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Sunday, 7 August 2011

Obstacles to Small-Scale Agriculture



Obstacles to Small-Scale Agriculture :American Experience

Who Will Feed the People?

By Chukutem Idise
"In the future, more people will have to grow their own food" has become a truism among pundits and observers who are paying attention to the changing state of western industrial civilization, and of the U.S. in particular. Declining energy resources, ecological degradation, and global financial disolution are a few of the trends that are and will be impacting agriculture-as-we-know-it, and forcing agriculture-as-it-will-be.
That chemical-based farming is a failing experiment has been well-documented elsewhere; numerous books and articles have explored declining soil fertility, chemically-resistant weeds and pests, the tainting and depletion of irrigation water, the shrinking diversity of seeds, the dangers of genetically modified crops, and the plummeting nutritional value of fruit, vegetables, and grains. I will not reiterate these issues here, except through examples that address my points, which concern the future of agriculture.
The "need" for a smaller-scale, non-chemical-based agriculture is clear. So are the attributes that it must have. This agriculture will be regionally-based, because the means for shipping produce around the world will no longer be profitable. This agriculture will be based more on animal power (two-legged and four-legged), because machines will be few, and the fuel for them too expensive or unavailable. This agriculture will focus on soil-building rather than chemicals, because the chemicals are sourced from the same raw materials that make the fuel. This agriculture will break with monocropping over hundreds of acres and instead utilize small parcels intercropped. And, this agriculture will have to involve much more than 2% of the population, even if that population is in decline.
I must mention that, in my opinion, the forces at work in the world today -- energy, ecology, economics -- are of such a large scale and their inertia so powerful that we are being coy when we say we "need" to switch to a smaller-scale, non-chemical agriculture. I suspect that we "will be" making that switch, like it or not, planned or not. No need to rally for the ball that was tossed in the air to come back down. It's on its way, like all things that go up. But the transition -- the beginning of which we are living to see right now -- is a very tricky one, to say the least!
Despite appearances -- which include the mainstreaming of "Organic", and the growth of farmers' markets, CSAs (Community Supported Agriculture), and urban agriculture -- very little fieldwork (pun intended) is happening that meaningfully addresses the emerging challenges of our time. A "100 mile diet" for more than a few "sustainability" geeks is still the stuff of fantasy. The mega-farming system born of the 60's "Green Revolution" is still what puts food on the table of almost everyone in the U.S.
I am a farmer in Oregon's Willamette Valley. This season I have partnered with two other farmers and we are working about seven acres together, trying to grow vegetables, medicinal herbs (not OMMP) and staple crops such as legumes and grains. In the recent past, we were urban farmers in Portland, growing produce for our CSAs in little yards and empty lots while experimenting with staple crops on larger suburban and exurban plots.
Among us, we have over ten years of farming experience, a botany degree, and work in the restoration field, as well as above-average intelligence, impressive resourcefulness and a dawn-to-dusk work ethic rarely seen anymore these days in the U.S. (at least among white people). We are not trying to get $-rich, but we are not idealistic money-haters. Until the seed-and-feed, gas station, and hardware stores take barter, we need the cash. We do not limit ourselves to a single doctrine, such as permaculture. We are unconcerned with the pettiness of politics or the vagaries of the nation's culture. We are simply people who are aware of the emerging food crisis, and want to see what it takes to grow a sustenance-providing amount of food and medicine for ourselves and a few friends and family who threw investment our way.
We are farming on land that was formerly used for grass-seed production, and has been hammered with chemicals and big machines for decades. Over 50% of the cropland in the Willamette Valley is planted in grass-seed, so the lessons we are learning are potentially valuable for future farmers who will be attempting the same in this area. But the issues we are facing -- lack of soil fertility, residual chemical effects, out-of-balance insect populations -- will be found across the nation for anyone trying to farm on land that was conventionally abused.
While in the city, my bicycle-based CSA operation gained much media attention, so I was able to raise enough resources to give urban farming a very serious try. Unlike most urban farmers, I did not have rent or other bills to pay, so was able to devote myself full time. Having thus immersed myself in the practice, theory, and context of agriculture, both urban and rural, for the last several years, the following obstacles to sustainable farming have become obvious to me.
1) Not Enough Farmers
Less than 2% of the U.S. population is directly involved in farming. Two hundred years ago, it was over 90%, and as recently as the 30's it was still 40%. Increased mechanization and cheap fuel were the paired enablers of this historic shift to giant farms manned by a handful of people. The so-called "Green Revolution" of the 60's, with its "better living through chemistry" was the hammer that nailed shut the coffin on small-scale farming, which has been dying a drawn-out death in the decades since. Despite a small uptick in the number of small farms over the last decade -- due largely to the Organic trend -- most agriculture is still huge and corporate-run. The population of the U.S. and much of the world is utterly dependent on this system for sustenance, and will remain so while any transition takes place.
