Firms that gather, assimilate, and evaluate external and internal information most effectively are gaining competitive advantages over other firms. Having an effective management information system (MIS) may be the most important factor in differentiating successful from unsuccessful firms. The process of strategic management is facilitated immensely in firms that have an effective information system. Information collection, retrieval, and storage can be used to create competitive advantages in ways such as cross-selling to customers, monitoring suppliers, keeping managers and employees informed, coordinating activities among divisions, and managing funds. Like inventory and human resources, information is now recognized as a valuable organizational asset that can be controlled and managed. Firms strive to implement strategies using the best information.
A good information system can allow a firm to reduce costs. For example, online orders from salespersons to production facilities can shorten materials ordering time and reduce inventory costs. Direct communications between suppliers, manufacturers, marketers, and customers can link together elements of the value chain as though they were one organization. Improved quality and service often result from an improved information system.
Firms are increasingly concerned about computer hackers and are taking specific measures to secure and safeguard corporate communications, files, orders, and business. Thousands of companies today are plagued by computer hackers, who may include disgruntled employees, competitors, sociopaths, thieves, spies, and hired agents. Computer vulnerability is a huge, strategic, expensive headache. The first big hacking of 2015 happened at the health insurer Anthem Inc., exposing 80 million customers’ personal information. Two recent hackings occurred at Home Depot, exposing 56 million customers’ information, and a month later, at J.P. Morgan Chase, exposing 76 million customers’ information. Millions of companies are vulnerable to hackers.
In many firms, information technology is allowing employees to work at home or anywhere, anytime. The mobile concept of work allows employees to work the traditional 9-to-5 workday across any of the 24 time zones around the globe. Desktop videoconferencing allows employees to “beam in” whenever needed. Any manager or employee who travels a lot away from the office is a good candidate for working at home. Salespersons and consultants are good examples, but any person whose job largely involves talking to others or handling information could operate at home with the proper MIS.12
1. Mobile Tracking of Employees
Mobile devices and inexpensive monitoring software now enable companies to know where employees are, eavesdrop on their phone calls, and do other things such as know whether or not a driver is wearing his/her seatbelt. More than 40 percent of businesses that send employees out on service calls today track the location and movement of those employees by their company-owned/provided hand-held devices or vehicles.13 Some employees complain that various monitoring practices are an invasion of privacy, but businesses contend that such measures improve workplace safety and productivity, while also reducing theft and protecting against discrimination.
No federal laws currently prevent businesses from using GPS devices to monitor employees, nor does federal law require businesses to disclose to employees whether they are using such techniques. In fact, in the United States, only two states currently require businesses to tell employees if their electronic communications—including e-mails, instant messages, texts, photos, and websites visited—are being monitored; the two states are Delaware and Connecticut. MIS tracking technology today has permeated many industries and is utilized by thousands of businesses ranging from landscaping firms to restaurants. And, in many of the businesses, employees do not realize that their actions, location, and habits are being monitored whenever they are on the job.
2. Mobile Apps for Customers
Companies are increasingly developing mobile apps for customers and using resultant data to devise improved strategies for attracting customers. For example, hotels are rapidly developing apps to help speed up check-in for travelers, including letting customers go straight to their rooms by using their smartphone to unlock doors. In November 2014, Starwood Hotels and Resorts became the first hotel to let guests unlock doors with their phones. Starwood Hotels requires the phone to actually touch a pad on the outside of the door to open it—to make sure if there is a knock on the door late at night and a guest goes to the peephole to see who is there, the guest’s phone in his or her pocket will not accidently unlock the door. Some hotel chains, such as Marriott, are holding off on using smartphones as keys until potential security issues can be resolved.
Hilton Worldwide is the second hotel chain, behind Starwood, to announce plans for mobile room keys, which it plans to roll out at the end of 2015 at some U.S. properties. In all 4,000 Hilton properties worldwide, guests can also use maps on the Hilton app to select a specific room. However, guests who like personal interaction at check-in, such as to ask about pool hours or whatever, can still opt for a more leisurely check-in. Hotels eventually would like all travelers to be comfortable using mobile apps on their iPad, smartphone, or smartwatch to request a wakeup call, purchase suite upgrades, book spa treatments, request room service, and open their room door.
Source: David Fred, David Forest (2016), Strategic Management: A Competitive Advantage Approach, Concepts and Cases, Pearson (16th Edition).