm ca n formulate its informational policy to a standard based on the clients' demands. The availability of such a standard will facilitate the control on the quality of the information of the system.

All this makes it necessary to analyze the possibilities for an effective management of the info with the aim of improving the logistical service of the clients.

In this connection the aim of the present study is to explore the characteristic features of the basic business information syste ms and their practical implementation for the improvement of the logistical services.

Today we see a great majority of information conceptions, approaches and technologies, which have proven their reliability in the business development on the whole and for the logistics in part, and many of them have already acquired a status of being an international standard. The necessity of a standard in the info technologies led to the appearance of a new

science called itology, its main task being the creation of a basis, upon which to build the info systems. Speaking generally we can list the following existing systems:

1 CRM (Customer Relationship Mana gement);

2 CRP (Capacity Requirements Planning);

3 SCM (Supple Chain Management); 4 Workflow; 5 OLAP (Online Analytical

Processing); 6 Project Management; 7 CALS (Continuous Acquisition

and Lifecycle Support); 8 MRP (Material Requirements

Planning); 9 MRPII (Manufacture Resource

Planning); 10 ERP (Enterprise Resource Planning); 11 ERPII (Enterprise Resource &

Relationship Processing) (ERP + SCM + CRM).

Each of these information systems (IT) has its features, advanta ges and concrete practical applications for the logistical service of c ustomers, and these are the object of our analysis.

Customer Relationship Management are systems, designed to manage the relationship with the customers and they include all the processes, through whic h a company traces and organizes information and the dealings with its current and potential customers. The software keeps the info about the clients and every communication with them can be logged in, saved and be available for the executives from different departments. The main aim of CRM is to improve the services, offered to the customers and to use contacts with them for a marketing and logistical campaigns. Better services create loyal clients and so generate a greater income [5]. The systems stimulate the effective relationship with customers, which influences positively the management, the strategy and the culture of the company.

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Supply Chain Management are syste ms controlling the chain of suppliers, which is responsible for the management of the processes of the delivery of the materials for the production, transporting, stora ge and management of supplies. With SCM the priority is shifted from the managing of the separate type of resources to integrated optimization of the logistical processes. This means that the management of the main business processes like the receiving of orders, production, distribution depends on the completion of the main goals for the improve ment of the quality of the logistical services for the customers and decrease of expenses through the whole supply chain.

Human Resources Management Systems HRMS include all the aspects of the staff management at accomplishing the company tasks. The effective management of the human resources benefits the whole development of the firm – increases productivity, betters life quality etc. [6]. At the same time the effective management of the human resource is a basic requirement for the improvement of the logistical service, because it is the staff who are in direct contact with the customer and therefore the staff needs motivation. The HRMS provides the instruments, with which the company policy signed on paper is transferred in practice. This gives a flexible basis, capable of setting complicate and variable processes as functions of the in-company portal {Self-services} used by the managers and the other staff. “The level of a certain HR software system is determined by what kind and how many services and work processes automates, because in the actual management of the HR there are a lot of processes. They should be transparent and equal for all the staff – if the PR sells the company outside, the HR sells it inside”, concludes Peter Kotsev [7]. The software for the management of the staff and human resources dynamically changes its functional capabilities in accordance with the following factors:

1. the competition of software firms; 2. the development of the information

technologies; 3 legislative changes and various

demands of the customers. Technology is increasing its influence

in education, training, human resources. Computers and mobile phones are used in developed countries both to complement established education practices and to develop new training methods such as online education. Technology offers powerful learning tools, including multimedia and offer new ways to engage people as virtual training [16].

In the field of information science and communications there is debate about the meaning of the term “interactivity”. In the most general sense, interactivity can be seen as any kind of bilateral communication. It can be between: two or more people, one electronic system, between two or more electronic systems. According to Petrova, E. educational interactivity can be defined as a form of communication between students and teachers, between students the mselves and between learners and learning resources (which includes any computer system), between people to encourage students to participate actively in the learning process. In the process of human resource ma nagement, and in particular the learning process the interactive communication can be realized through:

A. Cooperative learning groups – group me mbers must work or act as an individual to achieve common goals, while important is less the contribution of each participant in the group, but mostly on its overall performance.

B. Information and communication technologies, which use is associated with: communication via computer (Computer mediated communication), learning through computer (Computer-mediated learning), computer-based training.

