Keywords: Strategic development and Implementation Process, McFarlan and Mckenney IT strategic grid, Architecture development method (ADM), Evaluation of System implementation Process, Post implementation Review, Proposition for future IS strategy, Strategic Alignment Methodology, Research report, Information system assignment writing services
In this report, retrospective information system (IS) implementation at Sainsbury will be examined. Moreover, the implementation process will be analysed using the TOGAF framework. In addition, the strategic impact and benefits of the IS systems will be examined through interviews with internal stakeholders. Furthermore, a proposition for future strategy, recommendation for system improvement as well as future research direction will be discussed.
Davenport (2014) stated that in today’s world, the competitive business environment has put substantial pressure on the organisations to make their strategic, operational as well as tactical processes effective and efficient for better performance and customer satisfaction. An information system (IS) is a critical component which helps the business to improve performance, increased productivity and gain information for timely decision-making.
Therefore, organisation implement IS systems to increase the efficiency of the process of the business processes and delivers strategic success for the business (Willcocks, 2016).
In 2009, Sainsbury announced an agreement with IBM to transform it supply chain network. The purpose of the system was to enhance increase efficiency and productivity through transformed supply chain network and enhance customer’s experience (Galliers & Leidner, 2014).
Sainsbury started its operation in 1869 and head office is based in based London. It is third largest supermarkets in the UK which consist of 707 convenience stores, 597 supermarkets and Sainsbury bank. Company market share stands at 18% and sells more than 30,000 products which include grocery and non-grocery items. Company net revenues in 2015 are £26,122 million and employ more than 160,000 employees. The range of products sold by the company involves food items, home goods, cookware, online store and, in general, mechanising.
The company implemented its first information system (IS) back in 1989. The systems were implemented using soft methods which had a project cost of $73 million. The evaluation of the systems after five of implementation showed that it achieves benefits of $64 and its strategy evolved overtime (J Sainsbury plc, 2015).
However, since then the company has not made significant changes to IT system but implement upgrades. The reason behind such implementation was writes of £260 million because of the IT trouble in the supply. The supply chain network transformation is one of the biggest change since first IS implementation. IBM managed the migration, implementation and maintenance of the system at Sainsbury (Zentes et al., 2013; Chaffey et al., 2016)
In this section, the focus is on the technological perspective rather technical specification of the system.
Sainsbury’s had contracted with IBM in order to transform its supply chain network through developing and implementing new information systems. The IS system implementation was involved replacement of the existing platform and installed new system which was provided by ‘Wesupply and visibility application’ which help to develop a platform for interaction with more than 4000 suppliers. The new systems objective was to improve the collaboration with supplier, better product availability to the customers as well as improve intelligence in supply chain (Zentes et al., 2014, p.356).
Woodie (2015) elaborated that Sainsbury with products around 30,000 the new system enable the real-time collaboration through streamline of information by provided greater visibility of the supply chain processes. The significant changes made were installation of the electronic data interchange (EDI) value added network at the supplier premises which share data and information with company warehouse. The collaboration with supplier and visibility of the stock helped to develop a successful transactional platform (Perry, 2016).
The new platform enabled the company to eliminate the multiple solutions usages to communicate with the supplier. The IS system enabled to integrate the back-office, exchange information and increased the speed of communication, stream and exchange the orders and consolidation of the finance functions. The new system runs on IBM e-business hosting infrastructure. The usage of EDI has enabled the integration of each component of the supply chain (Browning, 2014).
Kobayashi-Hillary (2009) discussed that the new system removed the electronically interaction complexity with helped to make a clear and timely decision based on the streamline and visible processes. New systems provided web portal which enable the online interface as well as it integrates the CRM software of the company.
At last, not, new system provided the shipment information, management information system (MIS) as well as detail on the Key performance indicators for an order to cash cycle.
