INFORMATION SYSTEM MANAGEMENT

WHAT IS DATA?
Data is distinct pieces of information, usually formatted in a special way. Programs are
collections of instructions for manipulating data. Data can exist in a variety of forms — as
numbers or text on pieces of paper, as bits and bytes stored in electronic memory, or as facts
stored in a person's mind. Since the mid-1900s, people have used the word data to mean
computer information that is transmitted or stored.

Meaning

Data, information, knowledge and wisdom are closely related concepts, but each

has its own role in relation to the other, and each term has its own meaning.
According to a common view, data is collected and analysed; data only becomes
information suitable for making decisions once it has been analysed in some
fashion.[8] 
One can say that the extent to which a set of data is informative to someone
depends on the extent to which it is unexpected by that person. The amount of
information content in a data stream may be characterized by its Shannon
entropy.

What is information?
Information is stimuli that has meaning in some context for its receiver. When
information is entered into and stored in a computer, it is generally referred to as data.
After processing (such as formatting and printing), output data can again be perceived
as information.

When information is packaged or used for understanding or doing something, it is

known as knowledge.
 Data versus Information comparison chart
Data Information
Meaning Data is raw, unorganized facts When data is processed, organized,
that need to be processed. structured or presented in a given context
Data can be something simple so as to make it useful, it is called
and seemingly random and information.
useless until it is organized.

Example Each student's test score is The average score of a class or of the
one piece of data. entire school is information that can be
derived from the given data.

Etymology "Data" comes from a singular
Latin word, datum, which
originally meant "something
given." Its early usage dates
back to the 1600s. Over time
"data" has become the plural of
datum.
"Information" is an older word that dates
back to the 1300s and has Old French and
Middle English origins. It has always
referred to "the act of informing, " usually in
regard to education, instruction, or other
knowledge communication.

Data vs. Information - Differences in Meaning

"The numbers have no way of speaking for themselves. We speak for them. We imbue them with
meaning." —Statistician Nate Silver in the book The Signal and the Noise

Data are simply facts or figures — bits of information, but not information itself. When data
are processed, interpreted, organized, structured or presented so as to make them
meaningful or useful, they are called information. Information provides context for data.

For example, a list of dates — data — is meaningless without the information that makes
the dates relevant (dates of holiday).

"Data" and "information" are intricately tied together, whether one is recognizing them as
two separate words or using them interchangeably, as is common today. Whether they are
used interchangeably depends somewhat on the usage of "data" — its context
and grammar.

Examples of Data and Information

 The history of temperature readings all over the world for the past 100 years is data. If
this data is organized and analyzed to find that global temperature is rising, then that is
information.
 The number of visitors to a website by country is an example of data. Finding out that
traffic from the U.S. is increasing while that from Australia is decreasing is meaningful
information.
 Often data is required to back up a claim or conclusion (information) derived
or deduced from it. For example, before a drug is approved by the FDA, the manufacturer
must conduct clinical trials and present a lot of data to demonstrate that the drug is safe.
What Information system?

Information systems (IS) are formal, sociotechnical, organizational systems designed to

collect, process, store, and distribute information.[1] In a sociotechnical perspective,
information systems are composed by four components: task, people, structure (or roles), and
technology

Information system, an integrated set of components for collecting, storing, and

processing data and for providing information, knowledge, and digital products.

Business firms and other organizations rely on information systems to carry out and
manage their operations, interact with their customers and suppliers, and compete in
the marketplace. Information systems are used to run interorganizational supply chains
and electronic markets.

These include eBay, a largely auction marketplace; Amazon, an expanding electronic

mall and provider of cloud computing services; Alibaba, a business-to-business e-
marketplace; and Google, a search engine company that derives most of its revenue
from keyword advertising on Internet searches. Governments deploy information
systems to provide services cost-effectively to citizens. Digital goods—such
as electronic books, video products, and software—and online services, such as
gaming and social networking, are delivered with information systems. Individuals rely
on information systems, generally Internet-based, for conducting much of their personal
lives: for socializing, study, shopping, banking, and entertainment.