This 2% will have to grow, but how? Who wants to give up a working week of five 8-hour days for one that is seven 12-16 hour days? Who wants to give up a regular check for financial uncertainty and perhaps impoverishment? Who wants to give up their city socializing and entertainments (both increasingly electronic)? Or maybe their electricity and hot running water? Not most people I have met, whether the proposition is to farm in the country or in the city.
Many Portlanders I met were inspired by the urban farming beginning to take place in the city, and some dreamed of Havana. As portrayed in the film, "The Power of Community", a radical rearrangement of agriculture took place in Cuba after the fall of the Soviet Union and the attendant loss in resources. Non-chemical farming became the only viable option, and the practice of urban farming grew dramatically. The makers of the film claimed that Havana was now growing over 50% of the produce it consumed within its own city limits. Impressive and inspiring, on the face of it.
But Portland is and was not Havana. A few dozen people starting CSAs and selling to restaurants does not a food revolution make, and besides, Cuba's very different style of government was likely the major steering and empowering force in that shift. Most Portlanders would probably not appreciate the contrast in ownership models, etc., used on that island, were they to be imposed to them and their neighborhoods (which is not to denigrate Cuba or its response in any way).
Portland is a hypey town, and the press that urban farming got made it look much more impressive than it was. I know this from reading the articles about myself and my own operation, all of which but one had glaring errors that presented things not quite like they were. One result of the press coverage was that people made the assumption that "OK good, somebody's taking care of that," and went on with their days.
But no, nobody's taking care of that yet, really. Urban farming has still not attracted enough practitioners to be taken seriously.
2) Lack of Equipment for Small Scale Farming
Suppose you want to plant an acre each of wheat, soup beans, and millet. How does one plant, cultivate, harvest, and process crops on this scale? Wheat can yield over two tons per acre, beans and millet half a ton each. You can't efficiently seed plots of these size by hand. Or weed them, or harvest them, or thresh and winnow them. Not without a lot of people, that is, and the days are over when the whole village would drop what they were doing and turn out to bring in the harvests from the fields.
The vast majority of machinery available on the market today in the U.S. is geared toward the hundreds, or thousands (or even hundreds of thousands) of acres. It's too big to move around in such a small area.
The equipment needed for small acreage farming is no longer manufactured in the U.S., and hasn't been on a mass scale since the 70's. Most of the old stuff is sitting in rusty heaps at the edges of fields or has been repurposed as "yard art". Earlier this season, we watched helplessly as scrappers hauled away an old combine they had found in the blackberry brambles on the property we are farming. Being lessees, we were unable even to buy enough time to see if it was repairable, but we saw pieces go by that could have been used on their own for seed-cleaning at our scale.
Equipment for small acreage farming is still manufactured and sold in other parts of the world, including Europe, China, and India. The technology has continued to develop in these places, with new innovations improving on tried-and-true designs. We farmers have drooled over the beautiful machines that Ferrari is making. But the cost of purchasing and shipping this equipment to the States is a prohibitive factor for our operation.
The Amish and a few hobbyists have been keeping alive draft animal practices, but these folks are also few and far between. Animal husbandry is not a skill learned overnight, and, as with vegetables, some heirloom breeds that are good for field work have been lost or are dwindling.
In the city, the situation is easier, because the plots are usually small enough to be polished off with a walk-behind rototiller. Here, too, there are serious quality issues, and the best machines are made overseas, many of them in Italy. Regardless of how good the equipment is, some knowledge of small-engine repair will really help the farmer, especially to avoid costly by-the-hour fix-it shops, who might or might not do the job right.
Additionally, for farmers rural and urban, parts could eventually become an issue. If the economic fabric frays to the point where shipping becomes expensive, then the next skill the farmer will have to take up -- or better yet, find in someone else who wants to barter for food -- is metal fabrication, including welding. If you don't feel like picking up a pitchfork, consider enrolling in a VoTech.
3) Lack of Knowledge about Small-Scale Farming
The knowledge of how to grow on a smaller scale is also disappearing. The average age of an Oregon farmer is 67. If he (usually) even remembers how things were done before, who knows if he is capable of changing, or if there are enough of him around who are willing or able to teach younger people. The big equipment he uses cost hundreds of thousands of dollars and isn't paid off yet. What else is he supposed to do? Federal agricultural subsidies aren't going to Grandpa Grass Farmer; they're going to ConAgra, Cargill, and Archer Daniels Midland.
We have the pleasure of knowing the farmer in our area, Harry McCormick of Sunbow Farm, who founded the Willamette Valley Grain and Bean Project. Harry has been farming near Corvallis since 1972, and has a wealth of knowledge and experience about growing horticultural and field crops. He started the Grain and Bean Project a few years back to try to help farmers get out of the grass-seed business and start growing food. Thanks to his efforts, thousands of acres are in transition, but that's not as impressive as it sounds. Harry himself describes this work -- the work of cultivating staple crops on a small-scale basis -- as "fringe".
Old USDA publications from the early 20th Century (and earlier) will become more useful again, as they describe in detail many practical, reliable techniques that don't involve 40+ foot wide combines.
4) Lack of Financial Resources
