It is important to take into account the fact that we are currently living in the information society, the society where the creation, diffusion, distribution, integration and manipulation and the end use of information is an important political, economic, and cultural activity. The core purpose of the information society is gaining the competitive advantage on the international level, while applying the informational technology (IT) creatively and in a productive way.
In the scope of this essay, the core direction for the investigation would be the impact of the informational systems on the business process design.
The current trends of the business world and economic development imply the higher requirements to the quality of human relations, rather than to the role of employees in the manufacturing process. The main reason for such a trend is complete mechanization of the majority of manufacturing processes.
Nowadays, it is a very hard time for the economic development; the actuality of the entrepreneurship development in the light of informational systems` improvement is a very urgent question for the key specialists of the economic and managerial fields all over the world. Every day thousands of analysts collect economic and statistical data to chase the latest changes and to make conclusions and propositions on the further directions of informational systems` development and improvement.
The experience shows that small and middle businesses are the most flexible sphere in the manufacturing, technological and managerial aspects. Such flexibility helps the businesses to react to all the market changes and to get adapted to them with minimal loses. That is why the technological support is very important for small and medium business development not only in less developed countries, but also in the developed ones.
In different countries the attitude towards the current situation in informational systems` development is alike and the problem solving is the common responsibility. While taking into account the fact that the globalization process implies integration of the enterprises and the manufacturing facilities, located in different parts of the world, it is obvious that the integration of the informational systems should be also carried out in an effective and innovative way. The competently developed principle of work is the key success factor in a current situation. The mutual assistance from different parts of an integrated system and mutual readiness to help are the time-required state positions to keep the stability in the entrepreneurship activity and to remain competitive in business.
Background of Informational Technologies
In order to outline the main characteristic of the IT, introduced to the company’s activity, it is better to start with its brief definition and then outline the general characteristics of the issue. Informational technologies (IT) include wide range of sciences and fields of human activity, which are related to the technologies of data collecting and treatment; moreover, it concerns new data creation and development with the help of the computer technologies.
In the process of transferring to the form of information society, which is the form of the social organisation, implying the development, distribution and diffusion of the information as the important issue for the political, economic, and cultural activity and development, it is important to apply the latest technological achievements of the information treatment and exchange.
The core purpose of the information society is getting the competitive advantage in the scope of international business, while applying the IT in a productive and creative manner.
Nowadays, the IT is widely associated with the computer technologies, because it uses the computer for data processing, saving, transformation, protection, exchanging and obtaining (Oxford English Dictionary, 1989).
In the scope of this research, the brief analysis of the IT is made. In order to improve the company’s activity it is offered to consider scope, cost, time and quality management, while using the triple constraint system: scope, cost and time goal.
It is possible to outline the following potential benefits of the IT system development and practical implementation to the activity of the enterprises and companies:
- It reduces the costs
- It creates the competitive advantage for the company;
- It increases the flexibility of the company’ activity;
- It increases the company’s value (Marketing through technology official web site, 2009)
The scopes of IT implementation involve the information, concerning all the activities, carried out by a particular company, human resource activities, the number of manufactured units, time, required to produce the particular goods, available quantity, planning for the nearest future, accounting data, the client base, the suppliers base etc.
Each department of a company is provided with an access to the limited quantity of information; the human resource centre has an access to the employees` base, but is not provided with information about the current orders. Every employee is provided with his/her own log-in and password to his/her personal page, which outlines current activities and orders to be accomplished. It is very convenient because it allows the management of the company to monitor the activities of the subordinates and not to explain every time what one is supposed to do in some period of time. Everyone is provided with clear instructions via electronic sources.
The costs of such IT system implementation are relatively high, especially in case of the customer-developed system. But they would be compensated in the nearest future with the quality and quantity of accomplished orders; the costs for human sources would be reduced and the efficiency of the company’s management would also give additional revenues to its owners.
In the majority of cases, the system development life cycle looks like the following: the IT system planning, its analysis, design, practical implementation and maintenance (Elliott, 2004).
The object-oriented programming allows obtaining interactions of data fields and methods, applied for its treatment in order to collect and structure the data, needed for the achievement of the specified goal (Sutherland, 1963)
The Unified Modeling Language, applied for the IT system development is considered to be the universally applied modeling language in the field of software development. UML is widely applied in the business processes modeling, system projecting, and organizational structures representation (Fowler, 1995).
