A description of the use of ICT for internal and external communications of the business.
Task 6
E5, C3, A1:
A description of the use of ICT for internal and external communications of the business.
There are many internal and external communications within a company or business such as the following:
* Internal:
* Email May be used when fellow employees want to stay in contact, or other important things have to be shared.
* Telephone:
* Is used when contacting employees, as they may ask if they could do extra hours, or they are unable to come, or another form of illness.
* Newsletters:
* May be used to advertise McDonalds telling them about sale figures, good quality service etc.
* External:
* Intranet, e-mails, faxes or internet e-commerce may be set up for the working employees, giving information about the company, pay rates, shifts that they may work, etc.
The use of ICT has increased having computers generating and managing information flows. A computer-based management information system provides the means to communicate, collect, store, summarise, analyse and present information in a way, which suits needs of managers.
Computer systems can help organisations in many ways such as the following:
* Produce complex information
* Increase job satisfaction
* Collect information at source
* React to changes in the businesses environment
* Communicate via the internet
* Provide administration support
* Produce complex information:
A computer normally tends to process and communicate complex information. It also enables it to quickly identify developments within organisations like McDonalds that could threaten business objectives. It may be due to for example a sudden rise in unit costs or disappointing
Computers have become an integral part of modern day life and are becoming increasingly important as teaching and training tools. In the work place and many other educational institutes computers and networks have become commonplace. This allows companies such as McDonalds and educational establishments to utilise many possible computer training and education techniques.
Today the use of computer based training and education covers a very broad spectrum of uses. Many companies now use computers in staff training and education. Computers are used as both a resource to present information and as a tool to develop practical expertise in staff.
McDonalds believe that computers can be used as a resource to present information because of presentation programs such as Microsoft PowerPoint. This presentation package can be used for basic training such as an employee induction; the presentation could give information about the company and what the employees will be doing.
Computers can also be used as tools because they can help develop employees practical skills e.g. an employee who would be working with the companies database would probably be trained on a "dummy database" this would allow the employee to build up practical skills. Among the many benefits of computer-based training the major benefit to an employer is the reduced cost. As they do not have to send people away on courses which mean they don't have to pay for travel or accommodation. So the investment in a suitable training scheme often pays for itself, as the computers are already available.
The only drawback McDonalds think is that the computer based training courses can be impersonal and the employee may have to be a computer literate to do the course. One of the other advantages is that staff can train when they like at there own desks on the computer. The downside to this is that they are being taught by a computer, which cannot explain to the employee what they did wrong when they make a mistake, although some training packages may be able to do this to an extent.
The major benefit to the people being trained close to McDonalds is the convenience as they do not have to travel away and can learn in there own time. They can also get immediate feedback on how well they are doing. The only real disadvantage to using computer-based training is the impersonal touch of being taught by a computer.
* Integrating the functions:
In modern organisation, there is far more integration of functions than ever before. The prime drivers of this change have been the emphasis on serving the customer and the use and application of information and communications technology. The use of ICT in an organisation makes it possible for functional areas to share the same information, and to work collaboratively using this pool of information, and information-creating and -handling capacity. For example, client databases can be used for accounting purposes (e.g. handling and processing customer accounts), marketing purposes (e.g. researching the needs of customers) or administrative purposes (handling the paperwork related to customers, etc.).
Increasingly, McDonalds have seen the redesign of business processes (i.e. business activities) so that these processes are focused on meeting the customer needs. Very often this has involved the creation of work cells (cellular working) made up of a number of people from a number of functions who work together in carrying out one specific process involved in meeting customer requirements. Functions are thus integrated to concentrate on a particular process.
McDonalds need to communicate with a range of individuals and organizations, including their customers, their competitors and their suppliers. As well as there own employees. Good communication within McDonalds is essential if that McDonalds is to operate effectively.
McDonalds need to be able to identify the communication channels that exist within businesses and the effect these have on the quality of communication. You should be able to compare different channels of communication, including:
• internal and external
• formal and informal
• upward and downward
• open and restricted.
It is important you understand the relationship between effective communication and the achievement of business objectives.