Will there be a Marshall Plan for small-scale agriculture in the U.S.? Not from a president who appointed someone from Monsanto to the USDA. How about from the cities, counties or states? Nope. They're going broke and cutting essential services already. The private sector? There's no money in it. The non-profits with their grants? Only if you fit their ideological stripe and promise to play by their rules. Ralph Nader's bizarre vision of the super rich saving us is only slightly less far-fetched than the idea that the Galactic Federation will be raising us to the next level of consciousness in December 2012.
Though I had no difficulty selling shares to my produce CSA in Portland (and could in fact have kept a long waiting list), I have not had similar success with raising funds for our current project. I don't know why, for sure. Possible reasons: Staple crops and herbal medicines, delivered once at the end of the season, doesn't offer the same gratification as twice-weekly produce. Or, grains and beans lack the trendiness of urban farming, which in Portland has reached the status of sexy (for which I will gladly accept some credit!). Or, having moved to the country, I am now out-of-sight and out-of-mind. Or, I was just too outspoken for some people's standards, and their self-obsession led them to take personally what I meant culturally. Who knows?
The bottom line is that there ain't much of one. In our case, the only way we were able to invest as much as we have (a low five-figure amount), is because one of us had an inheritance from a recently deceased mother to draw on. Which is not exactly what most people would wish for, or that many can even look to as a possibility. Going into this year's season we had seeds, tools, books, and other hard-good resources (altogether worth another low five-figure amount) only because we had invested in those things so well during the urban farming years. We were not starting from scratch. In these ways, we had a financial and material advantage that other people can't count on.
Not that these resources have been adequate to the task; they haven't. We estimate that our project could only be truly effective if we had a low six-figure sum for a three year period. Who is going to hand that out, to tens of thousands of farmers across the nation?
5) Lack of Market
One farmer in the Grain and Bean project is sitting on 17,000 lbs. of garbanzo beans because he could not find a buyer willing to pay a reasonable price. While the big boys are continuing to be subsidized -- not just by the USDA, but by the U.S. military holding control of various regions and their resources -- the non-chemical farmer coming up in this country is unable to compete on price.
One year in the city, I calculated that my hourly wage was something like 5 cents. Even in a so-called "Foodie Town" like Portland, it was challenging to find a market for my produce. Most consumers, including restaurant owners, are still shopping for produce with a list in their hand, rather than learning from the farmer about what can and can't be grown in their region. On the first hot day of Summer, which happens sometime in late June in the mild Northwest, everyone wants tomatoes, watermelon, and corn. Nevermind that those crops are still 2-3 months away at that time of year (if they ripen at all).
The farmers bring some of this on themselves, by choosing to cater to perceived customer desires, rather than by concentrating on what grows best and presenting a balanced, nutritious diet to the customer, and educating them about it. For example, the Pacific Northwest is the best place in the U.S. to grow parsnips: the roots can winter in the ground and don't need to be dug up and stored, and, the sweet flavor comes out only after a couple-three freezes, but the ground doesn't get cold enough to kill them. For this second reason, California parsnips never taste as good. The temps just don't go down enough. Here is a delicious -- almost sugary when roasted -- vegetable to get you through the winter, along with carrots and turnips also from the ground through the cold months, and very few Oregon farmers are growing them.
Even if you grow something people want, making a profit is still a challenge. Restaurant owners want to pay a wholesale price that compares well with Cash-and-Carry, and farmers' market customers are often looking for a bargain, too. Farmers' Markets can be expensive to attend for the starting-out farmer, what with the costs of a tent, table, bags, a legal scale, etc., and with market policies such as mandatory liability insurance. Most Farmers' Markets would more accurately be called Farmers'-Market-Manager-and-Their-Non-Profit-Board Markets, as they have become highly regulated structures, making demands of farmers in the interest of creating their own personal vision of a market that matches their effete tastes. Gone are the days when you could just drive a truck up and sell produce out of the back, with no cost except gasoline and a tarp.
6) The Wasteland Left Behind by Conventional Farming
Much of the farmland in the United States is a wreck and not ready to eat out of. Here in the Willamette Valley, over 50% of cultivated acres are in grass-seed. Another sizeable percentage is in Christmas trees, for which very poisonous chemicals are used, including Atrazine, a ground water contaminant. Nurseries of ornamental plants account for another chunk. Only 5% of the Valley is in food production. That's a lot of poisoned, not-ready-to-farm land.
We are seeing first-hand the issues in making a grass-seed-to-food transition, and the picture is sobering. The first thing we discovered is that you can't simply till the grass under and plant. The list of crops that can grow unaided in our particular toxic circumstance doesn't go much beyond jerusalem artichokes, chicory and horehound. Soon after arriving, we transplanted healthy perennial medicinals into the ground and watched as they turned red immediately. Some grew out of it, some did not. They have all been stunted and in some cases misshapen. These were the kinds of plants that are said to thrive in poor soils, and which we had never amended before. Tough old birds reduced to clipped weaklings. Sad to see.
Without the money to amend all the soil, we took to carefully dressing each spot or row where we would be seeding or transplanting. This has worked somewhat well, but is not a farming-technique that I would recommend. The result has been a field that is still predominantly infertile, with little "pots" of short-term fertility plugged into it. An act that's difficult to follow the second season, and not at all a long-term solution.
