Frame of Reference
In this chapter the reader will be more able to understand the subject and identify the suitable theoretical areas for creating an understanding which are connected to the purpose of the thesis. This review will ground the study of management information system (MIS) implementation issues in the field of information systems (IS). In essence, the review relates to MIS implementation and consists of three main sections which are focused in the research and writing that provide the main idea of this study.
This review begins with a presentation of a general background of literature which aims to give the reader an understanding of the subject. This part relates to MIS which focuses on management of information systems. Moreover, the discussion of ERP and “best of breed” solutions, two existing approaches to information systems for enterprise software systems will be described. In addition, this section includes a discussion of information systems (IS) related to information technology (IT). The second part of this chapter provides literature associated with MIS implementaion processes and its surrounding challenges along with its success factors. The third part of this section discusses organisational impacts on business/organisation processes including effects and consequences when MIS has been implemented. Finally, the summary of the research framework is illustratated as the model which will be used as a guide for analysis (see Figure 2.1
Management Information Systems (MIS)
The literature about management information systems (MIS) has been developed since the 1960s. An evolution of MIS can be divided into three periods: data processing, management information systems, and strategic information systems (Somogyi & Galliers, 1987). The first era, “data processing”, is mainly focused on improving the efficiency of business through automation of basic information processes with not too much control over planning or resources. the second era, “management information systems”, was concerned about the enhancement of managerial effectiveness by satisfying widespread information requirements. Managers of each organisation came to realise the capability of information technology resources and started to acquire their own systems to meet the requirements. The third era, “strategic information systems”, focused on improving organisational competitiveness advantages by affecting the overall organisational business strategies. This period is an approach to use strategic management in MIS such as various and diverse information technologies, widespread user involvement, and significant planning and implementation strategies (Beaumaster, 1999).
A variety of the definitions of MIS have been indicated, for example Ives, Hamilton and Davis (1980: p. 910) defined MIS as a “computer-based organisational information system which provides information support for management activities and functions” which is similar to Ein-Dor and Segev (1978: p. 1065) who described it thus: “MIS is a system for collecting, sorting, retrieving and processing information which is used, or desired, by one of more manager, in the performance of their duties”. Furthermore, Davies (2009) claimed that MIS is one types of information system that support s the tactical decision-making of managers, and also monitors the current state of the organisation. Moreover, Kroenke (2007: p. 5) mentioned that MIS has three key elements including: development and use, information systems, and business goals and objectives. MIS can be named as an organisational information system, a computer-based information system, or an information system (IS; Ives et al.,1980).
Various characteristics of MIS are considered as important factors for the efficiency of MIS which is to report with fixed and standard information; to have reports developed and implemented using information system personnel, including systems analysts and computer programmers; to require formal requests from user; and to produce scheduled and demanded reports. In addition, external data are used by the MIS while it is not captured by the organisation (Asemi, Safari & Zavareh, 2011). Furthermore, Das (2012) discussed the same area and claimed that an efficient MIS should contain the following characteristics which include: system capability, modularity, simple, transparent, instinctive, online capability; integration; and support from well established and committed suppliers. On the other hand, the roles of MIS have been described as a useful tool for making business decisions by gathering data and information from MIS systems (Asemi et al., 2011). This concept is relatively stated by Das (2012) that MIS is mainly concerned with processing data into information for appropriate decision-making.
The MIS literature, based primarily on private sector organisations, prescribes performance evaluation on the basis of the economic efficiency of hardware and software (Hamilton & Chervany, 1981). Public organisations also have strong incentives to consider economic costs in decision making, but most face other, equally important competing criteria, such as procedural equity (cited in Bretschneider, 1990).