Zsidisin & Ritchie (2015) argued that the strategic analysis of the Sainsbury systems highlighted a number of problems with the supply chain of the organisation. The performance of the supply was radically poor as numbers of products were out of stock, problems with the stock order, excessive inventory wastage as well as multiple systems to communicate with various suppliers. The lack of consolidation of the systems results minimum integration of the processes and company had limited usage and understanding of the existing system of the company. The supply chain function of the company did not fully benefit from the ICT system (Kersten, Blecker, & Ringle, 2016).
The poor communication with communication with the supplier, the problem of the process and function integration as well as weak information dissemination of the information has resulted in a financial loss as well as poor customer satisfaction. Therefore, Sainsbury needs to remove discrepancies in the information flow in order to remove the data redundancy to improve processes and coordination with the supplier. The lack of the consolidated system, poor local area network (LANs), as well as no wide-area network (WANs), has raised numerous communication and coordination problem for the Sainsbury (Kersten, Blecker, & Ringle, 2016).
McFarlan and Mckenney (1983) proposed the strategic grid to assess the IS needs of the organisation which helps the organisation to understand whether IT is basic support function of the company or does it have strategic important for the company. The diagram below show the four areas to assess the It proposed.
In the light of the support systems, Information system (IS) has low importance and little relevance to the company. Therefore, support the existing processes and does not add value to the business. Nevertheless, for Sainsbury IT important is significant rather been a support function.
IS having an impact on the existing system of the organisation but do not significant importance. That is why, organisation focus on the maintenance and upgrading the system. However, It system have long-term importance for the company and significant impact on the business in the future (Child, 2015).
Organisation believes that IS systems have significant importance and existing application could be a vital source of the future success of the business. The existing plays an important role in the strategic planning of the business. Nevertheless, the existing systems of Sainsbury are out-dated and do not have future value.
Information Systems (IS) is an important part of the business strategy of the company and the current development has important for the future of the organisation. IS would enable the business to achieve its business and goals as well as it important for profitability and customer satisfaction. Therefore, IS systems link the business strategy with objectives and achieve future of the business (Hirschheim, Heinzl, & Dibbern, 2015).
For Sainsbury, IS has strategic important as it would help and enable the Sainsbury to streamline its supply china for current and future business needs, integrate and consolidate the supplier database as well as effective dissemination of the information. The introduction of the new systems for supply chain would allow to effectively sharing information with suppliers, timely decision making and ordering, plan and control on the inventory and product lines which will improve processes and functions as well as increase customer satisfaction (Willcocks, 2015).
Bernard (2012) explained that enterprise architecture (EA) involves framework, principles, reference model and standards. It encloses the representations which are useful to produced management requirement. There are many components of the enterprise architecture (EA) but information systems (IS) which have a critical role in today enterprise. The process architecture defines the integration mechanism and information architecture examines the data resources of the organisation. TOGAF architecture development method (ADM) is useful to meet the information system needs of the enterprises (Tao, Luo, Chen, Wang, & Ni, 2015).
|Aims and Goals||Input|
|1. Preliminary and Framework||· Business Case for new supply chain system|
· Aims, Goals and strategic drivers
· Vision and scope for Architecture
|· Sainsbury need for supply chain improvement to achieve objectives of company|
· Financial and time loss
· Current process and system
· Need to revamp supply for real- time inventory and customer satisfaction
· Current supply chain inefficiencies and loss from outsourcing
|· System requirement and architecture (Real-time collaboration and information exchange)|
· Partnership for IT technical knowledge and support
· Project management (IBM contract)
|2. Description of Baseline of current system||· Evaluation of the characteristic and details||· Failed outsource and loss in supply chain|
· Multiple platform to deal vendor
|· Detail of functionality of current system|
· Description of constraints (Poor communication, stock-out, lack of customer satisfaction)
· Internal constraints lack of coordination and inefficient processes
|3. Target architecture (Vision)||· Target system architecture||· Business need and its alignment with architecture design|
· Supplier problems and lack of interest
· The process of business which need integration an requirement improvement
|· Full description of system and requirement (EDI and real-time data processing required)|
· Description of application and services selected
· Description of the selected application and services (Wesupply application and IBM hosting) for quick implementation
· Detail on how system implement (Gradually deployed in different regions)
· Detail on how proposal architecture meet the business objectives
· Aspect of strategic implementation (supplier and employee management)
· Conducting a gap analysis (architecture proposal feature and organisation needs)
|4. Opportunities and solution||· Change management|
· Project management
|· Analysis of the architecture (solutions) and their impact on business|
· Budgetary and Gap evaluation
|· Defining the Work packages and how coordination will achieved with IBM|
· Detail of the solutions and program and how they will be achieved.
