Information Systems Strategy

Keywords: The Strategic Grid — McFarlan & McKenney, Strategic alignment methodology, IS system Strategy, Business strategy alignment and IS/IT, Information Systems Strategy, Assignment Writing Service

Introduction

The purpose of this report is to purpose design and implement of information system strategy for RSE plc to improve its efficiency and competitiveness. The guidance in the report is enclosed for Chief Executive and Board of Directors on the benefits, design & acquisition of information systems.

Whittington (2014) discussed the three fundamental drivers which influence and shape the modern business are globalization, collaboration and knowledge management. Each of the drivers is enabled and enhanced through information and communications technologies (ICTs). Information has made it possible for the organizations to integrate their functions to achieve efficiency and competitiveness in the global marketplace (Clarke, 2015).

According to Grant, Hackney and Edgar (2014) enterprise information resources help the organization to reduce the response time and get benefit from new opportunities.  On the other hand, communication has enabled to reduce the cost, efficient processes integration and increased company outreach.

RSE plc Overview

Richard Shaw Enterprises (RSE) was established in 1994 and since then company has achieved tremendous growth. Moreover, number of staff employed by our organization has increased from 4 to 504, situated in four countries (Rome, Paris and Lagos, Nigeria) with head office located in the UK.

RSE plc has two main trading strand that overlap in certain areas: Business strand one involves the buying, selling and fitting of shop fixtures and fittings, including the supply of refurbished business machines and other business organizational equipment.

Strategic / Problem analysis

The strategic Analysis of the RSE operations shows that future expansion of the company business would only take place in the overseas market. However, marketing division has failed to target new customers and is below the performance standards because of out-dated marketing techniques and methods. The company structure is hierarchical with few responsibilities devolved to divisional heads. The company is profitable, but its profits are hit by the high level of cost associated with company operations (Krishnakumar, 2015).

RSE operations are computerized in certain areas but not in business operations. The lack of computerized systems has resulted in the minimum integration of the company processes. In addition, the company has limited usage and understanding of ICT within the business operations. For examples, sales and purchase of the company were computerized in January 2003 but computerized payroll system was installed in 1995. Therefore, company systems are very old as well as not integrated (Jafari, 2014).

Stair and Reynolds (2015) stated that company operational areas/functions do not have the benefit of ICT and still rely on old manual systems. For examples, RSE recruited a marketing consultant from a top London advertising firm. The initial improvement in the marketing operations widened the customer base of the organization on a global scale. However, lack of information technology systems failed to deliver full benefits for the organization. Richard Shaw believes the company should ‘Employee Newsletter’ to informed employees organization’s practices, procedures, and future direction.

Ward (2012) discussed that the review have highlighted that lack of information systems have resulted in problems in the human resource systems, lack of communication between international branches, poor dissemination of information, supply chain problems (distribution of material and goods between branch offices), problem of integration and linkage of systems as well as failure to exploit marketing opportunities and other business advantages (Stair and Reynolds, 2015).

Beynon-Davies (2013) stated that strategic IS requirements and review of the organization’s individual functional IS needs shows that there is range of problems associated with company operations. The marketing department have concerned with planning, promotion and sales of the product within existing and new product. The human resource system has improper staff records and there is an inconsistency in information among various departments.

There is need to remove Discrepancies of information flows need to be sorted out quickly to reduce data redundancy in the organization. The company needs new systems which perform basic human functions such as staff record, training and legal compliance (Targett, Grimshaw and Powell, 2013).

Moreover, there is need of systems which helps to forecast and maintain an adequate supply of the high-quality human resource. The lack of appropriate ICT has raised concerns for investigate the appropriateness of local area networks (LANs) and wide area networks (WANs) within the organizational boundaries of RSE plc (Krishnakumar, 2015).

Use of Tools / Frameworks

The Strategic Grid — McFarlan & McKenney

McFarlan and Mckenney 1983 proposed a strategic grid which is useful to assess the company use of IT systems. This is useful to assess whether IT is simply a support function or does it have strategic importance for the business. A company can be placed in one of the quadrants as shown in the diagram below.

The Strategic Grid for IT - McFarlan

Low current and future impact [Support system]

This shows that IT system have low/little relevance to company functions and i.e. simply support the existing processes.

Low current and high future impact [Turnaround]

Company believe that IT system have major impact for the future of the business and can be proved as turnaround. In such scenario, it plays an important role in the strategic planning for the business.

High Current impact and low future role [Factory]

In such scenario, It system have said to factory role because of company believe that It have importance for current operations but will not have any major implication for the future of the company. Therefore, organization usually focused on the maintenance of existing systems (Jafari, 2014).