In the majority of cases, IT system carries out information analysis and design, while applying the tools of the Structured Systems Analysis and Design Method (SSADM).
While completing the IT system for the particular company, all wishes and propositions of the company employees should be taken into consideration. And the participatory design should be applied. That allows creating the best and suitable informational system for a particular company and in addition, in such case, the majority of employees will find its interface attractive and easy to operate (Eckerson, 2006).
Role of knowledge management and wisdom management in informational technologies and in managing the information system
The importance of knowledge management and wisdom management can be measured by the effectiveness of the company’s activity. It is possible to say that these two directions of the modern managerial science allow directing the human thought to those activities which would bring the highest results.
It is very important to organise the knowledge management process inside the company and to investigate all strong and weak points of each employee in order to provide one with those sorts of activities, which would be accomplished in the shortest period of time with the minimum amount of required resources and with the maximum quality.
If the basic rules of knowledge and wisdom management are applied into the practice by the company’s top management (it is possible only in case if they are the experts of managing the company) that would allow reducing costs on the personnel training, and in addition, it would improve the discipline and the corporative climate inside the company.
In order to make comparative analysis of knowledge management and wisdom management, it is important to give brief definitions of these notions separately.
Knowledge management is a relatively new notion in nowadays managerial science, which is supported by the constant scientific and technical revolution and applying of new technologies in all fields of human activities.
Nowadays it is possible to consider high technologies and service development as the most attractive and profitable field for investment activity, because of its quick payback, reduced dependence on the raw materials supply, and opportunity of occupying new cells in the market.
The topicality of knowledge management is caused by the post industrial society trends of development. The main trends are dictated by the developed countries and it is very important to occupy a cell in the high tech market and to get rid of manufacturing material intensive and risky (from the ecological point of view) products.
In other words, KM may be considered as the one managing the intellectual capital. It has got the following tasks: achievement of the main company’s goals, at the expense of intellectual capital and its effective applying; increasing the decision productivity; creating positive atmosphere in the company for innovations; applying the bench-marketing in all fields of human activity; personnel training and motivation (Spender, 2007).
The notion of wisdom management is relatively new, even in comparison to the KM conception. There are many definitions and approaches towards wisdom management clarifying, but the most common one is that manager acts with wisdom if one takes into consideration moral aspects of the society, its life values and if one has got deep knowledge in the area, he/she operates in. Clear thinking and clear understanding of the current situation in organisation, being able to act courageously and at the same time not take exceed risks, are the next manifestations of the wise manager (Sridevi, 2009).
In order to clarify the notion of wisdom management, it is important to clarify the conceptions of wisdom and to outline the evolution of wisdom management: in the past, today, and in the future.
Wisdom may be considered as deep understanding of human nature, events and situations and ability to obtain the highest results with minimal time, efforts and resources required (Sridevi, 2009). In other words it is possible to say that wisdom is an ability to apply the knowledge in the most effective way (which is a very important issue for the informational system of the organisation establishment, development and improvement).
It is a complicated task for the scholars to identify the exact time when the notion of wisdom management appeared in the managerial science, but currently this conception is very urgent in the competitive business world. All actions, carried out by the company’s top management should be based on wisdom and should take into account the fact that the key success factor of the economic activity is offering the desired product in the required place, and when it is required. In other words it is necessary to be always in time.
Another characteristic of economic success is lowest possible cost of all actions and sources. If the available human mind is applied in a proper manner that would allow achievement of the highest results in all fields of human activity.
One more aspect of wisdom management is that in comparison with knowledge management it is more individual than group decision making. All the experience, pros and cons of the issue are collected and analysed by one manager, who is responsible for the decision.
On one hand, in the sphere of IT technologies wisdom management is a very important tool of goal achievement, because informational technologies are based on the constant development of human thought, while applying the existent experience in the related area. In this case wisdom with its ability to apply human mind in the most effective manner, in order to achieve the highest results, will allow the fastest development of the IT both within the company and on a global scale of human thought development.
