MANAGEMENT INFORMATION SYSTEM

Do you agree that the application of the information technology especially building up MIS or more will create the competitive advantage for your company?. - The management level exports

INDIVIDUAL ASSIGNMENT MANAGEMENT INFORMATION SYSTEM

TOPIC:

Question 1 Please show the information application at your workplace; analyze the

advantages and disadvantages upon applying the information technology to build up MIS

at your workplace

Question 2 Do you agree that the application of the information technology (especially

building up MIS or more) will create the competitive advantage for your company? Why? Please indicate the example to prove the cases under your experience

Question3 Supposing that you have the competence to start MIS building project at

your company, please indicate the necessary steps, the natural sources to be prepared and the related parties, which you have to collect in the project?

Question 4 Please indicate the function, duty of CIO (Chief Information Officer) in an

enterprise?

Question5 What do you know about ERP (Enterprise Resource Planning) Please draft a

ERP establishment plan for your company as a manager to prepare the information strategy for the company?

ANSWERS

1 Question 1 The status of the information application at the workplace:

KVT company has been established since 2007 with business: manage, operate the gas processing plant, LPG storages, Condensate at Ba Ria-Vung Tau province In the years of

2007 – 2009, KVT does not have any information management system (MIS) but mainly

the application of the information technology to serve the information as the individual level; Most of them is to send/receive/ look for the information by file server, email server and handle the documents with Microsoft Office Due to not having MIS , especially the maintenance activities, the maintenance data is stored loosely in each excel file in the personal desktop of the engineers in charge and managers

Since 2010, KVT Companyhas established MIS for managing the maintenance activities to the Gas plant, Gas Terminal MIS is on duty of the maintenance, rectification under the name of Maximo – one solution of the maintenance management of IBM

Maximo is the complex of 06 occupational groups:

 Work Management

o Periodical maintenance: Carrying out the maintenance with the fixed

frequency

o Unexpected maintenance: Carrying out maintenance upon the request for remedy

 Materials Management

o Managing material code

o Managing material export/ import

o Managing material stocking

o Looking up material information

 Asset Management

o Managing equipment history

o Looking up equipment information

 Procurement Management: Not applied

 Customer & Service Management: Not applied

 Contract Management: Not applied

Three management levels using Maximo system are indicated as the figure below

After applying Maximo software, KVT has got the following advantages:

- Everybody can look up fast the latest data from the system (the inventory information, the information of the maintenance history, information of the maintenance performance) to handle the jobs punctually and accurately Before, it

is only to know by telephone or e-mail exchange; If it is the information to be summarized, it will be backward due to the time spending so much for summary/collection

- The management level exports immediately the reports related to the management execution maintenance to ensure the plan approved by the level

- When there has not been a system before, the maintenance data is stored in each year and cannot do the statistic works to analyze the optimizing of the cost for maintenance work and back-up materials to punctually remedy the incidents if any However, with Maximo system available, KVT could do the annual statistic work to optimize maintenance

- When there has not been Maximo system before, the production department of the company has the trouble when transferring materials for efficient usage Now, with Maximo, the departments have exploited the mutual inventory information

to use the inventory materials efficiently

- Each staff uses Maximo with the screen for private data access and output of the information is automatically exported Thus, it will be to standardize the work demands and the dossiers are formed

- The treating time for each work of maintenance is reduced due to the work reminder system upon coming to that person and saving the history of the work treatment of each staff

- The weekly, monthly final accounts and payment of the materials for each periodical and expected work have reduced the dossiers due to the usage of the forms of the reports, the system observation etc

Disadvantages when starting MIS for maintenance management:

- The big cost for the time and amounts to invest the system, hardware, network, software solution, person’s training and change of the operation procedure of the company

- KVT company is troublesome with the legal regulations of Vietnam and of the mother company of the documents, seals, direct signatures Thus, it can not start module of procurement, Customer and Services, Contract causing many legal problems of the functions available of the system

- Risk of the network security because it becomes the disadvantages for Hacker to exploit, steal the confidential information

- The cost to protect the network security and maintain the function available of the system can increase more than the brought efficiency Thus, as for these 02 aspects, the requirement is too high

- Increasing further the work quantity for the staffs in the trial running period, transferring maintenance management system according to the traditional pattern and the new one Hence, it is to require the efforts of the staffs and related departments to shorten this phase

In short, the company has currently set up the infrastructure of the information technology, the internal network, devices of information technology etc in the relatively complete manner to exchange the personal information, send the data among the departments in the company and outside MIS system of the company only constructs one part of the work management of maintenance to serve the staffs’ commanding activities at the production departments, the management department and helping the