C. Interactive multimedia – any software product, which appropriately

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combine audio-video technology, text and animation in order to motivate cons umers and to attract their attention.

D. Distance Education [16]. Specialized software products is a

syste m for business organization, designed to mana ge business and logistic processes, forming a corporate activity with modules for accounting, cash register, assets, suppliers, clients, sale and others, in accordance with the Bulgarian legislature and international standards the country observes. The use of specialized software products makes it possible to decrease the design time, as well as, to ensure better quality. This leads to more projects ready in a shorter time. These are specialized solutions for the enhancement of efficiency in spheres like produc tion, warehouse and distribution, transportation and logistics, home delivery, markets.

Enterprise Resource Planning are syste ms for automation of the main business functions – accounting, finance, budget, warehouse availability management, orders, deliveries and production. Business processes are being managed and automated in an information system, applying the best world practices. The effectiveness and productivity increase and the expenses decrease. ERP is a system for the management of working cycles. It allows itself to be adjusted and widened according to the specific needs of each firm. The product is built on a module principle, which gives the chance to the customer to choose the functions they need. It boasts a light, intuitive user interface, easy to learn and is a reliable instrument for the effective planning of the management of the business and logistic processes. With time, of course, the methodology develops, but despite the arising branches, we can still say, that all the ERP systems have one common central methodology. This is of great importance for the process of training the staff to manage this type of system – there are a lot of courses not connected to any ERP in particular, but applicable to all [12].

Enterprise Resource Planning II (ЕRPII =ERP + SCM + CRM) formulates the basic requirements for the business and logistic systems of a new generation on the background of the general development of IT and the business models of XXI century. The idea is to enlarge the traditional focus of ERP systems “optimization of the resources mana gement of the enterprise”, so that in the end we have “corporative IT, open to all parties in the business” [13]. These corporative information systems are able to input special communication protocols and document formats for data exchange, so that they ensure greater efficiency and they avoid the need of manual input of data over again, thus reducing the error hazard. These improved functions of the integrated systems for the management of the corporative resources create essentially new organizational and management environment. On suggestion made by Gartner, the concept of ERP syste ms of the new generation, was called ERP II (Enterprise Resource and Relationship Processing- mana gement of the resources and connections of the enterprises). The essence of this concept is that the corporative information resources are to be used not only for in company purposes, but also they are used to the develop coordination and contacts with other organisations. Business demands are constantly growing and it is unlikely for a single information system to satisfy them even by half. According to latest statistical data a project will work if the ERP system covers 40 % of the firm demands, whereas some years ago this decision class had to cover 70 % of the business requirements. According to analyzers of ARC the demand for this type of decisions worldwide will increase dramatically in the next 2 years, during which period the reliability of the today existing systems for business management in the value of 115 billion dollars, will expire. We are yet to see if those predictions will come true in the future. For the Bulgarian enterprises, the IT

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outsourcing and the distant use of IT services is definitely not a priority, but nevertheless there is a potential in the idea of Collaborative ERP. According to data revealed by Gartner analysers, the income from the sale of business software in 2010 amounts to 232 billion dollars, which marks a growth of 4,5 % compared to the 222,4 bill. in 2009. A steady growth of 6 % each year is expected for the next 5 years. In this way the corporative software market will reach 246,6 billion until the end of 2011 and 297 billion in 2014. “After the drop of 2,6 in 2009, the world market of corporative software bounces back and the indications of growth are discernible on the horizon” [14].

On the basis of the presently examined business information systems we can draw the following conclusions:

1. The effective and efficient functioning of the modern organization and the improveme nt of the logistical services are unthinkable without the use of business information s yste ms.

2. The fast exchange of information and the unhindered access to data in any given moment, today, are of key importance for the business as a whole, and for the logistics in part.

3. The economic benefit of the use of the information systems consists of reducing the risk, ensuring of constant control on the separate logistical processes and bettering the work with the customers. This obviously will lead to a considerable decrease of logistical expenses, will raise the level of logistical services, hence will increase the competitiveness.

In conclusion, we can say, that the here presented analysis of the business information systems doesn't pretend to be an exhaustive study of their capabilities, but it surely points towards the main aspects of their practical application and the directions for their improvement and combination, in order to raise the effectiveness of the logistical service.

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