We were able to get a list of the chemicals used by the grass-seed farmers. Broad-leaf herbicides, 10-10-10 fertilizer, fungicides, and growth regulators were their main tools, with Round-Up at the end of the five to seven year planting cycles. A toxic brew, to be sure, but not nearly as intense as what people will find at sites where other crops were farmed.
The effects of these chemicals are persistent, even when the chemicals themselves are (allegedly) not. Fungicides take out the mycorrhyzal bacteria so important for healthy root growth, and must be re-introduced. When artificial nitrogen is used, the nitrogen-fixing bacteria in the soil stop fixing, and must be restarted. When broad-leaf herbicides are used, the diversity of plant life becomes constricted to those tenacious weeds that can survive the pounding, and their vigor in the absence of chemicals can quickly overcome the organic farmer's new crop.
Cover-cropping and other methods could eventually fix these hurting lands, but they take years. So, when people realize that they can't wait any longer to switch to small-scale, non-chemical farming, will it be too late? If it's going to take empty shelves in stores to make more farmers, then the future will bring starvation.
Interestingly, we found that the soil in the city was much cleaner and more productive than any of the country land we have worked (five different locations). The image in city minds of a pristine countryside is false. Many agricultural chemicals are flat illegal to use in urban areas. Nope, the country has become a toxic wasteland, and people have another thing coming if they think we'll just be able to fan out into the fields around the cities and start growing our own food when the machine breaks down.
7) Extreme Weather
The apparently more common instances of extreme climate events such as droughts and flooding are leading to crop losses around the world and in the United States. I will take no stand here as to whether these events are caused by human industrial activity, HAARP and weather modification, or are merely another trend like the "Little Ice Age" or "Medieval Warming" of the past. But as a farmer who closely observes the local weather, and who keeps up-to-date about other farmers' weather, it is clear to me that we definitely are in a period of increasing climatic instability as relative to immediately preceding decades.
Hundreds of hours of work and many months of growing can be wiped out by an early frost, a record heat-wave, or an unseasonable rain. You can't eat your insurance policy, even if you have one. This year, in our location, we experienced precipitation high above average in March, April and May, preventing tilling and hence the planting of spring grains. Then, in June, we got rain twice, the second time only a sprinkle. In July, we had one two-day rain event. Last year, the rains didn't stop until early July, also preventing tilling. Then the October rains started in September. Going back season-by-season, each year of the last six has been marked by different extremes of wet, dry, hot and cold, all considered atypical. So, abnormal is the new normal, which makes it very difficult to plan, if not plant.
Historically, agriculture has been marked by famine on a regular basis. That the U.S. has not experienced widespread crop-failure since the Dust Bowl is an historical abberration. With the floods in the Midwest and the droughts in Texas and the Southwest, perhaps we are witnessing the end of that lucky streak currently. In any case, the drama of weather will play itself out region-by-region, farm-by-farm, farmer-by-farmer, and does not seem likely to be easily predictable.
8) The Social Challenges
Sometimes when I'm out there in the field doing repetitive and arduous by hand because there's no other way to do it (sometimes because that's just how it's done and always has been done), I find myself wondering, "How do people think we are going to switch from conventional to 'sustainable' agriculture?" The on-the-ground facts paint a picture of mind-boggling challenges, tangled (by nature) logistics, steep learning curves, tremendous labor, and radical lifestyle change for which no one seems ready.
The people of the U.S. are, by and large, the pampered children of Empire, unaware and uninterested in their own priveledge, taking their war-won comforts as an entitlement and their narcissism as a birthright. For much of the rest of the world, the view is different: the globe is a plantation, its people slaves, and the U.S. is the master's house on the hill. The flabby inhabitants of that mansion don't want to go out into the fields for fear of getting their hands dirty. Or chop their own wood, or carry their own water, or so on.
Why does this matter? Because although we are all individuals, we are all -- whether we like it or not -- "in this together". U.G. Krishnamurti put it in terms of the cells in the body; each cell is its own individual entity, but each cell is dependent for its survival on all the cells immediately surrounding it, each of which is dependent on the cells around them, etc. There is no going-it alone. "Rugged individualism" has always been a myth.
When it comes to my own current dedication to farming, I have personally experienced what I can only describe as some kind of instinct with a species-centered focus, to work on our collective survival. I do not consider myself better or worse than anyone else for choosing this work. There is not for me a political, philosophical, or sentimental motivation. I offer no vision and have no hope. And I do not believe that I will survive trying times just because I am trying. I say all this to dissuade you from your own delusions of hope, if you have any.
Wishing, praying, or (a la Portland) "manifesting through intention" do not grow crops. Neither does hard work on a piece of land if that land is poisoned, or you lack the equipment or resources, or if the weather knocks you for a loop. Those are the circumstances that all the farmers, old and new, will be facing. Agriculture has always been a crapshoot, and it looks to me like the odds against are rising.
Kollibri terre Sonnenblume is a co-founder of Walking Roots Farm, near Monmouth, Oregon. For contact information, visit: http://walkingroots.infotage.net
 