On the other hand, the IT development may also have positive impact on the wisdom management development, because it exempts the manager from the need of collecting and processing some information (these elementary actions can be executed by the electronic device) and the manager, in turn, would have to make the crucial decisions. In such case the knowledge, available in the human brain, would be applied in the most effective manner.
In other words, it is possible to say that IT and wisdom management are deeply interrelated and interdependent notions, because IT is developed as the derivative from the wisdom management and at the same time it supports further development of wisdom management.
Information System
In the scope of this section it is important to pay additional attention to the information system (IS) notion and to define it. This term is applied for the interactions between people, technology processing, data treatment etc. It is very important to stress that IS is applied not only for the communication technologies or information treatment, but it is also used for the business and management processes outlining (Kroenke, 2008).
It is possible to consider the IS, as the combination of human activities and informational technologies, is available for data processing and decision making process improvement (O’Brien, 2003)
The IS notion is deeply interrelated with computer systems and business processes. In the first case the IS includes the information technology component, so the computer system may be considered as the additional tool of the IS. While discussing the notion in the light of business processes, the IS is a part of its correct functioning: it improves all the processes and helps to carry out the control over them (Alter, 2005).
Generally, the IS is a part of the work system, the system, which integrates human work with work of automatic devices and machines in order to produce and distribute some specific products. The main role of the IS in the whole work system is treatment of the information, concerning supply chain, manufacturing process, distribution and maintenance of the product. The general requirements to the IS are the following: to provide easy access to information, keep it secure and in the correct order (Beynon, 2009).
Currently the importance of IT implementation into the company`s activity is widely discussed and practically confirmed. It is the key success factor for an organization in all its departments. It is useful in the human resource centre, procurement department, sales department, accounting department, marketing department, foreign economic activity department and other functional units of each enterprise, company or firm. The informational technologies allow collecting and saving information, according to the given algorithms with the help of personal computer. It allows saving the large-scale size information on the machine-readable medium. And more than that, it allows an exchange of particular information within all parts of our planet during the limited time period.
That is why introduction of informational systems via informational technologies into the company’s activity, improves its quality of work. More than that it is required by the modern business world, where time is money and the competition is won by those companies, which may offer their services or products in proper time and in proper manner, meaning that they are convenient and easy to access by a customer or business partner. The internal aspect of IT implementation into the business activity allows effective controlling over the company activity, easy correction of the deviations and the results monitoring.
The Business Intelligence
The Business Intelligence (BI) is a relatively new term, which for the first time was introduced by the Hans Peter Luhn in 1958. The author considered the BI in the following way: “it is the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal” (Luhn, 1958). This notion has changed since that time due to the computer technologies progress and in the 1980-s it involved the computer–assisted models, which were to help in decision making process by executing some calculations according to the criterions like “if…” and “than”; the elementary decision making models were offered to the manager. Such programs as DSS, OLAP, Data Warehouse and Executive Information Systems are the first developed programs in the business intelligence area.
Later, the BI system was interpreted as all possible methods, concepts, tools and possibilities of the business process improving with the help of the fact based support systems (Power, 2007). Nowadays the BI is the computer-based and operated system of the problem definition, business information collecting, treatment and decision making assistance. As an example, the sales revenue calculation concerning the previous and current times, according to the available on the web-sources information, and also experts’ business forecasts, general trends in the area etc. The main functions of the BI system are the following: online analytical processing – collecting the data, needed for decision making, carrying out the economic analysis of this information, benchmarking- borrowing the experience of other organisations, which operate in the same field (competitors), business performance management – selecting several possible variants for the business, and finally – making the predictive analysis of these decisions (Dresner, 2007).
Conclusion
To conclude, it is important to stress on the importance of introduction of the newest technological achievements in IS and BI areas into the business practice. There are several reasons for this: first of all – saving time and money for the informational search; automatisation of routine decision making process: “if…. then…” automatic system; possibility of coordination and improvement of all processes; top-management is provided with an access to information about each department (current information about current processes).
Finally, the computer-assisted software simplifies the majority of the processes, which take place in a particular company. It allows easy control over all actions of employees, all needed additional sources and finally, that, in turn, provides a particular company with an opportunity to reduce time, costs and efforts, directed to the main management processes: planning, organisation, motivation and control.