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Running head: IT MANAGEMENT ISSUES

IT Management Issues
[Name]
[Institutional Affiliation]

IT MANAGEMENT ISSUES

I INTRODUCTION
Accompanying the technological revolution of the 1990s there are many new
opportunities and challenges for the tourism and hospitality industries. Since tourism,
global industry information is its life-blood and technology has become fundamental to
the ability of the industry to operate effectively and competitively. Poon (1993) suggests
that the whole system of information technologies is being rapidly diffused throughout
the tourism industry and no player will escape information technologies impacts.
Travel E-commerce is the application of e-commerce in the tourism industry in this specific field. The
World Tourism Organization, in its publication "E-Business for Tourism" points that Travel Ecommerce is through advanced information technology to improve the tourism in-house and external
connectivity. Namely, the improvement between tourism enterprises, tourism enterprises and the
upstream suppliers, tourism enterprises and tourists between the exchange and trade, tourism
enterprises to improve internal business processes, enhance knowledge-sharing. It has: relying on
the Internet, consumers directly involved, involved in all aspects of business operations (Product
design, marketing, business management MIS, customer management CRM, Resources
Management, ERP, Supply Chain Management SCM), a huge source of information, convenient and
fast means of payment and so on. According to Data Monitor, Inc., a global travel e-commerce for 5
consecutive years increases more than the rate of 350%.
In today's world, there is competition everywhere so in order to survive organizations need to have
good systems to be able to battle in the fierce competition. Enterprise Resource Planning (ERP)
being a strategic tool helps the company to gain competitive edge by incorporating all business
process and optimizing the resource available.
Following are few reasons that inspire a company for a large preliminary investment in implementing
an ERP system:
Reduced Overheads and inventory
Timely response
Market share and Image enhancement
Faster design to manufacturability
Keep up with technological changes

IT MANAGEMENT ISSUES

IT at Austrailian Travel Agencies: The Evolution


During the launching of Travel Agencies in Australia, the company was operating manually, that is,
every job was being done on paper. The application form, the issue of the receipts for payments and
air ticketing were all done manually on specific design paper. The finance department was doing all
its accounting transactions (Receipts & Payments) in ledger books and all records were kept in files.
The IT department in travel agencies was created and they introduced the use of computerization
with the first system called IBM Insight System, which is an accounting package, used for retrieving
information and data processing. they introduce the Sun System, which is System Transys IBM.
There was also Sun Accounting System, which was widely used in the Accounting Department.
All Accounting transactions were done in Application for Payment (AP) and General Ledger (GL).
Australian travel agencies were enjoying mass innovation with the successful computerization stage
and gained largely in monetary terms. The company implemented ERP system in some modules in
2001 and now they wish to enhance their actual system whereby information and resources will be
shared on a common platform.

Benefits of IT at Austrailian Travel Agencies


Usage of IT focused on increasing the productivity of individuals and business areas. The goal was
to achieve clerical and administrative savings by automating manual processes.
Making more effective use of corporate assets to increase profitability.
It was the first time that attention shifted to using IT to produce revenue by gaining strategic
advantage. IT was used to improve outward-looking functions, such as finance and customer
service.
Changing the fundamental structure of the organization as well as creating real-time business
management systems.
IT is used to communicate directly with consumers, leading to new marketing, distribution, and
service strategies.
The company had expanded their computer system so that travel agents get a better means of
making reservations directly through online terminals. Travel agencies enhanced its services by
adding functions of importance to travel agents, such as preparing trip itineraries. The IBM Insight

IT MANAGEMENT ISSUES

System was initially built in 1995 to reduce the costs of making airline seat reservation and to
leverage the reservation, making assets of the airline. The system moved from a manual-based
reservation operation to a computer-based one.
IBM Insight was a win-win proposition, the travel agents liked the direct access and travel agencies
increased the barriers to agents switching to another carrier's reservation system.
Travel agencies has also enhanced its connections to consumers via the Web. This meant that
passengers could not only plan their trip via the Internet, but also buy tickets online and obtain realtime flight information, such as arrival and departure information. Even the name of the movie(s)
being shown on flights could be accessed. Before the Website, some 85 percent of telephone calls
were entered in the Sun System, which were introduced in 1995, after the website, this percentage
dropped significantly.
Importantly, travel agencies targeted its site at the most profitable customer's businesspersons,
traveling people practically all of who had access to a computer. The goal was to give them better
control of their travel planning and rescheduling. Thus, on the site they can see their accumulated
frequent flyer points, make reservations, book electronic tickets (so they do not have to worry about
paper tickets), and so on.
Benefits gained with computerization
Elimination of paper-based processes.
Reduction in duplicate entries and redundant work
User-friendly system with graphical user interface
Provide quick access to information to users
Provide timely and up to date information to management for decision making
Report facility- Generate report as per requirements
Use of spreadsheet for sales Analysis.
Quality of report more efficient and effective.
With E-mail, Fax and internet, resource sharing was easy, fast and efficient thus building a better
relationship.
Improvement of communication processes, Internet facilities availability
Better workflow and increased flexibility.
Reduce repetitive task - workload decreased.
Reduce overtime considerably

