Paper No. : 08 Module No : 28 Cross- Functional MIS

1

Management Management Information System

Cross-Functional MIS

Paper Coordinator Principal Investigator

Dr. Vijaya KhaderFormer Dean, Acharya N G Ranga Agricultural University

Content Writer

Development Team

Dr. Sudhanshu Joshi School of Management, Doon University, Dehradun PIN 248001, Uttarakhand, INDIA

Paper No. : 08 Management Information System Module No : 28 Cross- Functional MIS

Principal Investigator

Dr. Vijaya KhaderFormer Dean, Acharya N G Ranga Agricultural University

Prof.(Dr.) S.P. Bansal Vice Chancellor, Maharaja Agreshen University, Baddi, Solan, Himachal Pradesh, INDIA

Paper Coordinator Prof. Manu Sood Director, University Institute of Information Technology, Himachal Pradesh University, HP, INDIA

2



The organization of the module includes (1) understanding how a cross-functional decision

making model that can be used to measure the MIS performance using a conceptual

framework; and (2) To categorize, synthesize, and analyze the cross-functional MIS

performance of a business organization.

To determine the above learning objectives, the following questions have been addressed:

(a). What are the functional areas in the business firm that can become the part of overall

enterprise level Information System.

(b) What are the common areas and factors responsible for conceptualization of the Cross-

functional MIS.

Description of Module

Subject Name Management

Paper Name Management Information System

Module

Name/Title

Cross-functional MIS

Module Id 28

Pre-requisites Basic Knowledge of Computers and Organization Behavior

Objectives 1. To identify the major components of Management Information

Systems

2. To understand how a cross-functional decision making model that

can be used to measure the MIS performance using a conceptual

framework

3. To analyze the functional and operational efficiency in Cross-

functional MIS

Keywords Problem Solving; Technology Management; Information Systems(IS);

Cross-functional MIS; Enterprise Resource Planning; IS Management; IS

Development and Operations

Content Reviewer

Dr. Vijaya Khader

Dr. MC Varadaraj

Quadrant I

3



1. Introduction

The term “Integrated Management Information System”, refer to a very highly organized

combination of personnel, equipment, and facilities performing data storage and retrieval,

data processing, transmission and display, all in response to the needs of decision makers at

all levels of the business." (Hershner Cross, 1978).

“The formal group of processes that, operating on a collection of data structured according to

the needs of a company, compiles, elaborates and distributes part of the information

necessary for the operation of the company, and for the related management and control

activities, supporting, in part, the decision-making processes necessary to carry out the

business functions of the company." (Hurtubise, 1984).

1. Importance of Information Systems

In order to have a viable information system that is responsive to a variety of information

needs, all the measurable data pertaining to the organization must be organized in such a

manner that it can readily be recorded, stored, processed, retrieved, and communicated as

required by a variety of users. Conceptually, information system converts raw data into either

a consumable report or input for a later phase of the processing cycle. Figure 27.1 depicts the

Inter-disciplinary relevance of MIS.

Management Information

System (MIS)

Computer

Science

Data

Programming

Management

Science

Management

Accounting

Management

Human

Behaviour

4



Figure 2-1 depicts the Inter-disciplinary relevance of MIS (Source: Nolan and Wetherbe, 1980). 3. The Effect of Information Systems on an Organization.

Every organization has one or more information system for its various management levels.

These systems have always existed. Their goal consists of retrieving daily operational data,

which can then be processed and used to prepare reports that respond to management

needs. Mangers of all levels must make frequent choices, selecting from a number of

possibilities, not only to attain organizational objectives but also to operate, control, plan, and

supervise.

Sub-System 5

Sub-system 2 Sub-system 1

Sub-system 4 Sub-system 3

Inputs

Inputs 1

Inputs 2

Inputs 3

Inputs N

: :

Outputs

Outputs 1

Outputs 2

Outputs 3

: : Outputs N

System

Environment

5



Figure 27.2 (a): General Model of a System

A Management Information System (MIS) is an evolutionary design in which various

organizational units use one system; a system that exploits computer technology and makes

frill use of data, information and human resources. In converting data into information and

information into significant actions, the MIS provides tools for all levels of management so

that subsystems may function adequately.