Saturday, 6 August 2011

Decision Trees In Management


Decision Trees In Management

Choosing by projecting "expected outcomes"


Decision Trees are excellent tools for helping you to choose between several courses of action. They provide a highly effective structure within which you can lay out options and investigate the possible outcomes of choosing those options. They also help you to form a balanced picture of the risks and rewards associated with each possible course of action.

Drawing a Decision Tree

You start a Decision Tree with a decision that you need to make. Draw a small square to represent this towards the left of a large piece of paper.
From this box draw out lines towards the right for each possible solution, and write that solution along the line. Keep the lines apart as far as possible so that you can expand your thoughts.
At the end of each line, consider the results. If the result of taking that decision is uncertain, draw a small circle. If the result is another decision that you need to make, draw another square. Squares represent decisions, and circles represent uncertain outcomes. Write the decision or factor above the square or circle. If you have completed the solution at the end of the line, just leave it blank.
Starting from the new decision squares on your diagram, draw out lines representing the options that you could select. From the circles draw lines representing possible outcomes. Again make a brief note on the line saying what it means. Keep on doing this until you have drawn out as many of the possible outcomes and decisions as you can see leading on from the original decisions. This decision largely depends on the nature and size of your business..........

Once you have done this, review your tree diagram. Challenge each square and circle to see if there are any solutions or outcomes you have not considered. If there are, draw them in. If necessary, redraft your tree if parts of it are too congested or untidy. You should now have a good understanding of the range of possible outcomes of your decisions.

Evaluating Your Decision Tree

Now you are ready to evaluate the decision tree. This is where you can work out which option has the greatest worth to you. Start by assigning a cash value or score to each possible outcome. Estimate how much you think it would be worth to you if that outcome came about.
Next look at each circle (representing an uncertainty point) and estimate the probability of each outcome. If you use percentages, the total must come to 100% at each circle. If you use fractions, these must add up to 1. If you have data on past events you may be able to make rigorous estimates of the probabilities. Otherwise write down your best guess.


Calculating Tree Values

Once you have worked out the value of the outcomes, and have assessed the probability of the outcomes of uncertainty, it is time to start calculating the values that will help you make your decision.
Start on the right hand side of the decision tree, and work back towards the left. As you complete a set of calculations on a node (decision square or uncertainty circle), all you need to do is to record the result. You can ignore all the calculations that lead to that result from then on.

Calculating The Value of Uncertain Outcome Nodes

Where you are calculating the value of uncertain outcomes (circles on the diagram), do this by multiplying the value of the outcomes by their probability. The total for that node of the tree is the total of these values.
In the example in Figure 2, the value for 'new product, thorough development' is:
0.4 (probability good outcome) x $1,000,000 (value) =
$400,000
0.4 (probability moderate outcome) x $50,000 (value) =
$20,000
0.2 (probability poor outcome) x $2,000 (value) =
$400
+
$420,400


Calculating the Value of Decision Nodes

When you are evaluating a decision node, write down the cost of each option along each decision line. Then subtract the cost from the outcome value that you have already calculated. This will give you a value that represents the benefit of that decision.
Note that amounts already spent do not count for this analysis – these are 'sunk costs' and (despite emotional counter-arguments) should not be factored into the decision.
When you have calculated these decision benefits, choose the option that has the largest benefit, and take that as the decision made. This is the value of that decision node.


In this example, the benefit we previously calculated for 'new product, thorough development' was $420,400. We estimate the future cost of this approach as $150,000. This gives a net benefit of $270,400.
The net benefit of 'new product, rapid development' was $31,400. On this branch we therefore choose the most valuable option, 'new product, thorough development', and allocate this value to the decision node.

Result

By applying this technique we can see that the best option is to develop a new product. It is worth much more to us to take our time and get the product right, than to rush the product to market. It is better just to improve our existing products than to botch a new product, even though it costs us less.