· Cost/benefit analysis
|5.0 Migration and implementation (outsource to IBM)||· Planned with IBM project Team|
· Outline implementation phase and priority
|· Discuss current architecture|
· Functions and solutions evaluated
· Alignment of the solution and business goals
· Organisation, product and standard information
|· Complete outline of project management|
· Migration process and resources allocation
· Testing of the system, cultural problem, cost and time management discussed and plan develop to overcome such in collaboration with supplier
· Focal point (for coordination)
· Monitoring risk and issues
(outsource with IBM)
|· Agreeing on procedures and protocol for on-going maintenance||· Technological and system updates|
· System upgrades
· Business environment and regulatory updates
|· Monitor the on-going maintenance|
Harrison (2016) discussed that ADM specify the methodology to build the foundation architecture which is a strong building block for information system environment. TOGAF link the architecture and solution through encompassing the business environment, target architecture, technology standard as well as providing direction for the product and services to align and achieve the computing strategies.
Products represent hardware and software which can deploy and company can take advantage from the system solutions. For example, Sainsbury decided to use the ‘Wesupply’ application in collaboration with IM hosting services to deliver the real-time experience. The system architecture represents range of solution among the various domains and stakeholders (Ross, 2013).
Moreover, system solutions are implemented on common architecture to meet common requirement and capabilities. Sainsbury common requirement were interaction of the supplier and maintain the real-time stock level. Sainsbury uses the enterprises framework to develop and deliver the system which meets the requirement of all stakeholders and with help of TOGAF and ADM it has managed to implement company specific EA (Desfray & Raymond, 2014).
Research methodology is concerned with techniques used to collect, analyse and evaluate data. Moreover, successful of the research design depend upon the design of the research. In this report, a deductive approach is used to study the strategic impact of the new supply chain system at Sainsbury. Moreover, exploratory research is used to study the situation. The benefit of the exploratory research is that when no previous exist, it is useful to study the phenomena as well as it is helpful to conduct further research (Neelankavil, 2015).
In addition, a qualitative approach is used to understand the strategic impact at Sainsbury. The advantage of the qualitative research the flexibility it offers and research process can be adjusted during the course of research. Moreover, case study approach will be an approach which allows generalizing the results and presenting the find in the single case (Creswell, 2013).
Saunders, Lewis, & Thornhill (2009) stated that the data collect for this report is qualitative data based on the semi-structured interviews of the two employees at Sainsbury distribution centre in Waltham abbey, Essex. The interview is based on five questions only because of limitation in terms of the size of this report.
The ethical consideration has been followed strictly and no personal information of respondent will be disclosed. At last, not least, employees were informed and consent was asked before the interviews. The respondent of the survey was supply chain manager (SCM) and Merchandiser/Customer service assistant (CSA) who been working with company since 2005.
This question was asked to supply chain manager because coordination with supplier usually managed at a higher level. The reason behind this question was to determine whether the consolidations of the supplier on a single platform have helped to increase the productivity and make processes more effective and efficient. The partnership with suppliers requires a greater degree of coordination through communication and information sharing. The long-term supplier partnership is useful to improve strategic and operational capabilities and range of performance metrics are cost, speed, delivery as well as quality (Davenport, 2013).
The SCM agreed that new system has effectively increased the speed of the delivery. The timely information sharing via real-time system has helped to update the stock which reduce the cost of delivery as well as eliminated stock-out. In addition, SCM mentioned that communication and information sharing has increased the quality of the product and on time delivery. In addition, EDI has helped in joint problem solving and decision making (Prajogo & Olhager, 2012).
