The main objective of managing information system is to meet all the general information need of the managers of the organization or in its “sub units” where it can be various levels of management level in the organization (Semi et al. 2011). According to Watson in 1987 Managing Information system can be defined as “an organizational method of providing past, present and projected information related to an internal operation and external information. It supports planning function and operation control of an organization by furnishing uniform information in the proper time frame to assist the decision makers” (Semi et al. , 2011). Data can be defined as raw facts and distinctive piece of information that are formatted in a distinctive way.
Information can defined as a collection of facts regained in a distinctive way that they have value beyond the value of the facts. System is defines as a set of elements or components that interact to accomplish a goal. System consists Of input, transforming process and output. Input can be defined as gathering data what goes in to the compute Process can be defined as converting data into useful output. Output is the useful information. Information system;s role in an organization Fig:l Role of information system in organization (Body et al. 2005) People are the most important element in computer based information system. People use MIS in all level of hierarchy. In an organization they should work in way that adds value to the resources of the company because they are the one who enters the data. If we select the wrong people the information entered will also invalid and output will also be invalid garbage in garbage outdo. For example in the above diagram let us take an example of a manufacturing industry in which the input data could include cost, availability of material, staff and equipment.
Information of input helps to manage the transforming processed which manages delivery schedule, quality cost and opacity utilization and output includes information of goods, service and customer satisfaction gained due to timely delivery. (Body et al 2005). The quality Of output helps in attracting and retaining the input resources. So it is important that quality is maintained throughout the process. Background of the Company Lie & Fungi was founded on 1906 it was an export trading company in southern China. After the second world was it was permanently located to Hong Kong.
Its a third generations company which is presently managed by William &Victor both Harvard graduates. In 2000 Lie& Fungi was a $2 Billion lobar export trading company with 3600 staffs in 48 offices in 32 countries. In 2000 Lie & Fungi was nearly 5 times its near competitor and 69% of the revenue was from LIST and 27% from Europe. Lie & Fungi had achieved this growth by organic growth due to rapid industrialization of the Asian markets and by a series of acquisitions in 1995 Inchoate Buying service and in 1 999 they had acquired Swirl Group & Kimberley.
Lie & Fungi had expanded its customer base in Europe.. Lie & Fungi used to supply hard goods which included fashion accessories, furniture’s, gifts, handicrafts, fireworks, toys and travel goods and soft goods which include apparels woven and knit for women, men and children. They had higher margin for hard goods. Margin for soft goods were 6% to 8% and hard goods were 1 0 to 30% depending upon the complexity of sourcing the raw material. In 1996 Lie & Fungi had adopted a 3 year plan. Lie & Fungi in 2000 had outperformed The Hang Seen Index by 75%. They had a market capitalization of $ 6. Billion dollar. After analyzing Lie & Fungi I strongly believe that company is market driven and has a growth strategy and it is evident from the case study that the revenue and profit of the company is increasing in a year on year basis. SOOT Analysis SOOT stands for Strength, Weakness, Opportunities and Threat. SOOT analysis as a tool which is used to quickly analyses the various aspect of current scenario of business process which is undergoing change (Bib, 2009). The strength and weakness constitute internal factors and opportunities and threat constitute external factors.
In 1 957 Selenium had said that SOOT refers to matching the internal resources to external threat and opportunities (Gill, 2006). In SOOT analysis the best strategy that a company should execute is to exploit the organizational strength and opportunities to authorize its threat and control its weakness (Griffin, 2011 STRENGTH (INTERNAL) 1. Supplier facility screening e. G. Direct access to manufacturing sites.
Taylor, 2006) The above diagram shows the entire supply chain process. The tier 3 supplies materials to tier 2 susupplier’s The tier 2 susupplier’supplies to tier 1 suppliers and they in turn supply directly to the ware house or factory. The finished goods are transported to the distribution cecentersnd from the distribution cecentershey are sending to different stores. The entire process involves lot of information and data transfer from sourcing the raw material to manufacturing and distributing it -Managing information plays a significant role in supply chain management.
SiSmithevi,E in 2000 had stated that “Supply chain management is a set of approaches ututilizedo efficiently integrate suppliers manufacturers, ararousesnd stores so that merchandise is produced and distributed at the right quantities, to the right location, at 8 the right time in order to miminimizeystem wide cost while satisfying service level requirement” (OvOverbook2009). AdAdvantagesf supply chain management information system includes high quality relevant timely information, it gives alerts for replenishment of inventory’, capacity activation, it helps in sysynchronizingaterial flow.
It helps in preventing the supply chain management from becoming complicated . ltLetelps in to increase the supply chain management erreferenceSoSorrowt al. , 2009). With the implementation of extranet sites in 2000 some of the customers of LiLieFuFungiad connected the extranet sites directly to their companies EPPER According to ChChangend ChChangen 2009 to manage the supply chain that consist of consumers, subordinates and suppliers the ororganizationill need large Information technology which should be integrated with the existing Enterprise resource planning system of the ororganizationn different sites (Y.