IT MANAGEMENT ISSUES

In order to improve planning processes for the training and development of all staff, the Company
has created a directory of competencies, skills and behavioral indicators for the various job
functions. The Competency Directory will be used as a reference record for defining specific skills in
the recruitment, selection, training and staff development activities of the airline. The directory will
also be used to plan for career development of different categories or staff and also to plan for
succession across all levels.
Fundamental/Criticality of IT
Travel agencies demonstrates IT as an essential piece of business strategy as the company
believes that the speed of IT deployment affects when and how companies can carry out their
strategy. Not keeping up in IT can even mean going out of business. The role of the Information
System (IS) organization is thus expanding as better application packages have resulted in less
need for armies of programmers and analysts to develop systems in-house from scratch. The job of
IS has changed to system integration, which means integrating purchased applications; so that they
function together as a system. A case in point is ERP systems, implementing these purchased
systems has involved system integration rather than system development.

Key challenges and risks:-With success full implementation of ERP an organization can reap many benefits. But first we are
going to analyse what are the potential challenges involved in a global implementation of ERP. As
many IS research explanation tells that the "Go live" or roll out of the project does not mean that the
project is successfully implemented. We have to think beyond this part and also take into account
the part of Post implementation risks. A risk can be defined as "the occurrence of an event that has
consequences for, or impacts on a particular project" (Kleim and Ludin, 2000, p. 3).
risk:
Owing to the size and complexity of an ERP system, identification of risk in ERP post-adoption is a
very time-consuming and complicated task. There are four kind or post implementation risk as
defined by (Guo Chao Peng and Miguel Baptista Nunes,2009).
(1) Operational risk (OR). Operational staffs are daily users of ERP systems. OR refer to risks that
may occur from operational staffs.
(2) Analytical risk (AR). Front-line managers use ERP systems to generate plans and forecasts
(e.g. production plan, sales forecast, etc.) to predict and better manage the uncertain future. ARs
refer to risks that may occur as managers use ERPs to carry out analytical tasks.
(3) Organisation-wide risk (OWR). When using and maintaining ERPs in the post-implementation
stage, companies may encounter a set of risk events in relation to various internal (e.g. system

IT MANAGEMENT ISSUES

users and in-house IT experts) and external factors (e.g. system vendor and system consultants).
Such risks may have impacts on the entire company and therefore are referred to as OWRs.
(4) Technical risk (TR). A set of system and technical factors may result in risk events that can
hinder the ERP system from meeting its intended functions and performance requirements. These
risk events are identified as TRs.

To elaborate it further if operational staffs are reluctant to use the new ERP system then that causes
a major risks towards the success factor of the implementation.ERP system are mainly used to
automate the transactional process. As a result the operational staffs are the most frequent user of
the system as a result their involvement and adoption of the project are important in terms of the
success of the project (Scapens and Jazayeri, 2003). This risks can be multiplied by many other
actors like psychological anxiety of the staffs (e.g. unwilling to change and fear of loss of job), initial
failures in system implementation (e.g. insufficient training), system pitfalls (e.g. poor user interface
and system design) and lack of confidence in the system.ERP system is involved with the
transaction of high volume of data and most of the time the data that is been put into the database of
the system should be very accurate. All preliminary data of ERP is inputted by operational staff. It is
observed that "the integrated data flowed so quickly through the system that there was little
opportunity to track down mistakes before they showed up on everybody's screens" (Scapens and
Jazayeri, 2003). To elaborate further if one input is been given wrong by any operational staffs they
impact on the system can so huge that it may disturb the correct functioning of the whole
organization. This happens due to insufficient training given to the staffs, lack of experience,
demotivation or tiredness.
Analytical Risks:--Apart for the operational staffs front line managers are also key users of the ERP
systems (Shang and Seddon, 2002) therefore are crucial factor for ERP success. This can happen
due to insufficient training, reluctance to change .As a result managers cannot take appropriate
decisions regarding foresting and taking analytical decision thus under utilizing the full potential of
ERP system. Manager's needs different kind of data to suit their needs .When the laid system is a
part of a global implementation it becomes even more difficult for the managers to get the actual
data that they want ,as it is sometimes very hard to customize the system according to the need of
the manager. (Sage, 2005).
Organization wide risk: Top managers are neither IT experts nor they use IT system very much.
Therefore they lack the operational expertise and technical knowledge to take important decision
regarding IT implementation. Hence, decision being made by top managers without the involvement
of users and IT managers is a risk that may occur in IT projects (Lientz and Larssen, 2006, p.
116).This risks occurs for global implementation as top management are not very enthusiastic about
the post implementation maintenance and up gradation. Top management support is therefore