Information and communication technology (ICT) has had a dramatic effect on the way communication takes place in business. You need to be able to identify and understand where ICT has changed the means of communicating within a business, and analyse the strengths and weaknesses of current development in ICT for business.
McDonalds need to have good, clear paths of communication so that:
* Everyone is clear about objectives.
* There is smooth and accurate communication both within the organisation (internal communication) and between the organisation and other individuals, bodies and groups (external communication).
* Everyone in the organisation is kept informed of developments and changes.
* Ideas and views are clearly heard.
* New ideas can bubble up through the organisation.
* People don't feel frustrated - 'nobody listens to me
* The organisation and its members can respond quickly to new developments, etc.
* The communication process:
The process of communication involves a transmitter (or sender) sending messages to receivers. A transmitter should put information into a form the receivers can understand, and this might involve oral, written or visual messages. This process is known as encoding. The transmitter chooses a particular medium to use to send messages to the receivers - letter, report, fax, phone call, email, web site, etc. The receivers then interpret the messages through a process of decoding.
* The Leaky bucket theory:
The communication of information and ideas can be likened to transferring water by bucket from the tap in your kitchen to parched plants in your garden. A 'good' bucket will not let any of the water escape, so you can carry out the job in an efficient way. However, many of us rely on leaky buckets. The more holes in the bucket and the further the distance from tap to flower bed, the less efficient the system will be. The greater the need the plants have for water and the more holes there are in the bucket, the greater will our frustration be in the process.
Though a message flows from the sender to receivers, there is no guarantee the receivers will either receive the full message or even understand it. This is because the process may involve communication problems. These communication problems are known as 'noise', and this may weaken or destroy the message being sent.
The following are a few examples of 'noise':
* Language problems. The language used may not be fully understood, particularly if a receiver comes from a different background from the sender or has considerably less knowledge (technical or otherwise).
* Jumping to conclusions. The receiver might read into the message what he or she expects to see rather than what is really there.
* Lack of interest. The receiver may not be prepared to listen to the message. The message has to be designed to appeal to the listener.
* Competing environment. Background sounds ...
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The following are a few examples of 'noise':
* Language problems. The language used may not be fully understood, particularly if a receiver comes from a different background from the sender or has considerably less knowledge (technical or otherwise).
* Jumping to conclusions. The receiver might read into the message what he or she expects to see rather than what is really there.
* Lack of interest. The receiver may not be prepared to listen to the message. The message has to be designed to appeal to the listener.
* Competing environment. Background sounds (real noise) or interference from other activities in the work environment may influence the message, particularly if it is long or complicated and requires concentration by the receiver.
* Channels of communication. Effective communication will be hampered if the means chosen to pass on the message is poor.
* Cultural differences. We all have different perceptions of the world according to our backgrounds and experiences, and this may result in our interpreting a message in different ways.
* Steps in the message. If there are too many stages in the message (i.e. if it is too complicated), it may not be properly understood.
* Internal and external communication:
Internal communication is communication that takes place within an organization while external communication takes place between the organisation and the outside world.
Both internal and external communications have been transformed by rapid developments in information and communications technology. The modern organisation may have:
* A linked internal communication system to an internal network.
A local area network (LAN) may be used to connect computers within a single room, building or a group of buildings on the same site, without the use of telecommunications links. LANs may be linked to a file server, which is a permanent data store that provides files and software for other PCs and also acts as a storage base.
A wide area network (WAN) may be used to connect computers on different sites by making use of telecommunications. The great benefit is that WAN networks extend the use of the computer beyond the office by using a modem (modulator! demodulator), which converts computer signals for transmission over the telephone lines before reconverting them again.
Modems are used because telephone lines are primarily for speech transmissions and not for use by computers. Waves travelling along lines are analogue waves, where sound and images are converted into corresponding variations in electrical voltages or currents. However, the digital revolution has seen the creation of new formats that enable the transmission of video and voice signals. Information transfer is much faster under the new digital systems.
The uses for networks include the following:
* Electronic mail (email). Here computers linked through a LAN or WAN send mail between terminals. Each user has his or her own mailbox for storing messages.