Key Points:

Decision trees provide an effective method of Decision Making because they:
  • Clearly lay out the problem so that all options can be challenged.
  • Allow us to analyze fully the possible consequences of a decision.
  • Provide a framework to quantify the values of outcomes and the probabilities of achieving them.
  • Help us to make the best decisions on the basis of existing information and best guesses.
As with all Decision Making methods, decision tree analysis should be used in conjunction with common sense – decision trees are just one important part of your Decision Making tool kit.’’

Management Information system, Types, advantages and Enterprise Applications

A management information system (MIS) is a system that provides information needed to manage organizations effectively.[ Management information systems involve three primary resources: technology, information, and people. It's important to recognize that while all three resources are key components when studying management information systems, the most important resource is people[according to whom?]. Management information systems are regarded as a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization] Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.[2]

Overview

Initially in businesses and other organizations, internal reporting was made manually and only periodically, as a by-product of the accounting system and with some additional statistic(s), and gave limited and delayed information on management performance. Previously, data had to be separated individually by the people as per the requirement and necessity of the organization. Later, data was distinguished from information, and so instead of the collection of mass of data, important and to the point data that is needed by the organization was stored.
Earlier, business computers were mostly used for relatively simple operations such as tracking sales or payroll data, often without much detail. Over time, these applications became more complex and began to store increasing amount of information while also interlinking with previously separate information systems. As more and more data was stored and linked man began to analyze this information into further detail, creating entire management reports from the raw, stored data. The term "MIS" arose to describe these kinds of applications, which were developed to provide managers with information about sales, inventories, and other data that would help in managing the enterprise. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications, Enterprise Resource Planning (ERP), Enterprise Performance Management (EPM), Supply Chain Management (SCM), Customer Relationship Management (CRM), project management and database retrieval applications.
"The five eras are general-purpose mainframe and minicomputer computing, personal computers, client/server networks, enterprise computing, and cloud computing."(Management Information Systems: Managing the Digital Firm, 11th Edition. Prentice Hall/CourseSmart, 12/30/2008. p. 164). The first era was ruled by IBM and their mainframe computers, these computers would often take up whole rooms and require teams to run them, IBM supplied the hardware and the software. As technology advanced these computers were able to handle greater capacities and therefore reduce their cost. By 1965 microprocessors began to take the market away from mainframe computers. This technology allowed small desktop computers to do the same work that it previously would have taken a room full of computers. This also decentralized computing power from large data centers to smaller offices. In the late 1970s minicomputer technology gave way to personal computers, now for a relatively low cost anyone could have a computer in their own home. This allowed for businesses to give their employees access to computing power that 10 years before would have cost tens of thousands of dollars. This proliferation of computers also helped create a need to connect these computers together on a network giving birth to the internet. As technology has increased and cheapened the need to share information across a large company had also grown, this gave way to the client/server era. With this era computers on a common network were able to access shared information on a server. This allows for large amounts of data to be accessed by thousands and even millions of people simultaneously. The latest evolution of Information Systems is cloud computing a recent development, cloud computing lets users access data stored on a server, where they can not only see the data but also edit, save, download or upload. This along with high speed networks has led to a much more mobile view of MIS. In cloud computing the manager does not have to be at a desk to see what their employees are working on but instead can be on a laptop, tablet pc, or even smartphone.
An 'MIS' is a planned system of the collection, processing, storage and dissemination of data in the form of information needed to carry out the management functions. In a way, it is a documented report of the activities that were planned and executed. According to Philip Kotler "A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making. The area of study called MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science. IT service management is a practitioner-focused discipline. MIS has also some differences with ERP which incorporates elements that are not necessarily focused on decision support.
The successful MIS must support a business's Five Year Plan or its equivalent. It must provide for reports based upon performance analysis in areas critical to that plan, with feedback loops that allow for titivation of every aspect of the business, including recruitment and training regimens. In effect, MIS must not only indicate how things are going, but why they are not going as well as planned where that is the case. These reports would include performance relative to cost centers and projects that drive profit or loss, and do so in such a way that identifies individual accountability, and in virtual real-time.
Anytime a business is looking at implementing a new business system it is very important to use a system development method such as System Development Life Cycle. The life cycle includes Analysis, Requirements, Design, Development, Testing and Implementation.

Types of Information Management Systems

There are many types of information management systems in the market that provide a wide range of benefits for companies.
  • Transaction processing systems (TPS) collect and record the routine transactions of an organization. Examples of such systems are sales order entry, hotel reservations, payroll, employee record keeping, and shipping.
  • Management information systems (MIS) produce fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems (TPS) to middle and operational level managers to provide answers to structured and semi-structured decision problems.
  • Decision-support systems (DSS) are computer program applications used by middle management to compile information from a wide range of sources to solve problems and make decisions.
  • Executive support systems (ESS) is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting, human resources and operations.