C. Wang et al. , 2010). In 2000 LiLieFung0 had decided to start a new E commerce business and to invest 200 million in that enendurehich would be an integral part of their existing business. In 2005 StStanderad stated that the building blblocksof Supply chain is the integration, collaboration and use of IT in the system. ReRerann 2009 had emphasized that EPPERs the back bone of Supply chain integration. The recent advances in Information technology had facilitated the coordination among the different system in the supply chain (AkKayak ErEureka2010).
The integration with the internet is known as neensupply chain management. It is evident from the case study that the extranet and intranet sites had laladedn important role in the efficiency of the cocompany’supply chain management . The implementation of intranet had simplified their internal communication. It reduced their operational cost by sending high quality digital images and online inspection. The implementation of extranet sites had acted as a platform through which the buyers can directly interact with the manufactures and can even change the design model .
The extranet platform have also helped in product development. It was also beneficial for its customers as they can monitor the production which promoted quick response. The buyers also had advantages like until the cloth was dyed they could notify the manufactures to change the cocolornd until the fabric was cut they could change the design. The extranet site was so useful that some Of the customers had connected it to their Enterprise Resource plan niinningDisadvantages of IT in Supply chain management gull Whip Effect 9 Fig 3 Bull Whip Effect (Russell & W.
Taylor, 2006) It shows that the slight demand variability magnifies as it moves back the upstream from customer to tier 3 suppliers. In a decentralized supply chain only the retailer knows the customer demand and it will show a higher ararabilityhan the cecentralizedupply chain where the customer demand information is available at each level of supply chain. LiLie FuFungiaving a dedecentralizedupply chain can be prone to Bull whip effect. LiLie FuFungian reduce Bull Whip effect by reducing uncertainty. It can be reduced by sharing demand in all stages of supply chain.
By reducing the variability in the customer demand process. By reducing lead time, it magnifies the variability which causes to demand forecasting. It can also be reduced by engaging in strategic partnership (SiSmithevi et al. , 2003). Bubble In or Turnkey solution Turnkey solutions can be defined as a type of solution which can be easily implemented in to existing business process which was designed to fufulfillertain procedure. In 2000 ‘LiLie FuFungi1043;њ had decided to have an eccommercetrategy for their neen2BIBortal.
LiLie FuFungianted the e commerce business to add value to their existing business. LiLie FuFunginsisted that their eccommercetrategy should be from inside either by using their existing IT department or absorb new people it was known as BuBobbienIncconcept. LiLie FuFungiididn’tant to relay entirely on outsider because of the risk involved. ЂћLiLie FuFungias concerned that if they outsource the IT they will have to depend on them completely and will have to share their business model, strategy and proprietary information.
In future if they terminate the deal the outsourced company can join hand with LiLiend FuFungusompetitors and start a new business. 10 nLnil FuFungiere also concerned with the risk of confidentiality of its customers. Big customers like AbFirebombednd Fitch had also raised their concern with LiLie FuFungias they are also doing business with their rivalries like American eagle. They were concerned about the security of the designs. What will happen if their competitors get the information of their new design? ЂћLiLie FuFungiwanted their new company to be there for the next 100 years -So they were not interested in outsourcing it for a fee. Since the technology is a constantly evolving industry there will be frequent up grades . There will be also difficulty in selecting the right service provider for IT outsourcing. Before selecting any company for out sourcing they should check the credibility of the company because the new venture requires high investment of $ 200 million -If anything goes wrong it will affect the confidence of the investors.
If we select the wrong company for outsourcing it will make a deep impact on the company. Since IT is not their core competence they can invest the money that was raised from the market, $250 million for their core business and outsource the IT business. In a rapid expansion phase the back office operation will also expand. For e. g.GifIfhere are too many projects like LiLieFuFungis going to start an 828 E commerce site and as a part of future venture they are planning to start “electronic stock offer” it is better to outsource it rather than investing in the IT wing .
It will be better to outsource the IT because of complicated procedures like software development, implementation and upgrading, its maintenance -At present LiLie FuFungi had outsourced its intranet and extranet to an IT outsourcing company and it is also working well for the company since some of its customers had connected the extranet of LiLie FuFungi1043;њ to their EPPERIt also improves the financial ratio of the company. As technology is constantly evolving new security issues are raised each day . The cost for disaster recovery and IT department maintenance will increase each year.
So it would be better to outsource IT. As the company grows the number of people working will increase and need for office spaces will also increase. The IT professionals are also highly paid. High employee turnover will cause inconsistency and uncertainty in operation which will affect the overall performance of the company, so it would be better to outsource the IT wing. By outsourcing LiLie FuFungian shorten the time to market new IT services since information tech nooenologys constantly evolving and innovation are required. Outsourcing will be also helpful to LiLie
FuFungisince their growth is by both organic and through acquisition. Integrating new companies IT to existing companies IT is a complex process and time consuming as it requires lot of testing . So it would be better to outsource to an IT company. 11 strongly believe that LiLie FuFungihould outsource its IT because it is not their core competence and they should give the contract to a credible IT company with good track record. Security issues in implementation of e commerce system Internet has played an important role in how we meet people and how we do business.