Organizations are established for the primary goal of revenue generation, which entails linking consumers to available products. Data is one of the core components of business operations, requiring effective data management and information processing systems. Boiko argues that as an organization grows, so does the volume of data involved.
In the case presented, the manufacturing company has been growing steadily over the past four years. Growth is associated with increased production levels, sales, human resources, supply chain risks, and expansion challenges. With the current growth rate, the organization has to develop new techniques of operation to sustain its growth and increase competitiveness.
The choice of an information system is crucial as it determines organizational growth and sustainability. Rainer and Prince define an information system (IS) as a combination of tools and networks through which an organization generates, collects, filters, and shares information. The information aids in business decision-making, analysis, visualization, control, and coordination.
The information needs, organization size, and resources are the main factors that influence the choice of an information system. In the case of a new manufacturing company, knowledge generation is vital. Therefore, the organization would benefit more from a knowledge management system than other information systems.
Although the organization has been generating considerably high income for the past four years, it is faced with expansion challenges that may significantly affect its profitability. A knowledge management system (KMS) is essential in this case because it is used by all organizational levels; employees, middle management, and executives.
According to Chaurasia, knowledge management is the deliberate method of defining, organizing, integrating, and disseminating an organization’s personnel’s expertise and knowledge. The KMS enables organizations to gather external knowledge and improve operations. Therefore, the manufacturing company would benefit more from a KMS as it needs to understand the market, improve customer operations and develop better communications.
Although the organization has been progressing without an information system, it should discontinue the trend and adopt the KMS for various reasons. First, the new market conditions are bound to impact its operations as it expands into new regions. A KMS will be needed t enable employees and managers to share available knowledge and integrate their expertise into every area of operation.
Second, customer needs are dynamic, requiring managers to evaluate the prevailing demand and act accordingly. Chaurasia et al. assert that an information system drives innovation and sustainability through shared organizational values. Therefore, the organization cannot sustain its profitability and maintain its place in the market if it continues with the traditional information management systems.
Communication and collaboration are key components for organizational growth. According to Boiko, a knowledge management system promotes internal communication between employees and managers and facilitates collaboration with various stakeholders.
As the supply chain changes, the organization needs to adapt faster and more efficient ways of external communication. This will help managers to detect and avert supply chain risks, thereby minimizing losses.
Essentially, the organization’s management needs to adopt current technological solutions. Without these changes, it may fail to meet customer expectations, face a decline in profitability, and consequently, be forced out of the market.