* Teleconferencing. Meetings may take place with individuals widely dispersed, using a number of terminals.
* Remote databases. These include the sorts of services you can pick up on your television, such as Teletext, which provides users with vast amounts of information that is updated constantly.
* Electronic data interchange (EDJ) this allows users to exchange business documents and information (such as orders and invoices) directly through the telephone network and other, more sophisticated, electronic communication systems.
* Internal communications:
Before examining the sorts of communications that need to take place within the organisation, it is helpful to look at two popular forms of internal computer networks in organisations that are at the heart of modern internal commLinication systems - peer-to-peer and client/server networks.
Peer-to-peer networks are networks designed to serve employees with a similar status in an organtsation. These are often found in organisations in which there is a considerable blurring of the hierarchy and in which there is a teamwork approach to work.
In a peer-to-peer network, file storage and printing facilities do not come from a single server but from any computer connected to the network. Each work station can use the resources of another work station (e.g. CD-Rom drives, hard disks, fax, printers, graph plotters, etc.). Peer-to-peer networks are easy to set up and economical to run, as an expensive central server is not required.
The weaknesses of the peer-to-peer system are that it is difficult to administer if there are a great many people networked together, and the system might slow down if people are using the same facility at the same time. They are best suited for networks involving fewer than 20 computers.
Client/server networks involve the use of one, more powerful computer (the server) which is responsible for printing, the maintenance of files and any other peripherals connected to the network. The less powerful computers connected to the server are called 'clients'. Large organisations often prefer to use the client/server system because each of the computer terminals can access all the network facilities without losing any of its own processing power.
The weakness of this system is that clients are dependent on the server and, therefore, the server needs to be administered properly and looked after to make sure there are no problems with the system.
Many organisations use an intranet system, which is an organization-wide system of communications that runs over the Internet.
Common forms of internal communication
The three main ways of communicating information inside an organisation are verbal, written and electronic.
Verbal information is communicated in 'face-to-face' interactions, through telephone messages or recorded messages using answering machines and voice mail. Although verbal information can be obtained quickly, it often needs backing up in written form. For example, when you communicate an important message to a work colleague he or she might also say 'could you email me about that', or 'please can I have that in writing?'
Written information will cover a range of paper documents that are exchanged within an organisation (including memos, letters, brochures, etc.). Written information takes time to process and often requires extensive filing and distribution systems.
Electronic information is rapidly replacing other forms of communication. For example, a stock list can be transferred electronically from a supermarket to its head office. Most large organisations use an internal networking system. Nearly all networks have an email facility, and this is used to send documents in electronic form around a company.
* Giving instructions:
There are a number of ways of giving instructions inside an organization, in written or spoken form. Written instructions can be passed on by means of a memorandum (memo). Memos are the most widely used form of written communication in an organisation because they are brief and to the point. Most large organisations print their own memo pads for this purpose. Today, most memos will be sent electronically using email. The emailed memo can be sent to a group of employees who are part of a mailing list. Using emails for memos saves paper and storage space and is quicker. The main disadvantage is that if recipients do not check their email frequently, they may miss an important message. The amount of unsolicited emails are sent sometimes means important messages are inadvertently 'junked'.
An organisation's name does not normally appear on a memo for internal use, and it is not necessary to have a salutation or complementary ending. Memos should be kept as short as possible and, ideally, should deal with item only. Copies of the same memo are often distributed to a number of recipients.
The style of memoranda varies considerably. Instructions from senior management are likely to be written in relatively impersonal language, while a quickly scribbled message on a memo sheet to a close colleague may be in conversational English. It is often necessary to be more careful and diplomatic when writing memos up the seniority ladder rather than down the seniority ladder.
Another form of written internal communication is in the form of guidebooks, manuals and operating instructions. This form of communication memorandum needs to be very precise and clear, and will often use diagrams, flow charts, bullet points and numbered instructions. This is so that people carrying out the instructions have clear guidelines to follow. This sort of information will typically be stored for use on an organisation's central database so it can be shared by organisation members.
Many instructions in an organisation are given verbally. This is why managers and others using managerial skills need to have excellent communication skills.
