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Information system is made up of all the elements that collaborate together to process input data and produce information. Thus business information systems are made up of several subsystems with individual goals, all of which add to the organization’s main objective (Oz 2008, p. 13). This paper examines the quality management of business information systems and particular systems that include Customer Relationship Management and Enterprise Resource Planning (ERP) so as to understand their operations and importance to an organization.
When developing an end-user business system, the quality consideration in of crucial importance. Quality is providing the customer what he requires at any time at a reasonable price and manageable cost over time. It also entails providing something better whenever the customer comes back next time. Thus quality is the degree of congruence between what is expected and what is actually achieved (Seaver 2003, p. 5). Since it is customer focused, the quality management in the information systems ensure that absolute customer satisfaction is achieved.
The quality of an information system should not be compromised so as to achieve the best quality of output products or services. This is an important aspect of management is important because purchasing decisions of buyers depend on the quality as one of the decision factor. Thus for an organization to achieve competitive advantage over its competitors, it must be able to manage quality of its business systems right from development (Seaver 2003, p. 5).
A quality management system should be put in place so as to ensure any subsystem development or purchase should meet the required quality. The required quality should be able to meet the customer’s requirements as well as the organization’s requirements. The quality requirements can be achieved if objective evidence is obtained from business information systems in form of information data. These data supports business activities from the supplier through to the final consumer (Oakland & Marosszeky 2006, p. 228).
According to Oakland & Marosszeky (2006, p. 228), the customer requires for confidence that the organization should be able to deliver the desired product or service that is reliable. The consistency of an organization to provide the much needed goods or services in the right quality will depend on the effectiveness of quality management in selection of a new business information system.
On the other hand the organization requires that the business information system be able to regulate external and internal operations and utilize efficiently available resources at an optimal cost. These available resources include materials, human capital, technology as well as information (Oakland & Marosszeky 2006, p. 228). Thus the quality management aspect in selection of the said new business information system is crucial in ensuring that the organization meets its operation requirements.
The organization need to develop quality management manual which indicates the organization’s quality policy, the definition of quality management, description of business processes interaction in a quality management as well as proper documentation of quality requirement (Oakland & Marosszeky 2006, p. 233). With this manual, the company will have enough guidance on selection or development of new business information system.
Before the company agrees to any systems supply specification it must ensure that the processes and equipments are capable of meeting the requirements. In addition, there is need to ensure that the operators have the necessary training and skills to use the system with properly documented operating procedures which are not simply passed verbally. Moreover, the system should be having the necessary control procedures such as tests, checks as well as regular inspection. There should be compatibility of the system to the available plant and equipment instrumentation (Oakland & Marosszeky 2006, p. 233).
At this point we discuss the options available for the bank to either keep the systems development unit in-house with implementation of Total Quality Management (TQM) or outsource the entire activities of the unit.
A system development unit within the company means that the bank is able to set up an entire unit which produces the required systems for its own use. This is where the company invests in the expensive equipment and the human resource developers whose work is to develop new systems in line with the banks requirements. The biggest benefit of the in-house development is that the produced system is customized in particular for the banks needs and as a result is able to meet almost all the requirements of a system.
With the implementation of TQM, the bank is able to ensure that the quality of the produced systems by the unit meets the required quality requirements of the bank. The concept of TQM ensures that there is constant quality improvement in every system development. This is because a TQM is a process that brings together several business processes to ensure that there is constant improvement in the quality output. The investment in TQM gives an assurance to the bank of the effectiveness of its in-house developed business information systems. The TQM ensures completeness, accuracy, preciseness, timeliness and security of the in-house system development (Singh 2007, p. 220 & 221).
However, there is a very high cost associated with the in-house systems development unit. To maintain a whole department has a huge cost borne by the bank alone since it cannot be shared to other users. The extreme costs and time consumption of information systems in-house development pushes companies to seek alternative sources that meet their requirements at minimal costs. Moreover, in-house systems development is may not be core competency of bank (Handfield & Nichols 2002, p. 315).
The outsourcing of the information systems of the bank is where it purchases packaged software in the market or contract for its development. The company will not be responsible for the management of the development but only concerned that the finished system meets its requirements. This will enable the bank to obtain a business information system which is cost efficient and meets fairly standard requirements (Kirikova & Grundspenkis 2002, p. 9).
In a typical outsourcing, the bank quantifies the systems work requirements and agrees with the service providers of charges. The providers will then be tasked with sourcing for all its resources in development which include equipment, human capital and other investments. The bank will only pay a blanket sum of the entire package. This is advantageous because it enables the bank to concentrate in its financial services leaving the systems to external experts (Tayntor 2007, p. 360).
However, there are disadvantages associated with the outsourcing of the entire unit of system development. This includes the reduced flexibility of the system. This is because the bank will no longer be managing the systems and as such cannot make any adjustments as they wish. For instance, they cannot transfer people supporting one system to another if business requires a shift. Moreover, the costs actually may not be lower in outsourcing. This is because some contracts have turned out to be highly priced compared to their original intention. Furthermore, the outsourced systems development may not meet customer satisfaction. When the service provided is short of the negotiated contract or customer expectation it will lead to the ineffectiveness of the bank information services (Tayntor 2007, p. 365).