CLASSIFICATION OF INFORMATION SYSTEM

In any given organization information system can be classified based on the

usage of the information. Therefore, an information system in an organization
can be divided into operations support system and management support system.

 Operations support system

In an organization, data input is done by the end user which is processed to
generate information products i.e. reports, which are utilized by internal and
or external users. Such a system is called operation support system. The
 purpose of the operation support system is to facilitate business transaction,
control production, support internal as well as external communication and
update organization central database. The operation support system is
further divided into a transaction-processing system, processing control
system and enterprise collaboration system.

 Transaction Processing System (TPS)

In manufacturing organization, there are several types of transaction across
department. Typical organizational departments are Sales, Account,
Finance, Plant, Engineering, Human Resource and Marketing. Across
which following transaction may occur sales order, sales return, cash
receipts, credit sales; credit slips, material accounting, inventory
management, depreciation accounting, etc.
These transactions can be categorized into batch transaction processing,
single transaction processing and real time transaction processing.

 Process Control System

In a manufacturing organization, certain decisions are made by a computer
system without any manual intervention. In this type of system, critical
information is fed to the system on a real-time basis thereby enabling
process control. This kind of systems is referred as process control systems.

 Enterprise Collaboration System

In recent times, there is more stress on team effort or collaboration across
different functional teams. A system which enables collaborative effort by
improving communication and sharing of data is referred to as an enterprise
collaboration system.

 Management Support System

Managers require precise information in a specific format to undertake an
organizational decision. A system which facilitates an efficient decision
making process for managers is called management support system.
Management support systems are essentially categorized as management
information system, decision support system, expert system and accounting
information system.
Management information system provides information to manager facilitating the
routine decision-making process. Decision support system provides information
to manager facilitating specific issue related solution.7
Management Information Systems (MIS)
A management information system (MIS) is a computer system
consisting of hardware and software that serves as the backbone of
an organization’s operations. An MIS gathers data from multiple online
systems, analyses the information, and reports data to aid in
management decision-making.

Improved Decision-Making
The purpose of an MIS is improved decision-making, by providing up-
to-date, accurate data on a variety of organizational assets, including:

 Financials

 Inventory

 Personnel

 Project timelines

 Manufacturing

 Real estate

 Marketing

 Raw materials

 R&D
The MIS collects the data, stores it, and makes it accessible to
managers who want to analyze the data by running reports.

The goal of an MIS is to be able to correlate multiple data points in

order to strategize ways to improve operations. For example, being
able to compare sales this month to sales a year ago by looking at
staffing levels may point to ways to boost revenue. Or being able to
compare marketing expenditures by geographic location and link
them to sales can also improve decision-making. But the only way this
level of analysis is possible is due to data that is compiled through an
MIS.

Running reports that pull together disparate data points is an MIS’ key
contribution. That feature, however, comes with a significant cost.
MIS implementation is an expensive investment that includes the
hardware and software purchases, as well as the integration with
existing systems and training of all employees.

Decision Support System—DSS

What Is a Decision Support System?
A decision support system (DSS) is a computerized program used to support
determinations, judgments, and courses of action in an organization or a business. A DSS
sifts through and analyses massive amounts of data, compiling comprehensive information
that can be used to solve problems and in decision-making. Typical information used by a
DSS includes target or projected revenue, sales figures or past ones from different time
periods, and other inventory- or operations-related data.
KEY TAKEAWAYS

 A decision support system (DSS) is a computerized system that gathers and

analyses data, synthesizing it to produce comprehensive information reports.
 A decision support system differs from an ordinary operations application; whose
function is just to collect data.
 Decision support systems allow for more informed decision-making, timely problem-
solving, and improved efficiency in dealing with issues or operations, planning, and
even management.
What is artificial intelligence?
Artificial intelligence (AI) is wide-ranging branch of computer science concerned with
building smart machines capable of performing tasks the typically require human
intelligence. AI is an interdisciplinary science with multiple approaches, but
advancements in machine learning and deep learning are creating a paradigm shift in
virtually every sector of the tech industry. 
Examples of Artificial Intelligence: Work & School