There are a number of ways of passing on information in an organisation. The most common form of passing on information is through word-of-mouth messages. In organisations dominated by a teamwork approach, this form of communication is part-and-parcel of everyday interactions between team members. A more formalised way of passing on information in such as organisation is 'team briefing', in which managers and others with information to share brief their team on a daily, weekly or monthly basis.
There are a number of ways of passing on information in writing. Many large companies produce employee newsletters, detailing the achievements of the organization and its members, and setting out plans and changes taking place in the organisation. Some large organisations produce an official employees' report each year which is all part of the process of encouraging employees to feel part of the decision-making process. House magazines are a useful way of communicating policies, information, events and other activities. They also help to give employees a sense of belonging.
Notices are another common form of written communication. These are placed in prominent positions and used to publicise any changes in policy, dates to be remembered, functions, events taking place, etc. Notices are usually short and related to a single subject. They might be supported by artwork to catch the staff's attention.
* Reporting on events and meetings:
It is often helpful to have a report of an accurate records or to inform future decision-making processes. Particular individuals may be asked to give a verbal report (e.g. if they have attended an important conference or when they need to report an issue of major consequence - for example, the impact of a meeting with a client or an account of a breach of health and safety regulations).
Written reports are a key feature of organisational life. Informal reports may be most suitably written or typed in memo form. It is important to start with a title, and possible, a brief introduction before going on to the body of the report. Recommendations for action should be clearly identified if these have been requested.
Formal reports will have many of the following features:
* Title page (subject matter, name and position of writer, date, etc.).
* Contents page.
* Terms of reference (explaining the reason for the report).
* Procedure (how the task was completed).
* Findings.
* Conclusions and/or recommendations.
When preparing a formal report, decisions have to be made on aspects such as language and style, circulation and the presentation (including whether the report should have a cover and binding).
At the majority of meetings rising a point at a meeting is something many people do not feel comfortable about doing. The following might be a useful guide:
* Scrutinise agenda items before you attend the meeting to see if there are any areas that may be of interest to you.
* Research such areas of interest and obtain any associated reading materials.
* Plan out, either in your mind or by making notes, what you might wish to say.
* Listen to what others have to say before speaking yourself.
* Timing is important. Make sure the point you make fits into the discussion.
* Do not ramble on.
* Be tactful, and do not deliberately upset someone.
* Be assertive.
* Make your contribution coherent.
* Be ready for some sort of opposition by trying to anticipate the response you might receive to the points you are making.
* Organizational databases:
A database is a store of facts that can be called upon to provide information. A database may be used, for instance, in a bank or building society to store information on the state of all accounts. A database may be kept by a church to keep a record of all members of the congregation and their addresses. One may be used by a football club to keep a record of all tickets sold for various matches and so on.
Organisations use databases for internal communication so that members of the organisation can quickly access records and information about all aspects of the business. Databases are also used for external communication (in making orders and payments to suppliers, sending out promotional material to customers, mailing information to clients, etc.). Successful large organisations are very dependent on running an effective database.
In the world of banking, the most successful banks have been those that have the best database systems. In the past, organisations such as banks depended heavily on their physical capital (e.g. bank buildings and equipment). Today they are far more reliant on the quality of their information technology communications systems.
Modern organisations recognise that, if they have the best systems and that these are applied appropriately to their communication needs, they are strongly placed to gain competitive advantage.
* External communications:
Organisations need to communicate with a range of stakeholders, including shareholders, customers, government officials, suppliers and the community. A range of different external communications media can be employed to communicate with these groups.
Organisations are continually communicating with groups outside the organisation. These communications perform a number of functions:
* A public relations function To present a good image of the company (e.g. company reports and advertising materials).
* An informative function To provide various groupings with essential information about the company (e.g. tax records to the Inland Revenue, hours of opening for customers, details of supply arrangements to suppliers, etc.).
* A day-to-day trading function To transact the business's daily commercial relationships (e.g. making orders, buying goods, making enquiries about goods being offered, etc.).
* A transparency function Today, it is often important that outsiders can see what is happening inside the organisation so they know the company is carrying out its business in a true and fair way (e.g. by providing environmental reports and audits, ethical reports, etc.).