Customer satisfaction is an important factor as it has an economic impact for the business. The improve customer relationship means fewer customer complaints, better product availability as well as delivering product based on the need of the customer. In response to the question, CSA agreed since the implementation of the new system the product availability and quality has improved and there are less stock-out complaints from the customers. The new system has enabled the company to quickly respond to the need of the customers and meet the customer expectation.
Moreover, SCM responded that new system has enabled to timely place order with suppliers which has helped to deliver the product on time to the customer. Furthermore, SCM agreed that it has improved the processes, changed the work culture as well as helped to increase the sale of the goods (Fawcett & Fawcett, 2013).
The improve processes helped the businesses to adopt new approaches which reduce cycle time, small batch size, new technology and equipment, improve processes capability and better staff management. In response to the question, CSA agreed that the ordering size has reduced to economic order quantity (EOQ); the order process has improved based on hand-held to directly share the information with the supplier and maintain reasonable stock level. The reduction of the waste in the internal supply chain has reduced cost and time to order as well as eliminated the risk losing customer.
Moreover, in response to the question SCM agreed that new system has helped to eliminate the waiting time, reduce inventory wastage, reduce processing time and help to maintain right stock level. Therefore, organisation implement IS systems to increase the efficiency of the process of the business processes and delivers strategic success for the business (Ross, 2013).
The information sharing is critical in the supply chain because it help to respond quickly to customer changing needs and develop a long-term relationship. Moreover, it changes the ways things done i.e. it impact the organisational culture. In respond to the question, CSA replied that the new processes have given more time to carry the extra activities as well as the ordering system does not require human input. With hand-held devices, system place orders an order with suppliers if there is a need. The information shared is accurate and real-time which has helped to make timely decisions.
SCM replied that quality of information with the new system has improved with minimum system failure or downtime. The credibility, timing, relevancy and accuracy have changed the working practices and more time is devoted to responding to changing customer needs rather struggling with ordering system. The team has become much independent and fewer people required performing the same task (Child, 2015).
The supply chain performance is measured on three perspectives which are the management of the resources (efficiency), flexibility (respond to customer and uncertainty as well as output (customer experience and satisfaction). This question was asked to SCM only and in respond, SCM agreed that new systems have delivered a number of benefits such integration of processes, cost effectiveness, balance inventory level, delivery efficiency as well as reduce the holding cost.
In addition, overall effectiveness SCM agreed that new systems have increased the flexibility in order to respond to customer need and manage the uncertain times, internal and external processes integration has improved (share risk, resources and knowledge) as well as customer need and wants are addressed in a timely manner (Janvier-James & Mbang, 2012).
The data analysis showed that transformation of the supply chain has increased the efficiency and effectiveness of the Sainsbury supply chain. The improvements in a number of areas such reduce cost; the speed of delivery, flexible as well as responsiveness has improved the performance of the company. The SCM and CSA both agreed that new system has increased operational efficiency by real-time system.
The quality of the information and joint problem solving with the supplier has changed the practices in the supply chain. The economic benefit is less inventory wastage, better sales, self-motivated staff, better planning and minimum stock-outs. Moreover, the operational efficiencies achieved a speed of delivery, easy ordering and manage the uncertainty through information sharing with the customer.
The culture factor is staffs have more time to carry out extra task rather struggling with stock level. The information sharing has reduced errors and waste is reduced.
The employees expressed that the new supply chain systems has offered operational efficiency and effectively in Sainsbury processes and functions. The old system had poor processes integration ad dissemination of information which has resulted in poor decision making and increased cost for the business. However, employees stated that IT has eliminated the activity repetition and mistakes will have resulted in increase efficiency. The timely information sharing of the information with a supplier over the EDI has improved the decision-making speed and effectiveness. The EDI has improved the order placing, reporting and communication to reduce the order and holding cost.
The new system has allowed responding the customer needs in an efficient manner and there is significant reduction is stock out. The new supply chain software and tools have increased the supplier mobility through providing better insight on the procedures, practices as well as future direction of the company.