1 –  Google’s AI-Powered Predictions, 2 –  Ridesharing Apps Like Uber and

Lyft
3 — Commercial Flights Use an AI Autopilot

Email
1 – Spam Filters, 2 – Smart Email Categorization

Grading and Assessment   

1 –Plagiarism Checkers, 2 –Robo-readers

Banking/Personal Finance
1 – Mobile Check Deposits, 2 – Fraud Prevention, 3 – Credit Decisions
Social Networking
1 – Facebook 2 – Pinterest 3 – Instagram 4 – Snapchat
Online Shopping
1 –Search, 2 –Recommendations, 3 – (More) Fraud Protection

Mobile Use
1 –Voice-to-Text, 2 – Smart Personal Assistants

Application of AI
1. AI in Astronomy
2. AI in Healthcare
3. AI in Gaming
4. AI in Finance
5. AI in Data Security
6. AI in Social Media
7. AI in Travel &Transport
8. AI in Automotive Industry
9. AI in Robotics:
10. AI in Entertainment
11. AI in Agriculture
12. AI in E-commerce
13. AI in education:

What is a Neural Network?

A neural network is a series of algorithms that endeavors to recognize underlying
relationships in a set of data through a process that mimics the way the human brain
operates. In this sense, neural networks refer to systems of neurons, either organic or
artificial in nature. Neural networks can adapt to changing input; so the network generates
the best possible result without needing to redesign the output criteria. The concept of
neural networks, which has its roots in artificial intelligence, is swiftly gaining popularity in
the development of trading systems.

Basics of Neural Networks

Neural networks, in the world of finance, assist in the development of such process as
time-series forecasting, algorithmic trading, securities classification, credit risk modelling
and constructing proprietary indicators and price derivatives.
A neural network works similarly to the human brain’s neural network. A “neuron” in a
neural network is a mathematical function that collects and classifies information according
to a specific architecture. The network bears a strong resemblance to statistical methods
such as curve fitting and regression analysis.
A neural network contains layers of interconnected nodes. Each node is a perceptron and
is similar to a multiple linear regression. The perceptron feeds the signal produced by a
multiple linear regression into an activation function that may be nonlinear.
In a multi-layered perceptron (MLP), perceptrons are arranged in interconnected layers.
The input layer collects input patterns. The output layer has classifications or output
signals to which input patterns may map. For instance, the patterns may comprise a list of
quantities for technical indicators about a security; potential outputs could be “buy,” “hold”
or “sell.”
Hidden layers fine-tune the input weightings until the neural network’s margin of error is
minimal. It is hypothesized that hidden layers extrapolate salient features in the input data
that have predictive power regarding the outputs. This describes feature extraction, which
accomplishes a utility similar to statistical techniques such as principal component
analysis.
KEY TAKEAWAYS

 Neural networks are a series of algorithms that mimic the operations of a human
brain to recognize relationships between vast amounts of data.
 They are used in a variety of applications in financial services, from forecasting and
marketing research to fraud detection and risk assessment.
 Use of neural networks for stock market price prediction varies

Fuzzy Logic - Control System

Fuzzy logic is applied with great success in various control application. Almost all the consumer
products have fuzzy control. Some of the examples include controlling your room temperature with the
help of air-conditioner, anti-braking system used in vehicles, control on traffic lights, washing
machines, large economic systems, etc.

Why Use Fuzzy Logic in Control Systems

A control system is an arrangement of physical components designed to alter another physical
system so that this system exhibits certain desired characteristics. Following are some reasons of
using Fuzzy Logic in Control Systems −
  While applying traditional control, one needs to know about the model and the objective function
formulated in precise terms. This makes it very difficult to apply in many cases.

 By applying fuzzy logic for control we can utilize the human expertise and experience for
designing a controller.