* Types of external communications:
(Most of the methods outlined below can also be used for internal communications.)
* The telephone:
The most frequently used form of external verbal communication is the telephone. Its great benefit is that it is fast and allows people who would find it difficult to meet to converse.
A telephone call may be the first point of contact an outsider has with an organisation. If a bad impression is created through this first call, it may be difficult to correct. Developing a telephone technique that makes the caller feel at ease and that creates the impression of efficiency is always very important.
* How to answer the telephone:
If you have to make a telephone call, make sure you:
* Have all the necessary information to hand
* Know whom you want to talk to
* You are prepared to leave a message on an answering machine, if necessary
* Speak clearly.
* Interviews:
Another form of external verbal communication is an interview with someone from outside the organisation who may be interested in something the organisation has done (e.g. press, radio or television). Part of a public relations strategy in such circumstances is to build up a positive perception and image of the organisation. The response should, therefore, be designed to improve public understanding of the organisation's actions.
* Business Letters:
The business letter is still the most widely used form of external communication. It may be used, for example, to:
* Make arrangements without the need for parties to meet.
* Provide both parties with a permanent record of such arrangements.
* Confirm verbal arrangements.
A well-written business letter conveys its message while maintaining goodwill. If a letter is sent promptly, is well set out and conveys its message accurately, the person who receives it will develop a favourable impression of that organisation and is more likely to want to have further dealings than if the letter is late and inaccurate.
The layout, style and appearance of business letters - and even the envelope - vary from organisation to organisation. Most will try to create a good impression, particularly by going for an eye-catching heading and layout. Organisations often have a house style they encourage all administrative staff to follow. Business letters are usually typed on A4 or AS paper, and a fully blocked, open-punctuated style is now the most common form of display.
A business Letter will usually have the following features:
* A heading or letterhead
* A reference, enabling the letter to be filed and traced later.
* A date.
* The inside address - which is that of the person who will receive the letter.
* The salutation (Dear Mr. Tighe).
* The body of the letter.
* The complimentary close (Yours sincerely . . .).
When writing a business letter, always plan what you are going to say beforehand. Organise your information into a logical sequence and try to keep your language simple. Be courteous yet direct. After you have written the letter, check it for spelling mistakes and grammatical errors.
* Facsimiles (faxes):
A form of external communication that has experienced massive expansion over recent years and that is capable of sending both written and visual information is the facsimile ('fax'). Fax machines send information electronically over telephone lines.
* Electronic mail:
As an alternative to writing letters, organisations widely use electronic mail (email). With email sent through a service provider (e.g. CompuServe), the sender forwards the document to the receiver's email address (which is actually a small area on the service provider's computer), not directly to the recipient. When the receiver logs on to his or her computer system, he or she can see on screen there is a message waiting which he or she can either read while logged on to the system or store on the hard drive to read later. Anyone who is connected to the Internet and has a modem can use email.
The key advantages of email are that:
* It is faster than ordinary mail ('snail mail').
* You don't have to bother to print the message, put it in an envelope with a stamp, etc.
* It is more environmentally friendly as less paper and energy (in the delivery process) are used.
Disadvantages are that people may not read their email regularly, and not everyone has access to email facilities.
* Videos and CDs:
Corporate videotapes and corporate CDs have become increasingly popular over recent years as methods of providing a variety of interested parties with visual information about an organisation's activities.
* File transfers:
While electronic mail transfers text between computers, it is quite slow at transferring very large files. Another specialist system (known as file transfer) is therefore better for sending files such as computer programs, graphics and so on, using a method that bunches the data into packages. The receiving computer will check each bunch to make sure no errors have been made. If everything is fine, it will confirm this and wait for the next bunch.
* Electronic data interchange (EDI):
Increasingly, the world's giant food manufacturers and retailers are setting up large-scale systems for the electronic purchasing of goods. Manufacturers such as Coca-Cola and Heinz have joined together with retailers such as Sainsbury's and Carrefour (of France) to create a company known as GlobalNetFxchange. EDI is a network link that allows retailers to pay suppliers electronically without the need for invoices and cheques, thus dramatically reducing time, paperwork and costs.