Advantages of Information Management Systems

The following are some of the benefits that can be attained for different types of information management systems] (1)The company is able to highlight their strength and weaknesses due to the presence of revenue reports, employee performance records etc. The identification of these aspects can help the company to improve their business processes and operations. (2) The availability of the customer data and feedback can help the company to align their business processes according to the needs of the customers. The effective management of customer data can help the company to perform direct marketing and promotion activities. (3)Information is considered to be an important asset for any company in the modern competitive world. The consumer buying trends and behaviors can be predicted by the analysis of sales and revenue reports from each operating region of the company.

     Enterprise Applications

  • Enterprise systems, also known as enterprise resource planning (ERP) systems provide an organization with integrated software modules and a unified database which enable efficient planning, managing, and controlling of all core business processes across multiple locations. Modules of ERP systems may include finance, accounting, marketing, human resources, production, inventory management and distribution.
  • Supply Chain Management (SCM) systems enable more efficient management of the supply chain by integrating the links in a supply chain. This may include suppliers, manufacturer, wholesalers, retailers and final customers.
  • Customer Relationship Management (CRM) systems help businesses manage relationships with potential and current customers and business partners across marketing, sales, and service.
  • Knowledge Management System (KMS) helps organizations facilitate the collection, recording, organization, retrieval, and dissemination of knowledge. This may include documents, accounting records, and unrecorded procedures, practices and skills.
Developing Information Systems
"The actions that are taken to create an information system that solves an organizational problem are called system development (Laudon & Laudon, 2010)". These include system analysis, system design, programming, testing, conversion, production and finally maintenance. These actions usually take place in that specified order but some may need to repeat or be accomplished concurrently.
System analysis is accomplished on the problem the company is facing and is trying to solve with the information system. Whoever accomplishes this step will identify the problem areas and outlines a solution through achievable objectives. This analysis will include a feasibility study, which determines the solutions feasibility based on money, time and technology. Essentially the feasibility study determines whether this solution is a good investment. This process also lays out what the information requirement will be for the new system.
System design shows how the system will fulfill the requirements and objectives laid out in the system analysis phase. The designer will address all the managerial, organizational and technological components the system will address and need. It is important to note that user information requirements drive the building effort. The user of the system must be involved in the design process to ensure the system meets the users need and operations.
Programming entails taking the design stage and translating that into software code. This is usually out sourced to another company to write the required software or company’s buy existing software that meets the systems needs. The key is to make sure the software is user friendly and compatible with current systems.
Testing can take on many different forms but is essential to the successful implementation of the new system. You can conduct unit testing, which tests each program in the system separately or system testing which tests the system as a whole. Either way there should also be acceptance testing, which provides a certification that the system is ready to use. Also, regardless of the test a comprehensive test plan should be developed that identifies what is to be tested and what the expected outcome should be.
Conversion is the process of changing or converting the old system into the new. This can be done in four ways:
Parallel strategy – Both old and new systems are run together until the new one functions correctly (this is the safest approach since you do not lose the old system until the new one is “bug” free).
Direct cutover – The new system replaces the old at an appointed time.
Pilot study – Introducing the new system to a small portion of the operation to see how it fares. If good then the new system expands to the rest of the company.
Phased approach – New system is introduced in stages.
Anyway you implement the conversion you must document the good and bad during the process to identify benchmarks and fix problems. Conversion also includes the training of all personnel that are required to use the system to perform their job.
Production is when the new system is officially the system of record for the operation and maintenance is just that. Maintain the system as it performs the function it was intended to meet.

Wednesday, 3 August 2011

CAUSES OF THE GLOBAL ECONOMIC MELTDOWN



The causes of the global economic meltdown can be largely attributed to the definite in result of decades of economic mismanagement in both public and private sectors worldwide. It maybe argued that globalization, monetarism, and greed of major stakeholders set the stage for the recession.

However, the world over, these could be the possible causes:

                  GREED OF CORPORATE LEADERS

Generally speaking, CEOs enjoy excessive high salaries and other allowances when in office and apparently unexplainable retirement benefits otherwise called golden parachute even among those that mismanaged resources in their respective corporations. The collapse of some large industrial giants and their possible bail out by the government the world over, weakens business confidence and causes major meltdown in the value of stock.

          SUB-PRIME LENDING BY MORTGAGE BANKS

The policy designed to encourage more widespread home ownership in the United states for example, eventually resulted in lending to people whose income could not meet repayment obligations. Foreclosure and declining property values left mortgage banks holding non-performing assets or toxic assets and their survival suspect. Declining property values in turn, reduce the net worth of home owners and their readiness to spend on goods and services. This sub-prime lending occurred in American, Nigeria and other parts of the world hence,  they have to approach government for loans to recapitalize in order not to become bankrupt. This also had negative impact on the over-all business confidence of the people.

