What Should Business Managers Know About Information Systems?
In my work I interact with many business-centric and technology-centric individuals. In most cases I am working with teams that include subject matter experts (SME), project managers, business analysts, architects, developers, IT infrastructure administrators, quality assurance personnel and users. Each of these roles is important, but not sufficient, to delivering a successful project. Beyond these roles, successful projects also rely on a host of best practices including strong business sponsorship, effective scoping, and good communication. However, one area that can influence the effectiveness of a systems-based solution is the business management’s understanding of information systems (IS).
Many business leaders have a great depth of knowledge in terms of the operation of their business. Using Michael Porter’s Value Chain to model a business, I have found that these leaders are thoroughly versed in the details of their primary activities. However, when providing leadership for projects involving IS, they need more. A solid business-centric understanding of IS as a key supporting activity for their business is essential. The question is, “what constitutes a business-centric understanding of IS?“ Here are my thoughts on that topic.
Managers need to understand: 1) the types of information systems that are available; 2) the prerequisites for effectively leveraging information systems; 3) the necessary steps to install and operate information systems; and 4) the appropriate type of user for the various information systems. At the core of each of these is the fact that a manager must assure that the information systems being leveraged or planned are supported by an information systems strategy that is tied to the business strategy.
Information systems exist to assist in the operation of a wide range of business functions. These systems include Customer Relationship Management (CRM), Enterprise Resource Management (ERP), Reporting and Visualization (Decision Support System-DSS, Business Analytics, Online Analytical Processing), Automated Decision Support (ADS), and Identity and Access Management (IAM) to name a few. These systems support functions that every company deals with in some way. A manager must understand the purpose of these systems and how they would benefit the overall organization.
Leveraging an information system has less to do with installing and integrating it than with the existing infrastructure. Before a system can benefit the organization there must be supporting data and processes that will allow the system to function accurately and effectively. Getting the infrastructure in order such that there are accurate master files representing customers, orders, inventory, etc. is difficult. Creating processes that will properly leverage information systems can also be challenging. People need to be trained, old processes need to be retired, and new processes need to be designed and proved out.
Rolling out an information system involves gaining leadership support for the new system. A vetting process will likely ensue and knowing how to gather requirements, measure systems against those options and arrive at a decision are necessary skills for a manager. Without an effective IS project management process, an attempt to procure and install a new system will suffer delays, unexpected expenditures and in many cases ultimately fail. Managers need to understand that it is not the technology that will save the day; it is the people and processes that are involved in leveraging the technology that determine its level of success.
Finally, managers must understand the correct use for a given information systems. Systems exist that serve different levels of management: 1) Operational; 2) Mid-level; and 3) Executive.
Operational management needs detailed information and in some cases can have decisions automated. The information at this level deals with largely tactical situations. Data concerning reorder points, machine maintenance windows, and employee task assignments are required to operate the business on a day-by-day basis. Since many decisions are largely data driven with little external influence, they are good candidates for automation using ADS systems.
Mid-tier management deals with both tactical and strategic decisions. Their view of information must encompass a broader set of measures, but have access to details. Some decision at this level can be automated but in other cases involve less structured data and need to be handled by a person. Rapid access to the aggregated data, such as produced using a DSS, is vital to managers at this level.
Executive management is concerned with the organization’s strategy and its performance to Key Performance Indicators (KPI). These key measures allow for a rapid understanding of the company’s standing. Executive Information Systems allow for such views to be created.
In all cases, it is the availability and quality of the underlying data that will allow for any meaningful automation or reporting to be created. In cases where data from disparate systems are required the company may need to look at approaches such as data warehousing or Enterprise Application Integration (EAI) tools that allow for the exchange of information between heterogeneous systems.
With an understanding of the business aspects of IS, the business’ leadership will be in a position to effectively champion and manage technology-related projects. IS is not something to be left to the technology team. It is a key component of successful companies. Being a business manager who is well versed in IS and who bridges between business and technology will assure that the company’s strategy is properly communicated and mirrored in its information technology implementations.