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MIS comes of age as corporate decentralization tool

Fingertips stained carbon-paper blue, they lugged ponderous price books, reams of reports and memos and notebooks and aspirin. They filled out hand-written, six-part carbon customer orders, shipped them off to a central processing office, waited and hoped they made no mistake that could cause further delay.
No more.
Today, that sales force hits the street with a notebook computer and a smile: While orders once took six to 10 days to process, reps now do the job in 30 minutes.
The switch at Kodak is a snapshot of how technology is transforming the way firms manage information. Management information systems–once the domain of crusty corporate MIS departments–are putting data directly in the hands of employees to boost productivity and profits.
Yet cutting-edge software alone cannot do the trick, experts warn. An MIS transformation must come hand in hand with fundamental changes in corporate culture. And companies that resist these changes will eat the dust of streamlined, info-savvy rivals.
Once the purview of number-crunchers, these days MIS still is being redefined, incorporating its traditional role with the radically new charge of making data available to a broader range of workers. Many MIS departments are groping through this transitional phase, not yet certain of their place in the corporate design.
“MIS was originally a way to deal with accounting kinds of data,” says Timothy Babbitt, a lecturer in information systems at Rochester Institute of Technology’s College of Business. “But finance isn’t the only way to be strategic.”
Electronic mail plays a non-fiscal role in MIS, for example, as does “groupware”–software designed to help people work together on common projects across a computer network. User-friendly data bases are another piece of the fabric.
Like all fundamental change, the MIS transformation is slow. Conservative firms still burble along on technology better housed in the Smithsonian, while others are fluent in leading-edge systems, Babbitt notes. And because business schools presumably prepare graduates for reality, teachers are forced to address both approaches to management information.
“It’s like we’re teaching Roman and Esperanto–that’s the paradox we’re in right now,” Babbitt says.
Many companies, especially smaller firms, also maintain a melange of old and new. Alliance Automation Systems still operates a fairly old MIS system using an IBM mid-range computer. The system runs traditional functions like accounting, purchasing and inventory control, says William Johnson, MIS administrator at Alliance.
That system runs parallel to a newly installed network of personal computers. The PC network was set up at the urging of Alliance engineers, who primarily use its computer-aided design applications, Johnson says.
But engineers swapping files on the network is one thing–re-engineering the firm is another story.
“From what I’ve read, to successfully implement a true client/server system the company would have to go through what’s called business process re-engineering,” Johnson says. “That means rethinking and redefining how your business actually operates. And that is a lot of work.
“For smaller companies like (Alliance), it’s not clear that that’s practical.”
However, some experts believe re-engineering might be easier at smaller firms such as Alliance, which employs some 150 workers.
Small and mid-size companies often have flatter hierarchies already and are formed around functional units, eliminating the need for fundamental cultural change, says Abraham Seidmann, associate professor of information systems and operations management at the University of Rochester’s William E. Simon Graduate School of Business Administration.
Such firms are better equipped to exploit new information systems, he adds. Generic software packages on the market now are relatively inexpensive and are tailor-made for smaller companies.
Yet larger firms are embracing new information systems, too. Kodak, for example, is automating MIS throughout the company, says spokesman David Beigie.
Over the past two years, all 1,000 sales reps and managers in its Office Imaging division have been hooked into an information system–dubbed the Horizon Project–designed specifically for that unit, says Robert Valeri, project manager. The system includes electronic pricing capability, sales cycle tracking and an automated proposal generator.
Last spring, the sales force at Kodak’s Health Sciences division began using Notes, a groupware program by Lotus Development Corp. On their laptop computers, the 208 account managers record sales calls and information they gather about customers and competitors. Upper-level managers pass along internal data on customer purchases and the like.
Previously, this information either was not accessible or was passed along via the slower mechanisms of paper and phone, says Ronald Norris, a specialist who manages the system.
Kodak tracks the effectiveness of these new approaches, Beigie says. But because the firm views its use of information technology as a competitive edge, it keeps that data close to the chest.
Xerox Corp. also mines the technology of information management, coupled with its extensive corporate restructuring.
“You cannot talk about employee empowerment unless those people have the tools to do their jobs, and the tools in many cases means the information,” says spokesman Jeffrey Simek.
In the past, information on pricing and product availability was accessible only through corporate headquarters. Now, the company puts that information directly into the hands of its sales force, via computers linked to a networked system.
“Now we don’t need as many reports and paperwork that added very little customer value to our business process,” Simek notes.
As in many companies, MIS at Xerox is in a transitional mode. For years, Xerox has been tied to a proprietary information management system; now the firm is converting to a standard, networked system of PCs. The change will enable Xerox to communicate more efficiently with suppliers and customers, most of whom already use networked PCs, Simek says.
The biggest MIS transition for Xerox was last year’s decision to outsource its MIS department to Electronic Data Systems Corp. EDS maintains Xerox’s worldwide data centers–mainframe systems that store information ranging from payroll services to customer support. EDS also services the firm’s voice and data communications infrastructure, desktop computer systems and business support systems, such as those that track telemarketing calls and customer billing.
Experts differ on the benefits of outsourcing MIS.
Information management should be one of the organization’s core competencies, RIT’s Babbitt insists. Yet a growing number of companies farm out that portion of their business.
“Why don’t they just outsource the whole corporation?” Babbitt says.
Xerox’s Simek takes issue with that stance.
“Our core competencies are scanning, faxing, printing and copying,” Simek says. “Our core competency is the content. What we’ve outsourced is the conduit.”
“EDS’ core competency is information management–that’s all they do, and they do it well. They are faster to pick up on new trends, they have more expertise in that area. That allows us to focus more on what we do for our customers.”
UR’s Seidmann backs up that position.
A recent field study of several dozen businesses found that a major driver of outsourcing decisions was cost-effectiveness. Rather than focusing on strategic concerns, companies outsourced information systems when it was cheaper than developing them in-house.
That motivation is a reasonable one, Seidmann maintains. A company can retain control by specifying the type of system it needs and making sure the system evolves with any corporate changes that might occur. But the actual maintenance and programming can be better performed by outside agents.
“The key resource is the data–it has value only as it accumulates,” he says.
Data security and retrieval therefore are crucial elements in the success of a business, he adds. And managing the increasingly complex systems needed to do that is an expertise most end-users do not have.
Seidmann sees a growing, diverse role for MIS departments, whether outsourced or internal.
“The role of a centralized MIS department is to make sure the information flows smoothly,” Seidmann says.

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