International Issues

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An Overview of Management Information Systems in China

by Ying Sai, Loyola Marymount University

As an area of research, Management Information Systems (MIS) has been established in the United States since the early 1960s, with the fascination about business decision-making fueled by the introduction of mainframe computers (Power, 2003; Cash et al, 1977). As technology advanced, not only the cost of collecting, processing, and storing information has been significantly reduced, but at the same time, large amounts of data can be accessed through high-speed Internet by millions of people simultaneously. The dot.com boom generated huge demand for MIS major in all levels from undergraduate to MBA to doctoral (Huang et al, 2003). Along with high-speed networks, the development of the mobile device has led to a much more mobile view of MIS in 1990s. The latest evolution in social networking and cloud computing has pushed MIS into a new level.

In China, however, Management Information Systems is a relatively new area. In the early 1990s, when PCs were replacing typewriters as standalone business machines throughout government agencies, computers started to enter businesses, universities, and individuals' homes. Since 1995, the government has invested heavily in building telecommunication infrastructure, TV networks, computer networks, and cell phone coverage networks (Xin, 2005). Only then, has Management Information Systems as an area on its own begun to take hold in China. A few universities, such as Beijing University, Wuhan University, and Remin University, renamed their Departments of Library Science to Departments of Information Management. This was the landmark moment of MIS in China.

Demand for information spread like an unstoppable wild fire in China. According to a government study published in April 2004, there were 600,000 websites in China and 17,000 databases were accessible through the Internet, doubling the number recorded the previous year. In addition, the horrifying epidemic of SARS in 2003 frightened a population ready to try anything new. The chaos generated from the lack of credible, trustworthy information forced the government to reevaluate its telecommunication and information distribution policies. In May 2004, Business Management Information Systems, for the first time, was officially recognized as one of the critical components of national information resources along with Government Information Systems and Public Information Systems (Yan, 2005).

MIS in Higher Education

The establishment of MIS in China in higher education can be summarized in three phases (Cai et al, 2001):

1. From 1990 to 1997, Management Information Systems was offered to managers as part of on-the-job training programs. The content of the course was more focused on basic concepts of MIS and introduction to MIS applications in industry.
2. From 1998 to 2000, Management Information Systems was offered to undergraduate students who majored in Management and Operational Management. The content of the course basic concepts of Management Information Systems, business applications and operational processing systems.
3. From 2001 to today, Management Information Systems has been offered to undergraduate students who majored in Management Information Systems in addition to being offered as a core class to students in other business majors.

Among some popular textbooks, translated versions of Information Systems Essentials by Steven Haag and Maeve Cummings, and Management Information Systems by Kenneth C. Laudon and Jane P. Laudon are the popular textbooks by American authors (Guangxi University of Technology, 2011). The new copies of these textbooks are available to students through Amazon.cn (a branch of Amazon.com in China) for about $6-$7 each.

Based on a brief survey of courses offered in business schools in China, all programs offer some MIS courses. The following table provides a sample of them.

MIS in Industry

Before the 1980s, all businesses in China were state owned. There were no legitimate private enterprises in the country. Not only did the government own the large steel mills, chemical plants, oil refineries, universities, hospitals and radio stations, but also the ice cream shop or the vegetable stand down the street. Just the idea of a market-driven free economy was considered outlandish or even derogatory. All business data was collected and recorded manually—if they were collected at all. It was a common practice that accounting offices kept two separate books: one was real and the other was fake.

Highly centralized government control created layers upon layers of bureaucracy, corruption, and terrible inefficiency. Only by the late 1980s, when the "opening-up" policy was introduced, did business management ideas and practices along with foreign investments start to pour into the country. Having to upgrade its business management practices to match with the business partners overseas, the government invited exports from all over the world and from all business disciplines to make recommendations. As a result, accounting roles, operational management, and management information systems were among the earlier intellectual imports.

Table 1. Sample MIS college course offerings in China.

The development of MIS in industry can be divided into five stages (Pan, 2008):

1. The time period before 1990, when DOS was the basic operating system and most common applications was simple accounting systems, such as payroll systems.
2. The 1990s, when local area networks were established and several simple applications, such as account payable/receivable, payroll, cost management, purchasing, and reporting were available. Corporations started to use MIS knowledge with local area network to manage their business.
3. The mid-1990s, when data was collected through accounting and business processes. Since then, database queries and accounting analysis have become part of Management Information Systems.
4. By the late 1990s, isolated corporate systems no longer met the need of networked global business. Comprehensive Enterprise Resources Planning systems (ERP) have been implemented to integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, CRM, and automated business processes with an integrated software application.
5. Since 2005, global competition was no longer limited to one firm versus another, but one vertical supply chain against another. The ability to efficiently allocate all possible resources throughout the entire vertical integrated supply chain became the wining ticket. Supply Chain Management and e-commerce management applications have been adopted. This is the fifth stage of MIS in industry in China.

With the advances of MIS in industry, more businesses are offering e-commerce services. By June 2010, the number of people who have shopped online increased to 142 million. Utility companies, such as telecommunications, electric, water and gas companies, are among the first group of businesses to provide online payment capabilities.

As businesses become ever more dependent on the stability and reliability of their information systems, information security has been identified as the most important and most common issue to face enterprise application systems. Among the most pressing information security issues, disaster recovery, business continuity, and protection of critical business assets are on the top of the chart (China Telecom presentation, 2009).