The new software’s and EDI has aligned as well as integrate the function and processes of the company and this has resulted in the availability of the better product installation in terms of order and availability. The overall expected benefit achieved is improved performance and reduce cost based on the reduced lead and cycle time, fast communication, reduction of the non-value added activities and integrated decision making.
Organisation is defined based on its various parameters such as borders (organisation relationship with stakeholders, structure and power (mode of coordination) as well as process of communication (Child, 2015).
The response has highlighted that new supply chain system has helped to reduce the command of authority. The number of improvement includes better communication, improved coordination as well as the transfer of the decision-making power at the lower level of the hierarchy.
Therefore, with increase decentralization based on the communication and technology has improved the decision-making and standardization of processes. The information systems have changed relationship and nature of the work as work has become more intellectual rather physical.
The flatter organisation structure facilitates the speed of the communication which allows the quick exchange of information as well as coordination between the employees, suppliers and customers. The information exchange has enabled the employees to do the participative and improved decision making. For example, the employee agreed that sales linked to stock trigger order processes and linkage with suppliers allow determining the time related to product and understand product problems.
The automation of the processes has improved the transaction processing and reduces the cumbersome papers for the employees which have given more time to the employee to carry out the other activities. Therefore, supply chain transformation has changed the processes and structure change at Sainsbury.
Organisational culture is based on the shared values and belief which shape the structure and behaviour of the organisation. The new system has made the organisational culture more informational and the role of the employees has increased. The range of benefits which has been identified from the interviews that it has changes the working practices and processes of the organisation.
For example, non-management staff is directly involved in the processes, functions and decision-making. The internal and external communication barriers have been removed and employees have responsible and autonomy. The positive impact is employees seems to more motivate and committed with technology usage.
The culture factor is staffs have more time to carry out extra task rather struggling with stock level. The information sharing has reduced errors and waste. The senior management reported that they have better information and product knowledge and based efficient decision which has reduced the need to extensive approval hierarchy. The new working practices have changed the way operations are conducted and transactions are processed.
The data analysis has highlighted that it has reduced the inventory wastage. The effective ordering system and tracing of the products have helped to reduce the delivery and holding cost. Moreover, understanding and responding to customer need has helped to stock the products which are required by the customer which has increased the sales of the company. The system reports have helped the managed to understand the product performance and stock items which are good selling lines. The optimisation of the ordering processes has improved processes and reduces the wages as well as employees can perform the additional task in same time. The financial impact is increased revenues, reduced cost and improved market share.
The time saving in terms of conducting a transaction and producing reports has increased the efficiency of the employee and processes. The timely decision and information increased the transparency of the business which means non-value added activities has been identified by the business. The greater flexibility enables the manager to save time and cost while analysing the products and their sales trends.
The improved relationship with the supplier has helped to increase the quality of the product. The increased reliability of the processes has given customer, employees as well as supplier confidence in the system which has resulted in increased revenues and productivity for the Sainsbury. The cost of information in terms of acquiring has reduced.
Sainsbury has managed to reduce the transaction cost based on activities coordination, order processing, inventory availability, inventory tracking and better employee productivity.
To summarize, supply chain transformation has radically transformed the processes and functions at Sainsbury. The communication and coordination with suppliers have added value to the product and product quality and availability has enhanced. Customer needs can be effectively respondent with high quality and timely availability of the product. The communication has helped to develop a stronger relationship with the supplier as well as increased the efficiency of the supply chain processes and functions.
The organisation culture has become flatter as well as employee motivation and satisfaction has improved. The new system has helped to eliminate the waiting time, reduce inventory wastage, reduce processing time and help to maintain right stock level. The timely decision making has offered better control of the operations.