* Video conferencing:
Video conferencing has improved out of all recognition as a result of the development of digital systems. Video conferencing makes possible face-to-face meetings with people who are geographically separated. Desktop systems make it possible for participants in a conference to communicate with each other without leaving their desks.
Desktop video conferencing requires a powerful PC, a sound card, a video camera and a video compression card.
The advantages of video conferencing are as follows:
* Savings in time and travel expenses (including expensive hotel bills).
* Ready access to supplementary sources of information (e.g. pulling down and transmitting files from a computer for discussion).
* Enabling people who work from home to communicate with others (e.g. at head office).
* Web sites:
Perhaps the most dramatic increase in the use of electronic media for the purpose of external communication is the creation of Internet websites. Most companies have an Internet web site they use for all forms of external communications purposes and for public relations activities.
Formal communication in an organisation is communication that takes place through the recognised channels (e.g. official meetings, memos, newsletters, etc.). Informal communications are ones that take place that are not part of the 'officially' recognised networks of the organisation. This does not mean informal communications are necessarily negative or anti-organisational. Indeed, much of the good work in organisations is carried out by organisational members taking initiative into their own hands and coming up with ideas that directly benefit the organisation. Informal communications can also serve as motivating forces because they are based on individual initiative.
Research into the nature of communications in organisations indicates it is important to have both formal and informal communications. For example, management may break information to employees through team briefings, but the full understanding of what management has had to say may come about only through discussions between team leaders. Unofficial discussions and versations have an educative impact an organization, and most managers gnise the importance of informal communications networks.
* Upward and downward communication:
Much of the communication in old-fashioned, traditional industries was carried out in a downward direction. Managers created the systems, the rules and the work programmes and communicated these down line to junior employees.
There are clear advantages to such an approach:
* Senior managers are able to set targets and objectives, and then give the instructions to make sure they are carried out because there is a clear line of command, instructions can be clear and consistent.
* Operating with an efficient system in which fewer errors are made can cut costs.
However, in recent years, there has been more of an emphasis on upward communication. This is felt to be important because:
* Good ideas can bubble up from below from people who deal with 'nuts and bolts' decisions on a day-to-day basis.
* Many people at the bottom of an organisation are very talented and have good ideas that are worth listening to.
* Managers can be made aware of likely problems before they occur.
* It provides feedback on the decisions being made by senior managers.
* People lower down an organisation are more likely to know what is practical in a working setting than those higher up.
* Being asked to be involved in the communication process motivates those lower down in the organisation.
* Communication and the achievement of business objectives:
McDonalds needs to create the communication channels that most effectively enable it to achieve its business objectives. Clearly, in some instances downwards communications channels may be most effective - particularly where clear instructions need to be carried out that must to be followed to the letter.
* Information and communications technology (ICT):
In the first decade of the twenty-first century, we can see that ICT has totally transformed ways of communicating within business. Examples are as follows:
* The use of email to replace many communications that previously were carried out by letters, faxes and phone calls.
* The use of networked databases to replace organisations' traditional systems of filing and storing information.
* The use of computers to replace a range of standardised operations involving the interface between an organisation and its customers (e.g. registering an order, requesting items from stores, maintaining stock levels, organising delivery, preparing invoices, controlling credit and recording payment).
* Enabling the contracting out of work previously carried out within an organisation so that communications are now with the external contractor rather than an internal department of the organisation.
* The use of an Internet web site to create a communications link between the organisation and its global market.
* The use of the Internet to find out about all the current developments that is taking place in the field in which the organisation is operating.
* The use of digital methods for much faster communications, involving a range of visual, sound, and other forms of communications that enable face-to-face contact between an organisation and people in far-flung places.
Traditional businesses were often organised into functional specialisms. Each person in the organisation carried out one step before passing the job on to someone else. Often, a job was passed on from one department to another. For example, a few people in the marketing department, who pass on the results to the technology department, carry out market research. The technology department comes up with some proposals that are passed on to production . . . and so on.
* Transformed businesses:
Today, many business writers use the term transformed business'. Such an organisation is run according to business processes rather than functional specialisms. Teams of people from different functions, working together to achieve the aim of the process, handle the business processes.
