Page 93 - DMGT505_MANAGEMENT_INFORMATION_SYSTEM

Management Information Systems

Notes operation of the reticular structures. An IOS may play an important role in the coordination of
interdependent activities, which would be carried out by distant organizational units.
The concept of network emphasizes the interdependency among enterprises, which is provoked
by the presence and the sharing of the following key attributes: objectives, experience, labour,
taking of decisions, responsibility, trust, and acknowledgement or reward. The enterprises
within a network will adopt a common objective, namely to provide a quicker and better
service to the final customer. With this aim in view, independent organizations will have to
establish close interrelationships, in which Information Technologies have a vital role to play.
In this way, the aim of optimizing the flow of profits along the supply chain could be achieved
too. IOSs are, basically, new means to facilitate the relationships among organizations; they are,
therefore, a strategic instrument. However, an IOS allows to obtain operative advantages too,
such as
 Reducing paperwork and manual operations;

 Reducing the stock levels;
 Accelerating the product and material flow;
 Standardizing of procedures;
 Accelerating the flow of information about changes on the demand;
 Reducing telecommunication costs.

The IT is a basic support that facilitates the co-ordination of different enterprises through EDI
systems, shared databases, e-mail, videoconferences, which will allow them to work together.
They will be able to share information on the markets, on the needs for materials, on stock
levels, production schedules, and delivery programs. A key factor in an efficient exchange of
information within a network is the computer connection of its members. The computer links
accelerate the transference of information, since it provides the automatic transmission of data
between physically distant computers. These links can be used as a strategic instrument to
increase the competitiveness of the enterprise, binding it electronically with its customers and
suppliers through inter-organizational systems. The electronic connection facilitates the
approaching of the linked enterprises, which means that the companies may provide the customers
direct access to the internal databases, as well as just-in-time stock control.

!
Caution The enterprises can reduce their dependency on strategies of backward-forward
integration in order to ensure the control over the production process.

Self Assessment

Fill in the blanks:
11. By means of a ............................... structure, the competitive position of the enterprises can
be reinforced as these concentrate on what they do best, and on what maintains their
success in the market.
12. An IOS may play an important role in the coordination of ............................... activities,
which would be carried out by distant organizational units.

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