The purpose of this post implementation review is to analyse and evaluate the implementation of the new supply chain system at Sainsbury plc. The scope of post implementation review includes accessing the project communication, technical specification and implementation of the systems. The post implementation review is managed through reviewing available documents and no survey or questionnaire is conducted (Limaye, 2009, p.174).
|Post implementation Types|
Area of evaluation
|1. Vision and business Case||System achieved desire outcome and deliver benefit|
|2. Architecture and functionality||Design and deliver right package to fulfil customer needs|
|3. Performance and Capacity of system||How capabilities are developed and changes managed|
|4. Risk and Security||Security plan developed risk managed|
|5. Cost and schedule||Project deliver within budget and on time|
|6. Process improvement||Benefit achieved and user satisfied|
Key: √ = Applicable and satisfactory; X= Further review needed
The transformation of the supply chain has proven to a successful experience for the company. After the failure of outsourcing and moving IT processes in-house has helped to streamline its supply chain. The new system has delivered economic benefits, operational efficiency as well as changed the working culture of the company. The development of system architecture has delivered the IT package which helps the company to achieve its objectives.
The collaboration with IBM has resulted in the quick implementation of the systems. The strategic impact of the systems is significant as it has increased the flexibility and responsive of the company as well as integrated internal and external processes. The data analysis and reflections have revealed some important recommendations.
Sainsbury needs to invest in physical technologies especially integration among the complex networks of cloud computing. Moreover, with changing social trend social technologies is imperative for the business. The network of the suitable business model, appropriate technology (web 2.0, cloud computing) and alignment of business strategy could help to exploit and utilize capabilities (Hirschheim, Heinzl, & Dibbern, 2014).
This will help to innovate and deliver the solution which meets the ICT needs of the business. One of the critical areas is knowledge management which involve creating, storing and sharing information which help to identify the problems, tap new business as well as help to a develop solution which increased the performance of the business. The technology based growth is rapid for the companies who use cloud computing and internet based IT infrastructures (Kersten, Blecker, & Ringle, 2012).
Strategic alignment methodology is an important tool which helps the business to integrate information systems with business strategy. It combines both bottom-up and top-down planning approach which involves reviewing the business processes and aligning with the objectives of the company. The strategic planning process involves identification and building an ‘applications portfolio’ which is useful to manage and execute the business plan and goals to achieve business strategy (Dutot, Bergeron, & Raymond, 2014).
For Sainsbury, the first stage would involve analysis of the key functional areas and processes which will allow the building of the database and providing the functional hierarchy to review the need for the change. The next important step is identification and evaluation of the business segment to determine the information requirement of the business.
This would enable the business to identify the management which areas need integration, alignment and a new system to increase performance and increase efficiency. The benefit of the database is that it will provide the information that would allow to “architecture of the system” (Aversano, Grasso, & Tortorella, 2013).
The Information system and business strategy alignment model is useful to integrate the internal and external information. The objective of the Sainsbury system is to increase efficiency and effectiveness of the processes which involve aligning the internal business information with the external business environment. For example, the company can effectively integrate the supply chain with e-commerce needs of the business.
Therefore, the integration of the business, processes and functions, as well as internal and external information, would allow better decision making and improve the performance of the business (Lee, Barta, & Juliff, 2013). The table below summarizes the IT and business strategy alignment at Sainsbury.
|Business goals and objectives|
· To increase efficiency of the marketing and HR department
· To standard and integrate the processes for communication, reporting and scheduling
|Ensure information available from all processes and segment needs assessed|
|Strategic planning and processes evaluation|
|Identification of key process and functions|
Defining current problem
IT system and information assessment
|Combining the business information and defining system architecture.|
|IS and Business strategy alignment||Evaluation of the existing business model and future IS needs of the business||Assessment of the current application and its strategic value for the business.|
|Information systems||Conducting analysis of the market trends||For example|
· E-commerce opportunities
· Cloud computing
· social technologies
The future research should try to examine the relationship between the new supply chain systems and supplier integration approach. Moreover, the changeover process and its successful factors can analyse. The supplier relationship and customer satisfaction can be evaluated after the implementation of the systems. The alignment of the supply chain, lean practices and their impact on the performance of the company can be analysed and evaluated.
The future could involve in-depth application and evaluation of the system development at Sainsbury and proposed a customised framework adapted from TOGAF for system development in other areas of the company. At last, not least, it can be analysed what are success factors to implement the new IT system in retail industry.
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