 The fuzzy control rules, basically the IF-THEN rules, can be best utilized in designing a
controller.

Architecture of Fuzzy Logic Control

What is Virtual Reality?

The definition of virtual reality comes, naturally, from the definitions for both ‘virtual’ and
‘reality’. The definition of ‘virtual’ is near and reality is what we experience as human
beings. So the term ‘virtual reality’ basically means ‘near-reality’. This could, of course,
mean anything but it usually refers to a specific type of reality emulation.

Everything that we know about our reality comes by way of our senses. In other words, our
entire experience of reality is simply a combination of sensory information and our brains
sense-making mechanisms for that information. It stands to reason then, that if you can
present your senses with made-up information, your perception of reality would also change
in response to it. You would be presented with a version of reality that isn’t really there, but
from your perspective it would be perceived as real. Something we would refer to as
a virtual reality.
So, in summary, virtual reality entails presenting our senses with a computer generated
virtual environment that we can explore in some fashion.

 advantages of virtual reality training in these sectors and many others?

 Little/no risk, Simplifies complex problems/situations
 Safe, controlled area, Suitable for different learning styles
 Realistic scenarios, Innovative and enjoyable
 Can be done remotely saving time and money, Improves retention and recall

What is an Expert System?

An Expert System is defined as an interactive and reliable computer-based decision-
making system which uses both facts and heuristics to solve complex decision-making
problems. It is considered at the highest level of human intelligence and expertise. It is
a computer application which solves the most complex issues in a specific domain.
The expert system can resolve many issues which generally would require a human
expert. It is based on knowledge acquired from an expert. It is also capable of
expressing and reasoning about some domain of knowledge. Expert systems were the
predecessor of the current day artificial intelligence, deep learning and machine
learning systems

Examples of Expert Systems

 MYCIN: It was based on backward chaining and could identify various bacteria
that could cause acute infections. It could also recommend drugs based on the
patient's weight.
 DENDRAL: Expert system used for chemical analysis to predict molecular
structure.
 PXDES: Expert system used to predict the degree and type of lung cancer
 CaDet: Expert system that could identify cancer at early stages

Characteristic of Expert System

1. The Highest Level of Expertise
2. Right on Time Reaction:
3. Good Reliability:
4. Flexible:
5. Effective Mechanism:
6. Capable of handling challenging decision & problems
Components of the expert system
User Interface
The user interface is the most crucial part of the expert system. This component takes
the user's query in a readable form and passes it to the inference engine. After that, it
displays the results to the user. In other words, it's an interface that helps the user
communicate with the expert system.
Inference Engine
The inference engine is the brain of the expert system. Inference engine contains rules to
solve a specific problem. It refers the knowledge from the Knowledge Base. It selects facts
and rules to apply when trying to answer the user's query. It provides reasoning about the
information in the knowledge base. It also helps in deducting the problem to find the
solution. This component is also helpful for formulating conclusions.

Knowledge Base
The knowledge base is a repository of facts. It stores all the knowledge about the problem
domain. It is like a large container of knowledge which is obtained from different experts of
a specific field. Thus we can say that the success of the Expert System mainly depends on
the highly accurate and precise knowledge.
Executive Information System (EIS)
An executive information system (EIS) is a decision support system (DSS) used to assist
senior executives in the decision-making process. It does this by providing easy access to
important data needed to achieve strategic goals in an organization. An EIS normally
features graphical displays on an easy-to-use interface.