MIS in Society

Increasingly connected through the Internet and cell phone networks, people in China are enjoying the convenience and freedom of telecommunications that earlier generations never could have imagined. By the end of 2010, the number of Internet users reached 457 million, increasing 73.3 million compared to a year ago. Now Internet users are about 35 percent of the country's population. (See Figure 1.) It is projected that this number will increase to 52.7 percent by the end of 2013 (Xin, 2005).

Baidu is the leading search engine, with a 54.7 percent share of searches. Google takes 17.7 percent of the share, followed by Alibaba 8.7 percent, Yahoo 7.9 percent, and Sohu 7.9 percent. Most Interest users get online via home connections, with workplace and Internet cafés as second and third most common locations (see Figure 2) (Zhu, 2010).

 

Figure 1. Number of Internet users and respective percentage of the population.

 

 

Figure 2. Locations where Chinese users log on to the Internet.

 

Cell phones have surpassed computer e-mail, instant messaging, and landline telephones as the most preferable way of communicating at work or with friends. Comparing the rates of $0.16 per call minute to the rate of $0.02 per message, texting is very attractive to the Chinese population. Almost all cell phone owners, old or young, regularly send text messages to each other. It is estimated that a cell phone user in China sends, on average, 80 text messages per month. Texting is believed to be the fifth mass media after newspapers, radio broadcasting, television, and Internet. Taking advantage of the fact that texting to a group of people is well accepted in the society, many writers distribute and publish their short novels or poems through text messages (Li, 2009).

It is forecasted that close to 50 percent of the population will own a cell phone by the end of 2013 (CNNIC, 2010). Such high cell phone ownership has opened new ways for businesses to market their product. In recent years, assisted by location information systems (GIS), marketers are aggressively taking advantage of the high cell phone ownership to promote their product (Zhang, 2010). Along with the boom of social networking and data mining, it is likely that, in the future, targeted marking and mass customizing production systems incorporated with faster turn around time will bring MIS in China into its new territory.

Future of MIS in China

There is a vast potential for MIS development in China. Switching from the pre-1980s centralized planned economy to today's market-driven economy, every part of society is establishing its management information systems. From high-speed train management, airline ticketing systems to snail-mail postal services system, from power distribution to healthcare resource allocating systems, from disease reporting and control systems to land and forest management systems, they all need to be built from scratch. For example, only five years ago, China began transitioning from a cash-based society to a credit-based society. Along with this transition, individual credit history and the loan application market is just start to take shape. How to incorporate credit history into business decision making or marketing will be a great business opportunity in the next decade.

Another opportunity will be in the farming community, which is quite different from the U.S. version. Most of the 300 million farmers in China still work their small plots of land with hand tools. Needless to say, they often are unable to afford any computers or Internet services. How to bridge the digital divide and build the information system that they can benefit from will be an enormous task (Liang et al, 2009).

In conclusion, regardless of what the new frontier for MIS in China is, one thing is for certain—all new technology will need more educated people to develop, to implement, and to manage. The future success will depend on the capability of highly educated individuals to formulate their vision, identify the problem, take bold initiative, and lead the industry to become more productive and more efficient. In short, the future will demand more individuals that are better educated and better trained in the field of Management Information Systems.

References

Beijing Economic Research Institute. (2010). Introduction and course plan for China-UK Business Management Major.

Cai, Shuqin, Zhang, Zigang, & Zhang, Jinlong. (2001). A study of education and training in management information systems. Higher Engineering Education Research (in Chinese), China Academic Journal Electronic Publishing House, No. 4., p. 25.

Cash, James I., Bailey, Andrew D., & Whinston, Andrew B. (1977). A survey of techniques for auditing EDP-based accounting information systems. The Accounting Review, 52(4), October.

China Telecom Presentation. (2009). The strategy and implementation of management Information systems in telecommunication industry (in Chinese). Retrieved from http://wenku.baidu.com/view/2e0cc51aff00bed5b9f31dd2.html

CNNIC. (2010). Statistical report on Internet development in China. China Internet Network Information Center (CNNIC).

Guangxi University of Technology. (2011). Department of Management Information Systems course description.

Huang, W. Wei, K.K., & Watson, R. (2003). Management Information Systems (MIS): Background, core courses, research trends and major conference and journals ratings. Journal of Management Science in China, 6(6), December.

Jiangxi University. (2011). Business Management Distance Learning Course Schedule.

Li, Yushi (Boni). (2009). How the cell phone became the most important interactive communication medium in today's China. Technology in Society, 31, 53-55.

Liang, Yun, & Liu, BeiGang. (2009). Analysis on approaches to develop agriculture E-business in China (in Chinese). Journal of Huzhong Agriculture University (Social Science Edition), 83.

Pan, YongQuan. (2008). Business information management, Central University of Broadcasting and Television.

Power, Daniel. J. (2003). A brief history of Decision Support Systems. DSS Resources.com

Remin University. (2009). Introduction and course plan for Business Management Major (undergraduate).

Shenzhen University. (2011). Spring 2011 course plan for Business Administration major, College of Business Administration.

Xin, Renzhou. (2005). A steadfast policy of launching the industrialization with information. People's Daily (in Chinese), December 09.

Yan, Hui. (2005).Discussion of Information Management theory and trend in our country. Journal of Information Science (in Chinese), 23(6) June.

Zhang, Li. (2010). Annual report on the digital publishing industry in China: 2007-2008. Publication Resource Quarterly, 26, 51-58.

Zhu, Shun Yuan. (2010). The current development and new frontiers of management information system China Management Informationization (in Chinese). China Academic Journal Electronic Publishing House.

 

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