Computerisation in this article consists of computers, softwares and automation.
Software is a computer program with set of instructions through which computers (including machines with computer chips) are operated. Software makes computing devices work. It makes the automation possible.
Softwares are loaded on computer and computing devices. The size of computing device is reducing drastically over the years from size of a room to the smart phone. Chip size is also reducing drastically and we are moving towards nano-chips i.e. chip of miniscule size.
The need of Computerisation
Competitiveness of an organisation is dependent not only on its products but on the speed of providing error-free products.
There used to be a time when pigeons used to carry messages from one location to another and various operations of the organisation entirely being managed manually. Manual books of accounts still exist for recording financial transactions.
Times are changing
- Information needs are increasing → everybody wants information faster;
- Organisation sizes are increasing → addition of large number of locations / countries → increase in diversity of cultures → everything needs to be integrated into common system of working;
- Customers are becoming impatient → They want their products fast delivered and that too with best quality → Organisations are on the constant move to come out with the new and the best products / solutions.
Limitations of human mind
- Human mind is most versatile and powerful;
- Any type of routine trouble → can’t be equated with robots following repeated instructions tirelessly;
Human mind’s creation in the form of computers, softwares & technologies are one of the best.
Advantages of computerisation
- Routine processes can be carried out by machines tirelessly 24 X 7;
- Least maintenance once the software gets stabilised;
- Automates the task with least manual intervention;
- Mechanical / electrical machines can also be managed / controlled from computers & softwares;
- Integrates the entire team including the team on move. With communications channels like mobile & internet technologies getting developed, information can be accessed from anywhere in the world from any device including mobile;
- Avoids duplication of effort and validates the work of entire team;
- Building-up of efficiency in the organisation;
- Detection of errors and non-quality products efficiently & faster
- Fast rolling out of new products
Allows the best quality and cheap price for customer → China has proved its power using automation in manufacturing by producing the quality of goods as demanded by the customer.
- ERP stands for “Enterprise Resource Planning” software;
- SAP, Oracle → best known examples;
- Integrates entire organisation through common computer server, software and communication channel;
- Possibility of integration with vendors and customers for efficient resource management;
- Each succeeding person validating / updating the information fed by the earlier one resulting into:
- Avoidance of duplicity of work / efforts;
- Information getting validated / cross-checked;
- Rights of each person defined à non-interference from others à independence of operations with controls defined by the software.
- Availability of fast information regarding turnover, production, stock, in-movement stock, income, expenses, assets (receivables, bank, fixed assets, investment, loans & advances, etc.) & liabilities (vendors’ payables, statutory dues, etc.);
- Monitoring of pendency in the entire organisation (customers’ orders; vendors’ purchase / job orders; backlogs in transaction-processing; work-in-progress inventories in production, etc.);
- Supports business intelligence facilitating
- Forecasting the future by analysing the past data + additional parameters;
- Situation analysis (what-if studies);
- Analysis of processes and resource utilisation (time & money).
First generation ERP vs. standard ERP
Standard ERP like SAP, Oracle etc.
- have been tested in various organisations across different industries;
- have incorporated standard processes in the software;
- security and controls are fully tested → incorporation of tested firewalls → not easy to breach the software security;
- range of standard processes within an industry also available → fast modification of processes and controls;
- faster implementation;
- can take care of integrating locations spanning over various countries;
- Costly implementation;
First generation ERP
- These ERP require experience of understanding different business processes of various organisation in an industry → lacks maturity;
- Advantages of standard ERP are disadvantages of first generation ERP and vice-versa
Limitations of Computerisation
- Commitment of CEO and Top management is a must → initial implementation demands switching from existing practices → standard practices;
- GIGO (Garbage-in-Garbage-out) → quality of software output dependent largely on the quality of data fed into the software → need for built-in controls for data entry, data access, data validation;
- Faulty or not fully tested programming of the software → lack of controls → breach of security in processes → financial loss to the organisation;
- Faster saturation → fast introduction of new technologies → adoption / switch-over is not that quick.
Development of software vs. Third party standard software
Development of software
- In-house software programming team
- Needs experienced team leader to head the department;
- Organisation can develop the software as per its needs → no need of adopting the third party processes;
- Gradual integration of all departments possible without full organisation integration;
- Lacks transparency → bypassing of possesses possible.
- Outside software developers
- Limitations with software programmers;
- They are not functional experts → they require needs of the organisation to be specified clearly by users under requirement analysis;
- Users are normally busy in day-to-day operations → not willing to spend time in articulating the requirements → un-clear development of software → disputes between software company and organisation → failure of software implementation.
Third party standard software
- Standard software with defined processes;
- Incorporates the best practices of various organisations in the industry;
- Advantages of “development of software” are disadvantages and vice-versa.
Traditional storage of software
- on organisation’s closed servers;
- with organisation creating firewalls of restrictions in accessing and modifying the information;
- accessible to limited users of organisation;
- Responsibility of Information Technology (IT) department
- Updation of software;
- Up-gradation of computer hardware (servers and users’ computers);
- Resolving software and computer hardware compatibility issues;
- Regular data back-ups;
- 24 X 7 working of entire computer-system;
- Shared services → one organisation managing computer hardware & software → other organisations taking the computer space + software on hire / rent;
- Responsibility of IT department listed above shifted to the third party;
- Shared services available via internet → large users including customers & vendors can be inter-connected depending upon their rights;
- Third-party softwares also available → no need for in-house software development;
- Data of entire organisation with outside organisation → Chances of misuse / leakage;
- Limitations with third party software
- Difficulty in integration of departments not covered in the software;
- Each organisation has different processes → unless organisation willing to adopt third party standard processes → difficulty in adoption of new processes;
Deliverables (i.e. expectations from the Department)
- Integration of processes / departments / functions → Efficient management of processes → no wastage of resources (time & money);
- Inbuilt controls → Nobody taking the advantage of computerisation while everybody assuming everything being safe;
- Safety of software data
Some of the Process Implementation for better Computerisation
- Security of software data
- Putting appropriate firewalls restricting the access of data, especially of previous years
- Password expiry after a given period;
- Integration with mobile → validation through one-time password (OTP);
- Integration with email → validating the new account;
- Answer of security questions before password reset.
- Data access history
- data access by unauthorised user to be controlled → whether there is any security breach;
- Regulating data copy, data e-mailing, download, upload, etc.
- CD writers, USB access on computer CPUs to regulate;
- Smart phones with camera function to check, if required for sensitive operations;
- Third-party email server access to restrict;
- Regular backups of data;
- Segregating the current year with previous year data→ previous year data to move to history with limited access
- Data alteration features to regulate
- Why the already entered data requires change? → to be analysed → to manage the process;
- Data modification rights only with senior management;
- History of data change to be kept;
- Version control of changes in the software to be managed → each version to be tested for in-built control before roll-out;
- Review of existing processes
- Whether certain rights of a user need to be restricted?
- Whether current physical processes to be built in the software and software needs to be modified? (e.g. change in law)