Executive information systems can be used in many different types of organizations to

monitor enterprise performance as well as to identify opportunities and problems.
Advantages of EIS
 Easy for upper-level executives to use, extensive computer experience is not required in operations
 Provides timely delivery of company summary information
 Information that is provided is better understood
 Filters data for management
 Improves to tracking information
 Offers efficiency to decision makers

Disadvantages of EIS
 System dependent
 Limited functionality, by design
 Information overload for some managers
 Benefits hard to quantify
 High implementation costs
 System may become slow, large, and hard to manage
 Need good internal processes for data management
 May lead to less reliable and less secure data

CROSS FUNCTIONAL INFORMATION SYSTEM

A cross-functional information system is the third era of information systems, after

calculations systems and functional systems. Cross-functional systems were designed to
integrate the activities of the entire business process, and are called so because they 'cross'
departmental boundaries. Channing over to a cross-functional system from a functional one
can be problematic at times, as it involves the coordinating of activities across multiple
departments, with the users changing the way that they work. There is no clear line of
authority, and fierce peer competition can often lead to interdepartmental rivalries that
hinders the development of the new system.
EXAMPLES OF CROSS FUNCTIONAL SYSTEM

1. Enterprise Resource Planning (ERP) is an integrated computer-based system used to manage

internal and external resources, including tangible assets, financial resources, materials, and
human resources. Its purpose is to facilitate the flow of information between all business functions
inside the boundaries of the organization and manage the connections to outside stakeholders.
Built on a centralized database and normally utilizing a common computing platform, ERP systems
consolidate all business operations into a uniform and enterprise-wide system environment.

An ERP system can either reside on a centralized server or be distributed across modular
hardware and software units that provide "services" and communicate on a local area network.
The distributed design allows a business to assemble modules from different vendors without the
need for the placement of multiple copies of complex and expensive computer systems in areas
which will not use their full capacity

COMPANIES THAT USES CROSS FUNCTIONAL INFORMATION SYSTEM

Cross-Functional Enterprise Applications

• Many companies today are using information technology to develop

integrated cross-functional enterprise systems that cross the
boundaries of traditional business functions in order to reengineer and
improve vital business processes all across the enterprise.

• Many companies first moved from functional mainframe legacy systems to integrated cross-
functional client-server applications.

• Instead of focusing on the information processing requirements of

business functions, such enterprise software focuses on supporting
integrated clusters of business processes involved in the operations of
a business.
SAMS
 UNIT 2
ROLE OF MIS
The system ensures that an appropriate data is collected from the various sources, processed
and send further to all the needy destinations. The system is expected to fulfill the
information needs of an individual, a group of individuals, the management functionaries:
the managers and top management.
Here are some of the important roles of the MIS:
i. The MIS satisfies the diverse needs through variety of systems such as query system,
analysis system, modelling system and decision support system.
ii. The MIS helps in strategic planning, management control, operational control and
transaction processing. The MIS helps in the clerical personal in the transaction processing
and answers the queries on the data pertaining to the transaction, the status of a particular
record and reference on a variety of documents.
iii. The MIS helps the junior management personnel by providing the operational data for
planning, scheduling and control, and helps them further in decision-making at the operation
level to correct an out of control situation.
iv. The MIS helps the middle management in short term planning, target setting and
controlling the business functions. It is supported by the use of the management tools of
planning and control.
v. The MIS helps the top level management in goal setting, strategic planning and evolving
the business plans and their implementation.
vi. The MIS plays the role of information generation, communication, problem identification
and helps in the process of decision-making. The MIS, therefore, plays a vital role in the
management, administration and operation of an organization.
Competitive Strategy
Definition: Competitive Strategy
Competitive Strategy is defined as the long term plan of a particular company in order to
gain competitive advantage over its competitors in the industry. It is aimed at creating
defensive position in an industry and generating a superior ROI (Return on Investment).
Such type of strategies plays a very important role when industry is very competitive and
consumers are provided with almost similar products. One can take example of mobile
phone market.

Types of competitive strategies by Porter

Examples of competitive strategy

There can be several examples based on the four parameters given by Michael Porter. Some
examples are given below:

1. Cost leadership: Micromax smart phones and mobile phones are giving good quality
products at an affordable price which contain all the features which a premium phone like
Apple or Samsung offers

2. Differentiation leadership: BMW offers cars which are different from other car brands.
BMW cars are more technologically advanced, have better features and have got
personalized services

3. Cost focus: Sonata watches are focused towards giving wrist watches at a low cost as
compared to competitors like Rolex, Titan, Omega etc
4. Differentiation focus: Titan watches concentrates on premium segment which includes
jewels in its watches. 