Figure 27.2 (b): Model of MIS Transaction process Cross-Functional MIS effectiveness may be used to determine Information Technology (IT)

impacts on the overall business productivity. A number of effectiveness measures have been

identified to evaluate the effectiveness of Cross- Functional MIS in the literature under

Personnel

Software Hardware

Procurement Database

Inputs Outputs

Transaction Processing

Information Reporting

Decision Support

Programmed Decisions

System

Data

Request for Information

Resources

Feedback

Efficiency Effectiveness

6



various names, there are six general measures: Cost/benefit analysis, multi-attribute analysis,

simulation, the critical success factors, utilization, and informal approaches. These measures

have been identified from a number of studies, which review the MIS evaluation literature

(Dickson, Senn & Chervany, 1977; King & Rodriguez, 1978; Zmud, 1979; Hamilton &

Chervany, 1981a; Ives, Olson & Baroudi, 1983; Ives & Olson, 1984; Trice & Tracy, 1988;

Wrigley & Dixter, 1991; Szajna & Scamell, 1993; Doll, Xia & Torkzadeh; 1994; Barki &

Hartwick, 1994; Pitt, Watson & Kavan, 1995; Vandyke & Kappelman, 1997; Eldon, 1997;

Pitt, Watson & Kavan, 1997).

7



4. The Need to have Cross-Functional Management Information System

There is a constant requirement for a cross-functional enterprise level Information System. Table 4-1 and 4-2 Explain the

various aspects of Integration of Cross-Functional MIS and Benefits from it.

Table 4-1: Main aspects of integration of Cross- Functional MIS

Integration aspect Definition Main characteristics Studies

Strategy Number and implementation sequence of MSs that the organization decides to integrate

Establishing: (a) QMS first and then the EMS, (b) EMS first and the QMS second, (c) the two systems simultaneously

Karapetrovic and Willborn (1998b), Douglas and Glen (2000), Karapetrovic (2002), Karapetrovic et al. (2006), Bernardo et al. (2009, 2012a).

Methodology Models or tools used in the process

National standards are available to support integration

SAI Global (1999), Dansk Standard (2005), AENOR (2005), BSI (2012), ISO (2008).

Academic authors Karapetrovic and Willborn (1998a), Labodov a (2004), Zeng et al. (2007), Asif et al. (2009), Tari and Molina-Azorín (2010)

Level Degree achieved by the IMS

(1) no integration (MSs are managed separately), (2) partial integration (some components of the MSs are integrated), (3) full integration (all components of the MSs are integrated into a single system)

Wilkinson and Dale (1999), Karapetrovic (2003), Beckmerhagen et al. (2003), Karapetrovic et al. (2006), Bernardo et al. (2009).

Audits' systems Integration level of internal and external audits

Higher level of integration in internal audits than in external audits

Karapetrovic and Willborn (1998c), Krauss and Grosskopf (2008), Bernardo et al. (2010, 2011a),

8



Simon et al. (2011, 2014)

Internal Global organization

Increase of organizational efficiency Wagner (2007), Karapetrovic and Casadesús (2009), Santos et al. (2011), Simon et al. (2011, 2012a, 2012b), de Oliveira (2013), Simon and Douglas (2013).

Task simplification Simon et al. (2012a), Simon and Douglas (2013).`

Optimized resources (financial and human) to maintaining a single goal

Salomone (2008), Santos et al. (2011), Abad et al. (2014).

Management cost reduction Santos et al. (2011), Simon et al. (2011, 2014), Rebelo et al. (2014).

Improved organization Karapetrovic and Casadesús (2009), Santos et al. (2011), Sampaio et al. (2012).

Time resources saved Salomone (2008), Simon et al. (2011), Rebelo et al. (2014)

Department barriers elimination and higher collaboration

Simon et al. (2012a).

Continuous work Karapetrovic and Casadesús (2009)

Greater ease of decision making de Oliveira (2013).

Greater capacity to achieve objectives Abad et al. (2014)

Organizational global strategy improvements

Simon et al. (2012a)

Rule out conflicts of different company strategies

Salomone (2008).

Common management policy, objectives, targets and Key Process

Rebelo et al. (2014)

9



Indicators related to performance

Better and easier communication system

Karapetrovic and Casadesús (2009), Santos et al. (2011), Simon et al. (2012a, 2014), de Oliveira (2013), Abad et al. (2014).

Organizational culture improvements Simon et al. (2012a), Simon and Douglas (2013), Rebelo et al. (2014).

Improvements to risk management Wagner (2007), Hamidi et al. (2012), Rebelo et al. (2014).

Competitive market advantage Abad et al. (2014).

Easier compliance of legislation Santos et al. (2011)

Human Resources Increased employee training Santos et al. (2011), Holm et al. (2014).

Optimization/unification of training activities

Salomone (2008)

Better employee awareness of the importance of their work as a contributor to the whole organization

Karapetrovic and Casadesús (2009), Simon et al. (2012a), Abad et al. (2014), Rebelo et al. (2014).

Team work Curkovic et al. (2005), Hamidi et al. (2012), Holm et al. (2014).

Performance More competent workers Abad et al. (2014)

More motivated staff Abad et al. (2014)

Increased performance Wagner (2007), Tarí et al. (2010), Santos et al. (2011), Hamidi et al. (2012).