Board of Directors to make punctual and efficient decision of mantenance In addition, due to the state company bound by the current legal regulation, it is impossible to exploit all the functions of the maintenance management system, especially related to the procurement, PO signature, contract etc As for the other operations like the finance, accounting, human resource etc, only the separate software operates independently in the limit of the functional department and of serving the commanding affairs for the related staffs in the room and has not helped the management level to get the punctual, accurate information at each time of proposing the decision and the strategic planning

2 Question2: Do you agree that the application of the information technology (particularly building up MIS or more) will create the competitive advantage for the company? Why? Please indicate the examples to prove the cases under your experience

2a I agree with the concept that MIS will create the competitive advantage for the company because of the following reasons:

- MIS will help to collect exactly, fully the information for all operation means of the enterprise and distribute the information properly in accordance with the requirement of each objective and then the management levels will evaluate, adjust or make punctual decision during the operation process and consecutively help the high level leaders to construct/ adjust the tactics, strategies according to each detailed phase or according to each objective of the customers

Each employee is closely attached with MIS as a practice Then, the management can understand and adjust the chains of “issues” in the rotating chain of the information treatment to head for the target, the development strategy as proposed

- By the information technology systems, the enterprises can quickly supply information of the products, access a new market, looking for the new customers

or take care of the customers available better with the low cost At the same time,

it can reject the unnecessary costs and can choose the products or the services

with the high returns Then, it is to optimize the production, save the cost and optimize the management, execution to increase the competition

Therefore, MIS is the important foundation for the new management pattern contributing basically to increasing the business production efficiency of the enterprise improving all-sided and sustainable capacity of the competition of the enterprise in the current globalization and integration

2b Examples of applying successfully MIS in the enterprise:

Taking Vinamilk company as an example

1 Before starting ERP:

- The input and output goods management procedure is totally manual This has resulted to some consequences like the so much inventories while the output products are consumed too late or the use of machines and workers has not met the capacity etc All of these have caused the damages during the production process of Vinamilk, directly affecting the company profit

- In the manual accounts, payment of Vinamilk, it is still to get trouble with the errors, which the staffs encounter With the manual final accounts, the managers

of Vinamilk are not easy when checking the final accounts and complying with the procedures

- From the reasons indicated above, Vinamilkhas remedied the above efficiently by applying the planning system of ERP

2 Starting ERP

a Preparing the infrastructure and manpower:

IT Department of Vinamilk has been established with 26 staffs for many groups: Computer supporting group, network group, Server group-database, programming group and Solomon supporting group

Vinamilk has cooperated with IBM to set up and start the infrastructure of IT as per the request including the server system under IBM Blade Center System X (running intel processor); The archiving system of SAN of IBM DS8100, capacity of 10TB, 1 ton weight

controlled by02 servers of IBM system p- Vinamilkis the first customer of IBM applying this system (only this system has the cost up to 2.5 million of USD); The storage system and application management software

b Commencement:

ERP application at Vinamilk has, as a matter of fact, spent 03 main stages.On 15 March

2005, ERP system applies the solution of Oracle E Business Suite of Oracle started by Pythisincludingthe main parts of the finance-accounting, procurement management, shopping management –Sale management, production management and analyzing the operation results (Business Intelligence - BI)

The technology transfer takes place on the whole Vinamilkwith 13 points including the head office in HCM city, enterprise of stores and branches, plants on the whole country The division of the process will help the company to approach the system more easily Together with the relevant parties to solve the additional issues, it will help the next steps to expand further the scope, applying further the new technologies and mitigating the risks, smoothly and more successfully

Vinamilkis currently applying the three solutions consecutively international ERP of Oracle, SAP, and Microsoft The said system has been chosen by Vinamilk for each detailed requirement Thus, it can integrate and master 03 solutions of international ERP and Vinamilkhas proposed the best solutions to settle the business problem

c Results:

After 08 operation months of ERP for the whole company, Vinamilk has made primary conclusion of the application efficiency

The system helps the company to carry out closely against the risk the accounting works; with the clear level and right classification, the finance- accounting work is more convenient compared before

The inventory, store management, distribution, enterprise execution, relationship with the customers and production have been managed better by the company in reducing the risk remarkably; Between the sales and distribution, there is more smooth, reflex functions; The observation functions are performed according to the true time

The level of IT staff at Vinamilk has been improved IT infrastructure has been consolidated, synchronized, standardized and strengthened

It is disclosed by company that since 2002 until now, Vinamilk has invested IT with total cost of 4 million USD (including ERP) and confirms that thanks to the deep investment, Vinamilk has enough energy to access the big solutions