In a transformed business, people involved in particular processes are given more freedom to make decisions and have more information at their finger-tips by virtue of formation and communications technology.
Organisations based on business processes put a high premium on information and on sharing ICT facilities. ICT has a very important role to play. Groups working together in a team will need to share information, and computer terminals of different specialists are linked, so that information is available to all.
One major benefit is a cost reduction as a result of simplifying the work flow. A job stays with one individual or team instead of passing in batches from specialist to specialist. The team is given authority to make decisions, as well as to the information and tools needed.
Another benefit is the improved responsiveness to customer needs. Front-line staff are given powers to act rather than passing problems up to line managers. Improved job satisfaction can result.
* Strengths and weaknesses of ICT:
It seems likely that ICT will have the same sort of impact in transforming production systems on a worldwide scale. As the Internet expansion increases, so too will the knowledge revolution - leading to knock-on effects that have the potential to transform businesses in new and unforeseen ways.
Information and communications processing systems and their applications influence the ways in which business organisations operate and compete at all levels of decision-making. Given this vital role it is essential constantly to appraise the effectiveness of the systems to ensure they provide the maximum possible benefits for the organisation.
One way of analysing the effectiveness of an information and communications processing system is to look at a simple operating application. Imagine that a customer puts in an order. Now consider what happens. What if the organisation takes a long time to process the order? Having processed the order, they then make mistakes with the transaction and deliver the wrong goods. From the customer's point of view, he or she will be less than satisfied with the way the organisation has dealt with the order. The limitation of the information processing system has influenced a customer, who will not come back for repeat business. The system has, therefore, strategic and competitive implications.
It is imperative to create user-friendly communication systems that deliver what they promise. All too often we see the development of new communication systems that fail to deliver.
An efficient system would, on the other hand, have meant the customer was satisfied and would probably return for more business. Because information and communications processing affects the ways in which an organisation competes, an effective system should create genuine competitive advantage.
There are a number of ways in which the effectiveness of an information and communications processing system can be analysed.
* Fitness for purpose:
Information and communications processing systems must be developed that best support the organisation in meeting its objectives. By being fit for the purposes intended, the information and communications system should help to provide solutions and not create problems. A system that is fit for its purpose should reap results - an organisation should be able quickly to point to ways (measures) in which it is meeting its objectives more effectively.
To ensure a system does meet the required objectives, it is important to provide feedback on its activities and to control its output.
* Cost:
Cost has a clear influence upon the design of an information and communications processing system. For example, a manager may have a budget constraint that determines how much can be spent upon its introduction. One danger of a tight budgetary constraint is that it can be too restrictive and can make it difficult to develop a system that undertakes activities as efficiently as originally required.
* Value for money:
The most important element in any system design is that it should eventually result in the maximisation of benefit relative to cost. There are two ways of assessing whether or not a new system might provide value for money. Quantitative analysis identifies clear savings that have been made through the introduction of the new system e.g. fewer staff, less paperwork and reductions in other costs).
Qualitative evaluation is more difficult as this identifies the ways in which a series of activities and services have improved as a result of spending on the new system. Though difficult to quantify, these are very important and may include higher morale, work that is less tedious and improved customer satisfaction.
* Effects upon the efficiency of the user:
Information and communications processing systems must be developed to meet the needs of a number of users. The overall aim should be to reduce the time taken to carry out activities, to increase the speed with which output is generated, to undertake a larger volume of work and to make it easier for the user to access and operate the system. It is important, therefore, when developing a system to consider the user's needs.
* Capacity to retain and use information:
The most important element in any system is its capacity to generate output. A good information system will have the right information available when required and in the form specified by the user.
* Meeting LegaL and other requirements:
Any system must take into account the requirements of the Data Protection Act and other legal requirements
(e.g. concerning health and safety).
* Improving security:
If data or program security is important, a system must ensure unauthorised people do not access it. Security features may include electronic controls (such as passwords and data encryption) to ensure that the system is kept secure.
Unit 1 Business At Work
Jaspal S. Johal Page 1 of 23
