Computer Based Information Systems (CBIS) in the Manufacturing Sector: A Study of Procurement, Implementation, use and Evaluation

Abstract

Technology plays an important role in the growth of the manufacturing sector. Successful infusion of IT in the manufacturing organizations depends upon the manner of use and implementation of information systems. The present study is the maiden attempt to explore the procurement, implementation, use and evaluation of Information Systems (IS) in the manufacturing sector of Punjab. The sample for the study consisted of 70 large and medium scale-manufacturing organizations of Punjab. Primary data was collected using two questionnaires developed separately for the organizations and the users. The study included 840 users across various levels and functional areas of management. Results show that the respondents were using IS for around 29.50 hours per week. It was also found that on an average around 64 percent of total decisions being made by the respondents were based on IS. Further, for these decisions sixty one percent contribution of IS based inputs was observed. Respondents reported maximum use of word processor and internet, 12.43 hours per week and 11.85 hours per week, respectively. Results indicate that use of IS is merely restricted to managing routine office activities and communication. Maximum value of IS was observed for decisional roles followed by interpersonal roles and informational roles. For decision making stages, maximum value of IS was reported for ‘identification of the problem’ followed by ‘searching alternatives’. Users relied heavily on IS while making short term decisions while this reliance decreased for strategic decisions. Results from the study indicate that there was a strong efficiency focus in the use of IS in case of the manufacturing sector of Punjab. There was a significant difference across different levels of management in terms of the weekly use of IS. Top level managers were using IS for around 27 hours per week while middle level managers and lower level managers were using IS for 31 hours and 30 hours, respectively. There was significant difference across different functional areas of management in terms of the weekly use of IS. IT managers were the heaviest users of IS with average weekly usage of around 44.30 hours, followed by managers dealing in the area of finance and accounting with weekly usage of 36.80 hours. Hypothesis regarding the variation in the use of IS across different functional areas was substantially refuted and the hypothesis regarding the variations in the use of IS has been partially refuted. This indicates more variations in the use of IS across the functional areas as compared to the levels of management. In case of functional areas, there is lot of variation in terms of usage rate of IS across the heavy and the light users. This is indicative of difference in the extent of penetration across different pockets in the organization. It was revealed that major reasons for having IS in the manufacturing organizations were elimination of inaccuracies, reducing the cost and integrating various functional areas. Major reason for outsourcing of IS functions in case of manufacturing concerns was to have access to the expertise and the best practices. Security and accuracy were the major factors that affected the selection of IS and vendor. It was found that organizations were very selective in undertaking the feasibility studies before implementing IS. Manufacturing sector in Punjab was found lacking in sound IS management practices. Limited effort of planning for sourcing IS, selective use of feasibility studies and services of external consultants are the major reasons for these relatively poor IS management practices. Methods of evaluation of IS were reported by only two organizations. These included carrying out system audits and dry runs. Using factor analysis, seven factors were extracted for evaluation of IS in the manufacturing sector of Punjab: reliability and speed, accuracy and adequacy, user ability, ease of use, facilitation for work, maintainability and flexibility. These factors have been suggested as the major dimensions for the evaluation of IS in the manufacturing sector of Punjab.