As for the organization structure of the company, in addition to the knowledge improvement of the staffs, the system has met the user’s demand well The management becomes concentrated, thorough, punctual

Right when starting successfully Microsoft Dynamics SL, Vinamilk has concurrently proposed ERP and the sales solution by PDA for the distributors to strengthen the management level

There have been 33 distributors (NPP) of Vinamilk in the whole country starting ERP-PDA The project was completed to the end of the year 2007; This amount will increase 78 NPP Vinamilkhas started Microsoft Dynamics SL and Palm Z22 for 10 NPP in Hanoi and 23 NPP in HCM city Other sixteen NPP in Mekong Delta River are in the complete phase for installing the software As scheduled, at the end of this year, Vinamilk will complete the software for 78 NPP and to July 2008, it will be 187 NPP The network of NPP of Vinamilkwill continue to expand

3 Evaluation:

a Difficulties :

Although Pythisis an enterprise specializing in supplying the software solutions in Vietnam, the capacity to meet Pythis for the whole process of ERP of Vinamilkis insufficient It is possible to see that as the top supplier, Pythis’s human resource, technology and capacity are limited The level of Pythis can be the strategic partner of Oracle in Vietnam However, in order to develop completely the whole capacity of Oracle

at one big enterprise like Vinamilk, it is impossible

Thus, Vinamilk buys the software solution of Oracle and SAP to complete more the technology capacity at the high level It is possible that Vinamilk wants to buy the solution of Oracle for the core management capacity and CRM (Customer Relationship

Management) alone of SAP to strengthen the customer’s management capacity at the highest level

At a way yes level, the functions of ERP of Oracle at CRM have not been developed It is partly due to the qualification, insufficient manpower (it is mainly caused by Pythis) This has enabled the cost for ERP at Vinamilkto increase once more time At the same tie, the synchronizing capacity for the management process of the solutions is remarkably reduced

The data input from the customers and suppliers is by the manual inputting system from the occupational staffs receiving the documents of the partners’ professional staffs Thus, there will be delay and inaccuracy

The cost to invest ERP and put it into the complete operation is relatively big not only about the software qualification, hardware but also the manpower capacity The hardware system needs to be invested so bigly to run all modules The software system has to be updated usually for the latest versions applied for the best management

When the hardware system and software can be procured, another issue is mentioned as

an important and key one That is the qualification, manpower available to use that system The investment for the manpower is not one or two days but the long process Vinamilk wants to use ERPsystem, it does not only make investment for the infrastructure but also attaches importance to the qualified workforce to start the system

This workforce does not master the general condition of Vinamilk, but have enough ability to run the system So, Vinamilk has to train the qualified workforce to use the system and also let its staffs practice on the true system to accumulate the experience for reaching the highest efficiency upon using the system

Development of CRM and distribution for the vendors are the modules different from the modules in the core central as bought by Vinamilk The occupation has been reached far

to control the market, the sale staff’s qualification, the competitor’s competition etc This

is too strange to the staffs and consultants to start ERP usually

In addition, the special feature of Vinamilkis applying consecutively three solutions international ERP of Oracle, SAP, and Microsoft Thus, the know-how to combine the three solutions efficiently is a challenge

b Reason for the success:

As for the strong commitment and support of the management board Vinamilk–right orientation and to the end –Vinamilk has assigned the professional workforce to join actively the professional IT workforce project of Vinamilk working basically and methodically

In addition, the project is supported by the production management system ofVinamilk,

of the supplier of Oracle and the independent consultant of KPMG Co.,ltd

The main experience shared by Pythis is that the relevant parties (Pythis, Vinamilk, Oracle and even KPMG) together define clearly the target but does not go into the details

of the non-important issues so much, concurrently showing the person to handle the additional issues

Question 3 Supposing that you have the competency to start MIS establishment project at your company, please indicate the necessary steps to be done, the source to

be prepared and the related parties which you will collect in MIS establishment project?

3a Necessary steps :

According to me, there are three major steps:

- Setting up the professional group including the representative of the company departments (in which IT department in charge of the company is the key one) and the team leader shall be a Vice Director to make jointly consultancy

- Surveying, evaluating the status of the information status in the company including hardware and software to define the existence and inadequateness

- Determining MIS system scope in accordance with the demand, target and the ability of the company It is to make reference to MIS models of the company operating at the same applied business branch

- Evaluating and choosing suitable MIS solution of the supplier; understanding the weakness and strength of the supplier to choose the solution in accordance with