Improved quality of products and/or services

de Oliveira (2013), Abad et al. (2014)

10



Increased Productivity Hamidi et al. (2012).

Increase in the reliability of products and processes

de Oliveira (2013).

Improvement of collection and analysis of customer feedback

Reduction in duplication of policies, procedures and records

Simon and Douglas (2013), Simon et al. (2014).

More agile system with less redundancy

Karapetrovic and Casadesús (2009)

Simplified MSs resulting in less confusion, redundancy and conflicts in documentation

Salomone (2008), Karapetrovic and Casadesús (2009), Santos et al. (2011), Simon et al. (2011), Sampaio et al. (2012).

Reduction of bureaucracy Salomone (2008), Santos et al. (2011), Hamidi et al. (2012), Abad et al. (2014), Rebelo et al. (2014).

Elimination of conflicts between individual systems

Rebelo et al. (2014).

Improvement of systems understanding and use

Simon et al. (2012a), Simon and Douglas (2013)

Easy to add a new standard Karapetrovic and Casadesús (2009), Simon et al. (2011, 2012a).

Flexibility of the standards Crowder (2013)

Better definition of management responsibilities and authority

Salomone (2008), Santos et al. (2011), Sampaio et al. (2012), Rebelo et al. (2014).

Audits Unification of internal audits Salomone (2008), Santos et al. (2011), Rebelo et al. (2014).

11



Reduction of costs of internal audits Abad et al. (2014).

Simplification of audits Simon et al. (2011)

Better use of audit results Simon et al. (2012a, 2012b), Simon and Douglas (2013).

Improved multiple audits Simon and Douglas (2013).

External Market Company image improvements Wagner (2007), Karapetrovic and Casadesús (2009), Santos et al. (2011), Simon et al. (2012a, 2012b), Crowder (2013), Simon and Douglas (2013), Abad et al. (2014),

Sustainability components in a global market

Rebelo et al. (2014).

Stakeholders Improvement of partnerships and satisfaction with the main stakeholders

Simon et al. (2012a), Rebelo et al. (2014)

Table 4-2: Benefits of Using Cross- Functional Management Information Systems (MIS)

Benefits Inter-functional MIS Cross- Functional MIS

Efficiency (productivity, cost savings, reduction in mistakes and rework, shorter lead times improved management control)

Singels et al. (2001), Gotzamani and Tsiotras (2002), Pan (2003), Arauz and Suzuki (2004), Lo and Chang (2007), Martínez-Costa et al. (2008), Singh (2008). McAdam and McKeown (1999), Singels et al. (2001), Gotzamani and Tsiotras (2002), Pan (2003), Arauz and Suzuki (2004), Casadesús and Karapetrovic (2005), Lo and Chang (2007), Zaramdini (2007), Martínez-

Yin and Schmeidler (2009), Gavronski et al. (2008), Padma et al. (2008), Zeng et al. (2005).

Improved customer satisfaction (reduction in complaints, etc.)

Gavronski et al. (2008), Padma et al. (2008), Ann et al. (2006).

12



Costa et al. (2008), Singh (2008).

Improvements in employee results (motivation, satisfaction, teams, communication, knowledge)

Arauz and Suzuki (2004), Casadesús and Karapetrovic (2005), Rodríguez-Escobar et al. (2006), Lo and Chang (2007), Zaramdini (2007), Martínez-Costa et al. (2008).

Gavronski et al. (2008), Tan (2005).

Profitability Corbett et al. (2005), Lo and Chang (2007), Zaramdini (2007), Benner and Veloso (2008), Martínez-Costa et al. (2008)

Gavronski et al. (2008), Wahba (2008), Link and Naveh (2006), Zeng et al. (2005).

Improvement in systematization (improved documentation, work procedures, clarity of work, improvement in responsibilities)

Gotzamani and Tsiotras (2002), Rodríguez-Escobar et al. (2006), Lo and Chang (2007), Singh (2008).

Schylander and Martinuzzi (2007).

Market share Rodríguez-Escobar et al. (2006), Lo and Chang (2007), Zaramdini (2007), Singh (2008).

Zeng et al. (2005).

Sales and sales growth Arauz and Suzuki (2004), Casadesús and Karapetrovic (2005), Corbett et al. (2005), Singh et al. (2006).

Link and Naveh (2006).

Improved image Terziovski et al. (1997), Lee (1998), Magd and Curry (2003), Lo and Chang (2007), Zaramdini (2007).

Padma et al. (2008), Tan (2005).

Exports Magd and Curry (2003), Arauz and Suzuki (2004), Singh et al. (2006).

Padma et al. (2008), Link and Naveh (2006).