Hence, this concludes the definition of Competitive Strategy along with its overview.

What is Business Process Reengineering?

Business process reengineering is the act of recreating a core business process with the goal
of improving product output, quality, or reducing costs.

Typically, it involves the analysis of company workflows, finding processes that are sub-par
or inefficient, and figuring out ways to get rid of them or change them.

Business Process Reengineering involves the radical redesign of core

business processes to achieve dramatic improvements in productivity,
cycle times and quality. In Business Process Reengineering, companies
start with a blank sheet of paper and rethink existing processes to deliver
more value to the customer. They typically adopt a new value system that
places increased emphasis on customer needs. Companies reduce
organizational layers and eliminate unproductive activities in two key
areas. First, they redesign functional organizations into cross-functional
teams. Second, they use technology to improve data dissemination and
decision making.
The Six Key Steps of Business Process Reengineering
1. Define Business Processes
2. Analyse Business Processes
3. Identify and Analyse Improvement Opportunities.
4. Design Future State Processes
5. Develop Future State Changes
6. Implement Future State Changes.
When to Use Business Process Reengineering
(BPR)
The benefits of BPR are countless – increased revenue, improved customer
service, reduced cost, higher employee retention, faster processing time. Nearly
any business benefit can be gained from business process reengineering.
However, the key is when to use BPR. Here are some key times when you might
want to think about obliterating your processes and starting fresh:
 When technology has significantly disrupted your industry
 When a competitor does drastically more with less (think Mazda)
 When you need to be the disruption in your industry
 When a little improvement won’t make much difference

Core BPR Principles

1. Think Cross-Functionally.

2. Keep asking “Why” and “What if”.

3. Organize around outcomes, not tasks.

4. Let those closest to the work make the final decisions.

5. Capture information once, at the source.

A Definition of Virtual Business

 A virtual business conducts all or most of its business via the internet and does not have
physical premises to interact with customers face-to-face. A purely virtual company
may outsource nearly all of its business functions such as product development, marketing,
sales, shipping, etc. However, most virtual businesses retain some of these activities in-house
and may still require a physical presence in the form of headquarters, warehouses, shipping
and delivery hubs, and other functions.

Amazon is the most famous virtual retailer and the largest in the world, with over 150,000
employees and over US$90 billion in annual revenue. Founded by Jeff Bezos in 1994, it
began as a virtual bookstore and with the advent of digital books (ebooks) and e-readers
has turned the publishing industry on its head. Traditional “bricks and mortar” booksellers
such as Borders (who at its peak had over 600 retail stores) were unable to compete with
Amazon’s huge selection, low prices, and free shipping
Virtual Business Advantages
Virtualizing business activities has many potential advantages, including:
 “Bricks and mortar” cost savings: reducing the need for employee workspace
saves money on overhead (expenses such as commercial building leases, utilities,
insurance, etc.)
 Flexibility: a less rigid organization can react faster to changes in the marketplace.
 Happier employees: working from home creates a better work/life balance for staff.
 A larger employee base: Since employees can work anywhere, organizations can
provide employment in rural locations or areas of high unemployment.
Virtual Business Disadvantages
The possible disadvantages of business virtualization include:
 Lack of cohesiveness in the organization due to employees being located in diverse
regions, with possible language and cultural differences.
 Lack of face-to-face interaction between employees and teams resulting in
communications-related issues.
 Reduced productivity from work-from-home employees who lack self-discipline.
A virtual organisation has the following characteristics:

1. Flat organisation

2. Dynamic

3. Informal communication

4. Power flexibility

5. Multi-disciplinary (virtual) teams

6. Vague organisational boundaries

7. Goal orientation

8. Customer orientation

9. Home-work
What is Virtual Organisation? Definition,
Characteristics and Types
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Definition:
This new form of organisation, i.e., ‘virtual organisation’ emerged in 1990 and
is also known as digital organisation, network organisation or modular
organisation. Simply speaking, a virtual organisation is a network of
cooperation made possible by, what is called ICT, i.e. Information and
Communication Technology, which is flexible and comes to meet the dynamics
of the market.