IT MANAGEMENT ISSUES

frequently regarded as a crucial factor affecting the success of ERP implementation (Gargeya and
Brady, 2005; Loh and Koh, 2004).

High skilled labours are very important for the system maintenance and enhancement. (Ifinedo and
Nahar, 2009). It is very important for the company to hold their key resources. As ERP professionals
are in high demand it is very important for the organization to hold their key knowledge workers.
However, as widely acknowledged, due to high market demand for this type of professional,
Companies sometimes may find it difficult to retain their highly qualified ERP experts (Sumner,
2000).
Confidential data of company must be stored in secure place carefully, if important and confidential
data is accessed by unauthorised users that my cause potential lead to information leakage and
business crisis. (Yosha, 1995).
Technical risk:-Different modules of ERP systems are to be seamlessly integrated. It becomes
particularly a very challenging thing when the implementation is very huge and there are different
legacy systems required for different country or different sister concerns. Therefore, it is not
uncommon for modern companies to procure suitable software modules from different system
vendors to form their own unique ERP system (Currie, 2003).
System is not properly modified to meet the business system needs. The business environment and
business needs change according to situation and as a result the ERP site should be constantly
modified .The implemented system should be constantly reviewed in post implementation state

There are many techniques and activities involved (Severin V. Grabski, Stewart A. Leech, Bai Lu) in
minimizing the risk of implementation of Enterprise Resource Planning (ERP) system. Such as
reengineering business process, detailed requirement specification, conduct system testing prior to
the system implementation, monitoring the systems performance, formulation of steering committee,
appointment of a project sponsor, senior managers support, development of details implementation
plan, establishment of good communication and coordination environment between the consultant
and project team etc.
To minimize the risk of the ERP project, the application of a risk management plan at different ERP
implementation project stages, selection, implementation, and usage is crucial. A planned and

IT MANAGEMENT ISSUES

systematically adopted risk management procedure throughout the ERP project reduces the
possibility to risks occurring.

Enterprise Risk Management


Enterprise risk management is the latest name for an overall risk management approach to business
risks. (D'Arcy, 2001) ERM provides a framework for risk management, which typically involves
identifying particular events or circumstances relevant to the organization's objectives (risks and
opportunities), assessing them in terms of likelihood and magnitude of impact, determining a
response strategy, and monitoring progress.
Enterprise risk management enables management to effectively deal with uncertainty and
associated risk and opportunity, enhancing the capacity to build value. As per a report by the
Committee of Sponsoring Organizations (2004) ERM encompasses the below elements:
Aligning risk appetite and strategy Management considers the entitys risk appetite in evaluating
strategic alternatives, setting related objectives, and developing mechanisms to manage related
risks.
Enhancing risk response decisions Enterprise risk management provides the rigor to identify and
select among alternative risk responses risk avoidance, reduction, sharing, and acceptance.
Reducing operational surprises and losses Entities gain enhanced capability to identify potential
events and establish responses, reducing surprises and associated costs or losses.
Identifying and managing multiple and cross-enterprise risks Every enterprise faces a myriad of
risks affecting different parts of the organization, and enterprise risk management facilitates effective
response to the interrelated impacts, and integrated responses to multiple risks.
Seizing opportunities By considering a full range of potential events, management is positioned to
identify and proactively realize opportunities.

IT MANAGEMENT ISSUES
References

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