ICT Based HRIS and MIS. The Case of RSE Plc

1 ICT Based HRIS and MIS. The Case of RSE plc Table of Contents Executive Summary.........................................................................................................................3 ICT Based HRIS and MIS. The Case of RSE plc............................................................................4 Introduction..................................................................................................................................4 Porter’s Five Forces on RSE plc (the Company’s Environment)....................................................4 Threat of new entrants.................................................................................................................4 Threat of substitute products.......................................................................................................4 Customer bargaining power.........................................................................................................5 Supplier bargaining power...........................................................................................................5 Rivalry from competing firms.....................................................................................................5 The Marketing Information System (MIS)......................................................................................6 A SWOT analysis of RSE plc......................................................................................................7 Strengths..................................................................................................................................7 Weaknesses..............................................................................................................................7 Opportunities...........................................................................................................................7 Threats.....................................................................................................................................8 RSE Inc Human Resource Department and ICT.........................................................................9 Human Resource Information Systems (HRIS)..............................................................................9 Automating................................................................................................................................10 Exploration of new methods of work structuring processes......................................................10 Time attendance.........................................................................................................................11 Employee training......................................................................................................................11 Conclusion and Recommendation.................................................................................................12 List of References..........................................................................................................................14

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Executive Summary This paper addresses the areas of human resource information Systems (HRIS) and Marketing Information Systems (MIS). It reveals that RSE Inc is in a good position to leverage good performance with the introduction of ICT. This is to create an efficient computerised MIS and its utilisation as the best way out to creating this competitiveness. The HRIS in turn becomes a tool that acts to save cost and optimise the utilisation of the human resources. The HR functions of staffing, employee development, coordination within the firm and compensation could work reasonably well with an effective HRIS. It brings fairness which in turn becomes a source of motivation of staff due to its objectivity.

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3 The areas of paperless office, time attendance, exploration of new work structures and automating are also addressed. In effect, the HR department could rely on a well updated HRIS for its entire management of employees and create a competitive edge for the company. A SWOT analysis is done against the forces in a market as described by Porter to find out if RSE Inc can incorporate ICT in its business.

This paper finally recommends that RSE plc effect the changes with a strong assurance of capturing new markets, saving both direct and overhead costs in both marketing and HR and ensuring better service to customers.

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ICT Based HRIS and MIS. The Case of RSE plc Introduction For any organisation that is keen to keep up with the current competitive trends, it is imperative that they embrace techniques and technology that allows coping with the increasing competition. As technology becomes sophisticated, businesses that have strategically exploited it are making breakthrough in a less tedious way than those that use traditional methods (Agnilar 1987). The Human Resources and Marketing functions are strategic for the success of any firm.

As such, the HRIS and MIS become such important tools especially when they embrace ICT for various reasons that this paper will focus on.

Porter’s Five Forces on RSE plc (the Company’s Environment) According to Porter, any firm thriving in an industry is externally faced by five forces.

These forces include the threat of new entrants, threat of substitute products, supplier bargaining power, customer bargaining power and eventually the rivalry of competing firms in the industry.

Threat of new entrants New entrants in the reconditioned machine business are fairly high because there are no barriers to entry (Hill & Jones 2009). This means that RSE plc has to be competitive enough to win over any competitor who may enter the business with strength. On the auction segment, there is not much threat of new entrants since this is a legally regulated area and entry is limited to certain qualifications. Due to this RSE only needs to market itself better to be known.

Threat of substitute products Substitute products are likely to affect RSE Inc. These products are mainly new business machines. When customers are financially capable, they would prefer buying new machines as

5 they will give them better service, less breakdowns and longer duration. As such, RSE Inc faces a threat of not only other reconditioned machine dealers but also from manufacturers of new ones (Mehrtens & Mills 2001).

Customer bargaining power Customer bargaining strength is relatively high due to presence of alternatives. The customer bargaining power for auction services is also high since most players in the field play on standardised fees based on percentage of sales. Customers can change their service providers at no extra cost. This makes it necessary to remain competitive.

Supplier bargaining power Supplier bargaining power is low because most of the machines they obtain are being disposed. Due to this, RSE Inc has a chance of making a high profit margin if the negotiation skills are good.

Rivalry from competing firms Competing firms in the industry pose a great threat to RSE Inc. Any firm that strategically that strategically positions itself with good ICT is likely to win a larger market share. ICT and internet present the best marketing tool especially for such customers as companies (Sutherland & Haussler 2007).

The use of ICT brings a fundamental transformation throughout the organisation. The marketing function is an area which benefits enormously from ICT. ICT is a major source of competitive edge if well used by the marketing department (Mehrtens & Mills 2001).

One way that marketing benefits is the acquisition of market information. It uses it to get closer to the marketing environment and also create knowledge or acquire it regarding different types of

6 agents that form it. As such, the firm gains access to lots of up-to-date and relevant information in a very easy, cheap and fast way (Han et al. 1998).