Alternatively speaking, the virtual organisation is a social network in which all

the horizontal and vertical boundaries are removed. In this sense, it is a
boundary less organisation. It consists of individual’s working out of physically
dispersed work places, or even individuals working from mobile devices and
not tied to any particular workspace. The ICT is the backbone of virtual
organisation.

It is the ICT that coordinates the activities, combines the workers’ skills and
resources with an objective to achieve the common goal set by a virtual
organisation. Managers in these organisations coordinate and control external
relations with the help of computer network links. The virtual form of
organisation is increasing in India also. Nike, Reebok, Puma, Dell Computers,
HLL, etc., are the prominent companies working virtually.

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While considering the issue of flexibility, organisations may have several

options like flexi-time, part-time work, job-sharing, and home-based working.
Here, one of the most important issues involved is attaining flexibility to
respond to changes – both internal and external – is determining the extent of
control or the amount of autonomy the virtual organisations will impose on
their members.

This is because of the paradox of flexibility itself. That is: while an organisation
must possess some procedures that enhance its flexibility to avoid the state of
rigidity, on the one hand, and simultaneously also have some stability to avoid
chaos, on the other.

Characteristics:
A virtual organisation has the following characteristics:
1. Flat organisation

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2. Dynamic

3. Informal communication

4. Power flexibility

5. Multi-disciplinary (virtual) teams

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6. Vague organisational boundaries

7. Goal orientation

8. Customer orientation

9. Home-work

10. Absence of apparent structure

11. Sharing of information

12. Staffed by knowledge workers.

Types of virtual organisations:

Depending on the degree or spectrum of virtuality, virtual
organisations can be classified into three broad types as follows:

1. Telecommuters

2. Outsourcing employees/competencies

3. Completely virtual

Telecommuters:

These companies have employees who work from their homes. They interact
with the workplace via personal computers connected with a modem to the
phone lines. Examples of companies using some form of telecommuting are
Dow Chemicals, Xerox, Coherent Technologies Inc., etc.

Outsourcing Employees/Competencies:

These companies are characterised by the outsourcing of all/most core

competencies. Areas for outsourcing include marketing and sales, human
resources, finance, research and development, engineering, manufacturing,
information system, etc. In such case, virtual organisation does its own on one
or two core areas of competence but with excellence. For example, Nike
performs in product design and marketing very well and relies on outsources
for information technology as a means for maintaining inter-organisational
coordination.

Completely Virtual:

These companies metaphorically described as companies without walls that

are tightly linked to a large network of suppliers, distributors, retailers and
customers as well as to strategic and joint venture partners. Atlanta Committee
for the Olympic Games (ACOG) in 1996 and the development efforts of the PC
by the IBM are the examples of completely virtual organisations.
What is Total Quality Management

Total quality management (TQM) is the continual process of detecting and reducing or
eliminating errors in manufacturing, streamlining supply chain management, improving the
customer experience, and ensuring that employees are up to speed with training.
Total quality management aims to hold all parties involved in the production process
accountable for the overall quality of the final product or service.

TQM was developed by William Deming, a management consultant whose work had a
great impact on Japanese manufacturing. While TQM shares much in common with the Six
Sigma improvement process, it is not the same as Six Sigma. TQM focuses on ensuring
that internal guidelines and process standards reduce errors, while Six Sigma looks to
reduce defects.

The key principles of Total Quality Management

Commitment from the management:

 Plan (drive, direct)

  Do (deploy, support, and participate)

 Check (review)

 Act (recognize, communicate, revise)

Employee Empowerment
 Training

 Excellence team

 Measurement and recognition

 Suggestion scheme
Continuous Improvement
 Systematic measurement

 Excellence teams
  Cross-functional process management

 Attain, maintain, improve standards

Customer Focus
 Partnership with Suppliers

 Service relationship with internal customers

 Customer-driven standards

 Never compromise quality

Benefits of Total Quality Management

The benefits arising from the implementation of a Total Quality Management in an organization are:

 This will increase the awareness of quality culture within the organization.