Improvement in competitive position/competitive advantage

Abraham et al. (2000), Rodríguez-Escobar et al. (2006), Singh et al. (2006), Lo and Chang (2007), Zaramdini (2007)

Ann et al. (2006), Gavronski et al. (2008), Schylander and Martinuzzi (2007).

Improved relationships with suppliers Gotzamani and Tsiotras (2002), Casadesús and Karapetrovic (2005), Rodríguez-Escobar et al. (2006), Zaramdini (2007).

Gavronski et al. (2008), Padma et al. (2008).

13



Improved quality in product/service Gotzamani and Tsiotras (2002), Magd and Curry (2003), Zaramdini (2007), Singh (2008).

Melnyk et al. (2003).

Improved relationships with authorities and other stakeholders

Pan (2003), Magd and Curry (2003). Gavronski et al. (2008), Schylander and Martinuzzi (2007), Zeng et al. (2005).

Environmental performance Yin and Schmeidler (2009), Russo (2009), Gavronski et al. (2008), Barla (2007), Zeng et al. (2005), Tan (2005), Potoski and Prakash (2005).

14



5. What is the Framework for IT Enabled Cross-Functional Integration

Level Architectural Component

Conceptual Level Enterprise Architecture

Organizational hierarchy

Business Objects and Events

Cross-functional workflow models

Logical Level Information Architecture

Enterprise wide data models

Meta-Data repository

Enforcement of Common Data definitions

Server and Client level business

Process logic

Physical Level Computing and Network Architecture

Computing nodes (Server and Clients);

Data Storage Devices

Physical Database Segment

Network Connections

Network Protocols

Operating Systems Middleware:

API, ODBC, CORBA, COM/ DCOM

Server level Stored Procedure and Client Level user Interface

Programs.

IT based cross-functional integration (CFI) is the fundamental underlying requirement for the

implementation of innovations to streamline, improve and automate business processes. A

recognition and understanding of this fundamental infrastructural requirement can contribute

to its consideration and incorporation in the design and development of information systems

structures, right from the early stage of such efforts. CFI issues can be considered throughout

15



the IS architectural design and development phases as a fundamental design requirement,

independent of any current or future BPR or restructuring initiatives.

CFI facilitate easier implementation of innovations such as BPR (Hammer, 1990), cycle time

reduction (Stalk, 1998; Marucheck, 1992), group processes (Rao and Jarvenpaa, 1991),

and Workflow automation (Bitzer and Kamel, 1996; Joosten and Schipper, 1996). Further,

identification of the importance of CFI and its implementation in successive enhancements to

information systems architecture would lay the foundation for future process improvements

throughout the organization, whether through a radical restructuring of selected processes or

through a radical restructuring of selected processes or through a gradual improvement of all

processes, e.g. in the mode of TQM (Earl and Khan, 1994).

But their are always challenges of high failure rates for BPR efforts (Clemons, Thacher, and

Row, 1995; Moad, 1993; Bashein, Markus, and Riley, 1994). Researchers have reported

very high failure rates for initial BPR efforts (Clemons, Thacher and Row, 1995; Moad,

1993; Bashein, Markus, and Riley, 1994). One cause of such failures many be weak CFI

could limit the scope and success in implementing process innovations, which usually cross

functional boundaries. Further, the need for large, unplanned investments to overhaul IS

infrastructure. CFI is useful for the improvement of organization’s performance in areas such

as product innovation (Swink, Sandvig, and Vincent, 1996), and R&D (Miller, 1995),

product quality (Numerof and Abrams, 1994), development capability (Wheelwright and

Clark, 1992), and TQM and quality improvement efforts (Porter, 1991).

6. Cross-Functional Integration Cross-functional integration is the establishment of mechanisms and links that facilitate the

needed coordination of the activities of different functions to ensure that these functions work

together effectively to achieve the overall objectives of the organization. Such integration is

also needed across different organizations to create a well managed, integrated supply chain

of cooperative organizations with high responsiveness and low transactions costs. Therefore,

CFI issues have been considered important at the Intra-organizational as well as the inter-

organizational level.

16



7. Intra-organizational CFI Close cross-functional coordination is vital for the effective functioning of an organizaito,

much before the induction of Information Technology to support the information and process

flow. In manufacturing and service organizations, sales, production and purchasing have to

closely coordinate their activities to develop and adjust production and production and

procurement plans to optimize inventories at all stages of production in line with customer

preferences and demands. Budgeting, recruitment, manpower levels, and production

capabilities need to be tied to short term and long term production plans. Activities of

warehouse, good movement, various production lines, maintenance, tools engineering, and

shipping also need to be coordinated. Similar coordination is also needed among various

functional units in the non-manufacturing sector. For example, in Micro-finance companies,

coordination is needed between different functions that perform credit checking, quoting,

rating, underwriting, and other related processes.

Documents

Paper No. : 08 Module No : 28 Cross- Functional MIS