In addition, Beaumaster (2002) claimed that MIS concentrate on the automation of many business activities that aim to provide better methods of planning, reporting, and operation control. Therefore MIS, which is often referred as “information system (IS)”, has attempted to provide methods to manage problems and situations around all perspectives of the management of information (Theiruf, 1994). Moreover, MIS is a facilitator for an organisation and also supports management activities. MIS implementation, however, is high priced with costly assets, thus this implementation project requires detailed planning of its design, implementation and operation processes
Information System (IS) and Information Technology (IT)
Information systems (IS) and information technologies (IT) are a vital component of successful businesses and organisations (O’Brien, 2004). The definition of both IS and IT are closely related to each other; however, they are different in their functions. IT relates to the products, methods, inventions, and standards that are used for the purpose of producing information. It can also be defined as “the preparation, collection, transport, retrieval, storage, access, presentation, and transformation of information in all its forms (voice, graphic, text, video, and image). Information movement can take place between humans, humans and machines, and/or between machines. Information management ensures the proper selection, deployment, administration, operation, maintenance, and evolution of the IT assets consistent with organizational goals and objectives” (Boar, 1993, p.3). IT refers to the products, methods, inventions, and standards that are used for the purpose of producing information (Kroenke, 2007). IS “consists of the information technology infrastructure, application systems, and personnel who employ information technology to deliver information and communications services for transaction processing/operations and administration/management of an organisation” (Baskerville, Stage, & DeGross, 2000). Therefore IS is a set of components which interact to produce information, which include hardware, software, data, procedures, and people, whereas these components can be found in every information system (Kroenke, 2007). According to Figure 2.2, the main elements of IS consist of hardware, software, data, procedures, and people. Hardware refers to computers, storage disks, keybords, and communication devices while software is relevant to word-processing programs. Data or information is included texts, words, sentences, and paragraphs in reports. Furthermore, procedures refer to the methods for using the program and involved activities. The last element is people. The important role of the five components is that IS is not only computers, programs, and communication devices, but it also focuses on the assembly of hardware, software, data, procedures, and people; in other words, information system means a system of communication between people (Kroenke, 2007; Davies, 2009). Moreover, Gurbaxani and Whang (1991) claimed that there are many roles of information systems in an organisation, for example to increase an operation’s efficiency, to process business transactions, to provide decision support, to monitor and evaluate employees’ performance, and to maintain documentation and communication channels.
Information technology (IT; i.e. hardware and sofware) is one significant component in an information system (IS). Nowadays, IT is an important factor to evolve in strategic planning of an organisation. In addition, IT is the asset or capability base on which an enterprise constructs its business information system (Boar, 1993). On the other hand, the main roles of IT have been analysed and presented by Chan (2000). He claimed that the key roles of IT include an initiator, a facilitator, and an enabler. The importance of an initiator in IT is to initiate a new operation, or initiate the change of IT. In addition, a facilitator of IT is a tool which helps to manage work which is easier to work. Finally, an enabler of IT offers the ability or the necessary support to achieve a goal.
Organisations have radically changed their IT strategies and one of the strategies that they choose is to purchase standard package software instead of developing IT systems in-house (Holland & Light, 1999). The existing application software has been categorised by Kroenke (2007) as the following:
- Horizontal-market application software refers to a software that serves capabilities common across all organisations and is used in a wide variety of businesses such as Microsoft Office, Adobe Acrobat;
- Vertical-market application software provides for the specific industry requirement, for instance the programs that are used by parts of warehouses to track inventory, purchase and sales;
- One-of-a-kind application software is developed in order to support a unique need and fit only the organisation.
In addtion, Kroenke (2007) also explained how an organisation acquires application software or sources of them. The first approach is to purchase the suit software, called off-the-shelf-software which provides the customer an exact cost. However, some applications in the suit do not fit the organisational requirements. The second software sources can be obtained by buying off-the-shelf with alterations software. This software is more expensive than the previous software; in spite of that, an altered suit will be more fit than pure off-the-shelf-software. The last software is called tailor-made application software or custom-developed software. This software is obtained by hiring a vendor to make a custom suit in order to get the applications that exactly fits with their requirements. The existing types and sources of application software were summarised in Figure 2.3 by Kroenke (2007).