 A special emphasis on teamwork will be achieved.

 TQM will lead to a commitment towards continuous improvement.

Beliefs about Total Quality Management

Following are the universal Total Quality Management beliefs:

 Satisfaction of the customer/owner is the measure of quality.

 Everyone is an owner.
 Continuous Quality improvement must be there.
 Analysis of the processes is the key to quality improvement.
 Constant TQM is not possible without consistent, active and enabling leadership by managers at all
levels.
 It is important to incessantly improve quality of the products and services which we are supposed to
provide to our customers/owners.

Conclusion
A successful TQM implementation requires a significant training for the employees involved in it. Since the
training program can take employees away from their day to day work, this eventually can have a negative
short-term impact. Also, since Total Quality Management tends to result in a consistent series of incremental
changes, it can lead to creating an unpleasant response from those employees who prefer existing system, or
employees who are afraid of losing their jobs because of it. Total Quality Management works best in an
environment where there are strong support and commitment from the management.

Six Steps To Building An Agile Business

1. Delegate
The first step to gain agility in business functions is to delegate operational control to your frontline employees
and train them continuously so that they can do a good job. You cannot control how your business functions
from backstage and expect agility. If you want your teams to change and become agile, you as a leader need to
create an environment where agility can thrive.

Once that is taken care of, you need to focus on the following areas to enable agility:

2. Define an aspiration
As a leader, you must have a vision of what you want to achieve. Ideally, you should be able to weave a
narrative of how the future will unfold. One approach that I have seen work well is to tell a story of how each
department or organization will function in the new reality. It is even better if you can narrate the story from
different perspectives (employees, customers, partners, etc).

3. Enroll
Once your aspiration is defined, you need to get people to enroll in the program. Most change initiatives fail
because they don’t engage the very people who are expected to change. People won’t enroll in a project if they
don’t have a clear reason to change. Change is not difficult if we understand what is expected and why it is
imperative.

4. Allocate
Actions speak louder than words. People can see by your action and investment which areas of business are
considered most critical. To build agility, think deeply about how you allocate resources to that part of the
business.

Here are some questions to consider when it comes to allocating resources:

 How will you decide what to invest in?
 Do people know about this process?
 Is it better to be open and transparent about this process?
 Are you able to disengage from initiatives and lines of business that lack future potential and redirect
those resources to programs that are designed for agility?
 “Resources” does not always mean financial resources; it also refers to executive attention.

5. Measure
It is not enough to allocate physical resources to projects or programs. It is important to also allocate executive
attention if you want your team to prioritize them.

One easy way to do this is to continuously measure and monitor your teams’ progress—what gets measured
gets done. Here are some questions to keep in mind:
 What outcomes are being measured by senior decision-makers?
 How often do the leaders give attention to the project (weekly, monthly, quarterly, or annually)?
 What new metrics (qualitative and quantities) could be used to track success?
A clear aspiration to move toward makes measuring progress easy. This is another reason that having a clear
aspiration is important for transformation to succeed.

6. Reward
What gets rewarded gets acted on. It is important to link accountability to the success or failure of a project. For
that to happen, your team needs to know unambiguously what is expected of them.

Here are some questions to consider:

 What kinds of behaviour are enabled, supported, and rewarded in your organization? Do these align with
your aspiration? If not, who has the authority to challenge and change them?
 What are managers held accountable for?
 How are people assigned to new positions? Are these assignments based on predefined criteria and free
of bias?
 Do compensation and recognition support or hinder necessary behavioural changes?
In conclusion
A successful business agility strategy requires aspiration, enrolment, resource allocation, measurement of
progress, and rewards. Bring these factors together to increase agility in your teams.

The Knowledge-Creating Company