The presence of this information however does not promise creation of knowledge. This is because knowledge is an end-result of a larger process that involves acquiring, decoding and integrating of the information. Information must be taken through a learning process to convert it into knowledge (Hudson 2005). ICT plays a crucial role of facilitating and encouraging the transmission and also diffusion of knowledge within the entire firm aiding in decision making.

One key part of these decisions that relates to the marketing function is that they influence how actions to be taken are designed and developed. It also aids in provision of ready access to wide array of global information on consumers that gives a competitive edge to the firm. ICT is very important in providing strategic capability of targeting specific groups precisely. This is alongside enabling mass customisation through adapting communications to the market segments (Argyres 1999).

The Marketing Information System (MIS) This is a management information system meant to assist in making decisions in marketing (Kotler 1988). In this system, marketing data is gathered, stored and then analysed to be sent to managers for their informational needs. In most firms, this system is a computerised one and already analysed so that there is not much to analyse later at the decision making stage (Hudson 2005). The system comprises of sub systems like the internal reporting system, marketing research systems, marketing intelligence systems and marketing bodies. They all arrange relevant data in a coherent manner that is usable to the firm. The MIS derives its data from sales, customer profiles, stocks and orders. Some other sources of such information are customer service reports and marketing intelligence reports. The end result is a system with a

7 broad perspective of organised data stored for use at any moment required. It greatly plays a role in coordinating marketing plans, speeding decisions and enabling a comprehensive cost-benefit analysis. Considering the three key roles of a manager (interpersonal, decisional and informational), it can be concluded that a marketing information system contributes to all these.

A SWOT analysis of RSE plc Strengths The fact that the company has a presence in the four countries is strength for the firm. In its bid to increase sales and market share, their focus will not be on entry strategies to win customers but that of widening the customer base. They will therefore become committed to channelling resources towards achievement of a common goal (Lawler, Levenson, & Boudreau 2004).

Weaknesses One major weakness of RSE plc is that they have been doing things manually. The digitisation of the departments may mean further training of staff. This means en extra cost of training and time used for the training not to mention that the efficient use of these resources cannot be made immediately by the staff. It cannot however be ignored since sharing of information in the firm is especially important for managerial decisions.

Opportunities It is a good opportunity to exploit if the RSE plc takes advantage of the current customer dissatisfaction in order to improve a firm’s responsiveness towards its customers. Swift response to customer needs is one aspect that gives a firm competitive advantage (Green, Tull & Albaum 1993). Managers also get an easier way of sharing information and solutions as handled in the different subsidiaries. All personnel can share crucial knowledge of business value and

8 experience as long as it is available on an office computer. This is a total contrast of paper records which can only be accessed by one person at time and whose retrieval is a cumbersome process that demotivates its exploitation (Conrad 1969). In summary, introduction of ICT in the firm can help RSE Inc realise the following benefits (Smith & Brynjolfsson 2001): 

ICT becomes part of the sales drivers.

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Market research becomes a simple process that can take place from a desk.

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Consumer management process becomes efficient giving a competitive advantage.

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Data becomes available for exchange between the firm, customers and suppliers.

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Sales can be closed with clients through the internet.

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Development of new products by the company becomes a less expensive affair.

There is lots of innovation and collaboration of processes in an effort to remain competitive and expand market share.

Threats The fact that RSE plc is in a very competitive industry and lags behind in technology is a threat to its expansion. Several competing firm in the industry are already using sophisticated digital technology for their business, giving them a strong competitive edge. Internet and ecommerce enables firms to access market capability within the region due to access to new customers and new markets. Transmission of order information becomes easy. Firms that adequately exploit ICT are already entering a stage of e-business. Sophisticated uses are in place such as business process reengineering while B2C and B2B e-commerce have formed the corporate strategy (Hudson 2005).

9 RSE Inc Human Resource Department and ICT ICT applications influence, in a major way, the technical and strategic effectiveness of HRM. This is especially the case where perceived quality of the content and structure of the applications of e-HRM have measurable positive impacts on the effectiveness of human resource management (Beatty 2001). At an overview, e-HRM decreases costs, improves the service level of the entire HR and gives HR a chance to contribute to strategic goals of the firm. In practical terms, RSE Inc will realise processes that are linked to making the production cheaper and have a better response to the market changes are believed to have improved efficiency (Conrad 1969).

Such processes include outsourcing and re-engineering. Just-in-time and benchmarking are also considered in the same category. These processes cannot be efficient without ICT being incorporated (Brown 2002).

Human Resource Information Systems (HRIS) Carroll and Night (1973) in their question; “how can every man be sure that his merit will be discovered and that he will be promoted to the highest notch he can fill?” say that under scientific management the output of each man is recorded separately and relative scores show up constantly. High scores are accompanied by high wages. High wages attract the attention of the management and the upward progress for the capable man is rapid. A human resource information system is a combination of personnel inventories, human resource forecasts and other personnel databases (Ulrich 1997). It provides comprehensive, computerized information on the human resources within a given organization.