            DECLINING BANK LENDING TO THE PRIVATE SECTOR

Business pessimism, increasing stock of toxic assets in bank balance sheet and declining consumer spending discourages banks from further lending. An economy in recession cannot recover unless productive enterprises have access to credit and government is ready to run budget deficits.

                         REGULATORY DEFICIT

Banks, insurance companies and the stock exchange were subjected to regulatory deficit that doesn’t guarantee sustainability and this in turn, created a disadvantage situation to the share holders as they watch the mismanagement of their funds helplessly.

                   STOCK EXCHANGE MELTDOWN

Stock exchange prices, though normally influence by corporate performance are sensitive to other factors such as greed, poor regulatory framework resulting in insider trading, and perception of the impact of economic policies were some of the causes of the stock exchange meltdown.

            INDISCIPLINE USE OF CREDIT CARDS

Credit cards enable consumers to spend irresponsibly beyond their disposable incomes. An unsustainable personal debt overhang, eventually subverts the ability of consumers to consume. This is for the fact that larger percentage of their income is being used in servicing debt and repayment. Moreover, the uses of credit cards are largely on imported consumer goods. This also has advert effect on the balance of payment hence, increasing the amount of currencies held

REASONS FOR THE SPREAD OF THE GLOBAL ECONOMIC MELTDOWN


                 REASONS FOR THE SPREAD OF THE ECONOMIC MELTDOWN

There are several reasons/factors attributed to the spread of the economic meltdown worldwide. Initially, it was thought to be an American thing as witness from 2008. American recession which was the definite result of decades of economic mismanagement in both public and private sectors, quickly attained the status of global meltdown in all the continents and espousing differing ideologies hence, institutions, organizations were caught in the web of multifarious networks of globalization.

The possible reasons are as follows:
o        The growing integration of markets in goods, services and capital across national                                   borders. This has been one of the global economic achievements of the World Bank, IMF as expressed by good leadership in these institutions.

o        The increasing computerization of transactions in businesses and all forms of trades, created a major relationship and friendship among nations. Hence, nations depend on each others in their economic survival and the pursuit of their development agenda.

o        The increasing employment of internet in domestic and foreign transactions created some incredible facilities/services that better facilitated interdependency of nations.

§         The growing importance of networks which easily transmit local economic trend into a global phenomenon has been of global usefulness.

o        The unimpeded flow of capital i.e. Foreign Direct Investment and portfolio between countries is a clear indication of oneness among nations.

o        Another area in this direction is the World-wide adoption of reform packages that emphasize deregulation and liberalization as propounded by the World Trade Organization. This truly, is a global thing.

o        International competitiveness in production of goods and services determined by efficiency and productivity instead of resource endowment has kept every nation dependent on each other.

o        Obviously, with the emergence of globalization, economic crises can no longer be confined to one country or an economic community. It easily spreads to encompass the global economy.












         



Tuesday, 2 August 2011

THE APPLICATION OF MODELS/SIMULATIONS IN BUSINESS


THE PLACE OF MODELS/SIMULATIONS IN BUSINESS

Models are replica or copies of problem areas in business. They are theories, laws or equations, stating things about a problem and helping by given better understanding of it as well as aiding managers in times of decision making.

A simulation involves trying to mimic what might happen in reality. It allows a business to test –ideas and make decisions without bearing the consequences of real action if things go wrong. Once a problem is noticed in business, a simulation can be carried out several times quickly and cheaply in order to test alternative decisions. Interestingly, there are no risks involved and resources are not wasted at this point in time.

              COMMON FEATURES OF MODELS

  • They reflect the key characteristics or behaviors of an area of concern, thereby given the true pictures of issues concern.
  • Problems are generally cumbersome, but an ideal model tends to be a simplified version of area of concern.
  • They simulate the actions and processes that operate in the problem area.
  • Models often make use of formulae to express concepts.
  • They provide an aid to problem solving.’’ Etc.

          AREAS OF APPLICATION OF MODELS

Some models can be carried out using computer software. This allows decisions to be made quickly and many variables affecting decisions to be included. Management science and operation research are areas which often make use of decision making models.  In linear programming, models are also applicable.

In the area of marketing, models are used to consider the relationship between the strategic direction of the business and its marketing strategy.

                  TYPES OF MODELS

A typical model is either normative or positive in nature. And each is capable of producing different result.

                 THE NORMATIVE MODEL

A normative model describes how decisions should be made, rather than how they are made. It is a subjective proposal of how, ideally, decision should be made. A normative model provides a structured sequence of activities by which a business can identify and correct problems. However, the ability of the process to deliver the best decision depends on the activities in the process and the order/way in which they are carried out.

                     THE POSITIVE MODEL

The positive model deals with objective or value free explanations about how decisions are made. They attempt to show what is, rather than what should be. A positive model tries to solve some of the problems of the normative model in decision making. They are created using scientific method in the way as in real sciences. A theory is put forward with gathered evidence to support or refute…..


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