Two ultimate approaches currently exist for enterprise software (ES) systems including ERP systems and “best of breed” (BoB) solutions (Mabert, Soni & Venkataramanan, 2003). Therefore, an organisation should carefully make the decision to implement IT solutions and evaluate to ensure that it meets the requirements (Loh & Koh, 2004). For instance, ERP systems are the most preferable method whereas the businesses replace the legacy system (Holland & Light, 1999). However, ERP system implementation is one of the most challenging projects and is not easy to achieve (Gargeya & Brady, 2005). On the other hand, BoB is flexible and organisations are able to choose from a collection of software applications which are appropriated with the organisation’s requirements (Light et al., 2001). Nevertheless, Sledgianowski, Tafti, and Kierstead, (2008) claimed that BoB is required to develop an infrastructure (i.e. hardware, software, expertise, etc.) which would be very expensive. These discussion of ES system approaches as well as implementation processes of IT solutions will be discussed in following sections
ERP and BoB Solutions
Many companies started to replace their legacy system with ERP packages in order to solve integration problems during the 1990s (Hyvönen, 2003). These systems are comprehensive packaged software solutions which aim for total integration of all business processes and functions. Gargeya and Brady (2005) stated that ERP systems had emerged as the core of successful information management and the enterprise backbone of the organisation. The main benefit of these systems is to provide a common integrated software platform for businesss processes (Parr & Shanks, 2000). An ERP system might be used as a basic platform in many companies, but they also still use some stand alone components, or ERP modules from diffferent vendors (Themistocleous et al., 2001 ). On the other hand, some companies without an ERP system still integrate their systems using conventional best of breed (BoB) or stand alone system components of standard package and/or custom software in order to reach flexibility and ability to meet specification organisation and industry requirements (Hyvönen, 2003). In contrast, the increasing needs to integrate intra-organisational information systems is established. Sunsequently, many organisations are now seeking to integrate inter-organisational information systems and ERP systems provide internal integration. As a result, they are seeking to use ERP systems to establish integration with other supply chain stakeholders (MacKinnon, Grant & Cray, 2008).
Taking into account the definition of ERP systems and BoB solutions, ERP systems are single vendor software packages which provide best-practice business process functionality centred around a single database. Many companies attempt to modify ERP systems to match their existing processes. However, they have often caused a great deal of trouble, for instance delaying implementation, increasing staff requirements and hampering the upgradeability of the system. On the other hand, best of breed (BoB) solutions are combinations of different software packages which provide more limited and focused functionality, such as one system for finance, one for operations, one for human resource management, and so forth. Therefore many organisations try to mix and match what they consider to be the best collection of software packages to match their organisational needs. These packages are then integrated using some type of middleware. Various advantages of BoB implementation are considered to be less disruptive to an organisation, require less process reengineering, and allow for greater flexibility. However, due to the fact that the packages come from different venders, there are extensive compatibility and integration issues (MacKinnon et al., 2008). In short, the strengths of the BoB approach can be seen as being centred on the ability of organisations to benefit from the most appropriate and the best in class software function available (Light et al., 2001)
Unfortunately, many organisations have faced a challenge with the systems integration which is not only an obstacle of the system, but also the supply chain partners consist of independent systems so that, in some cases, they cannot communicate with each other. In addition, there is a complexity of existing information systems, which in many cases have fixed and rigid structures for messages, interfaces and databases (Themistocleous, Irani, & Love, 2002). Therefore ERP systems have become the resource to support the business processes and increase efficiency and effectiveness of collabolative relationships with actors in the supply chain. However, ERP systems are not appropriate for every organisation. Many organisations which haven’t chosen ERP systems still have some problems with isolated systems. In order to solve these problems, enterprise application integration (EAI) is conducted. EAI or application integration (AI) is adopted to refer to the integration area and is defined as the “unrestricted sharing of information between two or more enterprise applications. A set of technologies that allow the movement and exchange of informatiom between different applications and business processes within and between organisations” (Linthicum, 1999, p. 354).
To conclude, both approaches are beneficial for an organisation which implement an information system. However, there are many factors that the strategic level or top management should take into account in order to choose the proper information system for implementation within their organisation. These MIS implementation aspects including implementation process, implementation challenges, and key issues for success implementation will be described in the following part
1.3 Research Questions
1.7 Disposition of the Thesis
2 Frame of Reference
2.1 Management Information System (MIS)
2.2 Information System (IS) and Information Technology (IT)
2.3 MIS Implementation Aspects
2.4 Organisational Impacts of an Implementation .
2.5 Summary of the Research Framework
3.1 Research Approach and Design
3.2 Choice of Method
3.3 Case Study
3.4 Data Collection Process
3.5 Data Analysis
3.6 The Trustworthiness of the Research
4 Empirical Finding
4.1 The Case of Fenix System
4.2 Fenix (E) System Implementation Challenges
4.3 Fenix (E) System Implementation Success Key Issues
4.4 Organisational Impacts
5.2 MIS Implementation Challenges
5.3 MIS Implementation Success Key Issues
5.4 Organisational Impacts
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