The databases for HRIS are derived from the bio data, job details such as job type, job location, reporting relationship, job grade, and job title. Features of the employment contract such as leave and working hours should also appear. Salary details such as job grade and basic

10 salary, earnings, review dates are also important. In the HRIS, the performance appraisal data, and employee transactional data e.g. special expertise or skills, special awards, training, absences, discipline and medical history should feature as they especially simplify the promotion process when there is a tie in the results of appraisal. When automated, the use of the HRIS becomes a very easy task (Green, Tull & Albaum 1993).

A HRIS is thus useful in promotion. Due to the significant role HRIS plays in organizations, it is therefore imperative that data security and personal privacy of individual employees be properly maintained (Sutherland & Haussler 2007). In specific areas, ICT has the following contributions to the effectiveness of HRM: Automating When most tasks are automated, the firm will need less staff to accomplish the work that is ordinarily done by more people. There is also optimum utilisation of employees and the delivery of products and services becomes efficient (Ball 2001). More work can be done in less time hence saving on the costly labour hours that the firm experiences. Administrative costs are reduced alongside the cost staff. In addition, there is reduced human error when work is automated. Furthermore, there is detailed, more accurate, and timely information that regards finances and human resources and this enables better planning of resources (Ulrich 1997).

Exploration of new methods of work structuring processes When better work structures are found, work becomes less tedious easing the effort put on each task (Martinsons 1994). The workload subsequently reduces and the HR process becomes standardised. Most importantly, ICT enables creation of virtual organisations through teleworking or telecommuting. This in turn reduces congestion in the office, enables people to

11 work at their own pace, saves cost and increases the probability of each individual doing more work (Carroll & Night 1973). On the side of the employees, this increases work-life balance.

Complex processes like total quality management or even business process re-engineering can be achieved at a less costly rate and with less effort.

Time attendance Most organisations have time attendance policies and these can prove very effective with the use of ICT. Some organisations pay on piece rate or hourly basis and they need to closely monitor time management of staff. Such organisations need to install ICT related gadgets that require less effort or costs to manage. As such, there will be accurate compensation and interpretation for awards to the deserving members of staff. This helps to reduce errors absenteeism, errors in payroll and costs of payroll that come with overtime. The end result is increased productivity and less cost of production. It even becomes easier to predict costs and empower staff through motivation (Dickerson & Green 2004).

One major advantage of ICT in HRM comes with flexibility of work arrangements. This is because it helps motivate staff and increase productivity. ICT is central in diffusing information especially in tall organisations. This helps to solve the challenge of information channelling that comes with bureaucracy in tall organisations. In case an organisation wants to outsource, ICT increases efficiency and allows the firm to leverage resources and also talent for it to gain the benefits of higher skills without really having to hire them directly (Ball 2001).

Employee training Most firms require renewing of their human capital to keep it competent and motivated to work. In modern times, formal training is an expensive affair and firms need to improvise ways

12 in which the skills are imparted at a cheaper cost (Dickerson & Green 2004). Some firms sponsor their employees for distance courses while they use the firm’s resources to learn. If the knowledge is within the organisation, it becomes even easier to exploit it through internal training and it can be well aided by ICT. Virtual corporate universities are on the rise with corporates trying to customize training to suit their needs.

Conclusion and Recommendation RSE plc is in a good position to exploit ICT in its marketing and human resource departments. As part of a marketing tool, a website will be a good basic way to start off. In addition RSE plc should adopt a computerised marketing information system to enable it compete adequately and increase business in the four countries it is already operating in and also reach out for overseas business. Since the products and services it deals with are marketable online, RSE plc will benefit greatly from being online. Furthermore, it will save costs of marketing. The firm could save more than half of the cost it incurs paying staff that do things manually. Some of the benefits that it is bound to realise are that ICT will become part of the sales drivers, Market research becomes a simple process that can take place from a desk, consumer management process becomes efficient giving a competitive advantage and that Data will become available for exchange between the firm, customers and suppliers. In addition, Sales can be closed with clients through the internet and it will also be possible to develop new products at a lesser cost.

The HRIS will help the firm improve its staffing, compensation and employee development functions. It is strongly recommended that the firm implements these changes as soon as it can to gain a competitive advantage and improve on its margins (Dickerson & Green 2004). A SWOT analysis of RSE Inc versus its environment as analysed using Porter’s five

13 forces shows that RSE Inc is well advised to incorporate ICT and internet as a way of increasing sales and profits. The firm can therefore adopt: 

A comprehensive HRIS modular software) that combines different specialised HRIS to integrate the different HR issues they wanted sorted.

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A modular software for the MIS

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Outsource training of key staff on use of the software instead of outsourcing the whole function.

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