High current and future impact [Strategic]

Latif (2014) analyzed that the company believes IT plays an important in the current and future development of IT and viewed as an important source of competitive advantage. IT is considered as part of the company business strategy to achieve the objectives of the business in order to effectively deliver the product and services. In such scenario, IT system strategy is linked to business strategy and is critical to the future of the company.

For RSE plc, IT has strategic importance in terms of future expansion of the business, to meet the human resource need of the organization, alignment and integration of the company divisions, staff scheduling and task changes, reporting structure as well as information on the strategic direction of the organization. The introduction of ICT to automate the sale function with regard to 50 sales agents will have major implication for the company (Stair and Reynolds, 2015).

Product Managers need information to plan and control the performances of specific products, product lines, and brands. At last, not least, company should effectively deploy it to achieve better return on marketing activities and target new customer and market overseas (Pendse, 2016).

Benefits of new ERP system to RSE

The operational benefit company will achieve is cost reduction. The lack of integration of the process and poor dissemination of information has increased business cost. IT will eliminate the activities repetition and mistakes which will likely to increase profits. The company divisions will be integrated, better reporting, work scheduling, and staff communication which is likely to increase efficiency and reduce response time. The strategic benefit expected from the business information system improved performance of the marketing department (Clarke, 2012).

The availability of information and integration of the process will help to target new customers in the overseas market. IT systems will improve the communication and employee will have information on organization’s practices, procedures and future direction. The new system will resolve the problems associated with marketing planning and promotion. Collateral reporting systems will support the efforts of marketing managers to control the efficiency and effectiveness of the selling and distribution of products and services (Stair and Reynolds, 2015).

Gelinas and Dull (2015) argued that IT systems are likely improving the Human resource function through staffing, training as well as legal compliance. Moreover, ICT systems will align and integrate the function of the company and company will get through both of local area networks (LANs) and wide area networks (WANs). The availability of the information will help the Product managers need information to plan and control the performances of specific products, product lines, and brands as well as generate income and expense reports for management.

At last, not least, the availability of information will help the management to decide which markets to enter and take advantage from potential market opportunity. The benefit of the ERP systems involves reduces lead and cycle time, increase customer satisfaction, Fast communication, reduces of quality and timely decision making (V.S.Bagad, 2016).

Proposed Strategy

Strategic alignment methodology

According to Galliers and Leidner (2014), strategic alignment methodology is an important tool to integrate the working business systems to improve productivity as well as the alignment of business strategy and information system. The purpose strategic information system alignment will help the RSE plc to implement the information system and integrate with business strategy. The alignment methodology combines top-down planning as well as bottom-up implementation. The alignment method reviews the business processes which are derived from the goals and objectives of the organization.

In the business, alignment method data is combined into databases through reviewing business processes which help to describe overall architecture as well as the design of the system. The strategic planning is completely different from the operational planning as it overviews the whole system and future direction. The approach is much integrated because it conducts top down business analysis and bottom-up implementation (Targett, Grimshaw and Powell, 2013).

According to Dutot, Bergeron and Raymond (2014), strategic information system planning involves a process of identifying a ‘portfolio of applications’ which is useful to execute the business plans and achieve business goals. The diagram below shows the process involved in the development of strategy through Strategic alignment.

IS system Strategy and RSE

For RSE plc, the starting stage involves analysis of the key functional area. Company has a strategic review which is useful to provide data to build database. Company functional model is hierarchy and it needs to decide whether it wants to continue its operation or there might propose changes. The next stage is identification of the information requirement and further analysis of marketing, human resources and HR department can help to determine the information requirement. The key area highlight by the management is integration of different functional areas (Aversano, Grasso and Tortorella, 2013).

Aligning IT/IS with Business Strategy

Targett, Grimshaw and Powell (2015) debated that the collection and combination of information will help to build database and consequently decide on the architecture of the system. From the early analysis it is evident that IT has strategic importance for the organization and i.e. an ‘Enterprise Resource Planning’ system which function/modules for marketing and sales, accounts and finance, HRM and supply chain is likely to address the problems for RSE plc and increase the competitiveness and performance.

Business strategy alignment and IS/IT

Alignment is considered as capacity to show the relationship between the IT system and financial measure for performance. The alignment model proposed by the Henderson and Venkatraman is widely used model as it helps to integrate internal and external information. The diagram below shows the internal and external alignment of business processes (Galliers and Currie, 2016).

The alignment of the business strategy and IT system is fundamental. The objectives of the RSE plc are to use IT to improve its efficiency and competitiveness. Therefore, alignment of the internal business process with external business helped to highlight the information requirement of the company.

Strategic Information Systems Alignment: Alignment of IS/IT

For example, the marketing department needs information which helps to target new customer in target market. Moreover, once these customer achieved company should have Information technology in place to process the order in efficient manner. Similarly, HR department needs effectively planning to meet the internal demand and maintain efficient supply of the human resource. At last, not least, the automation and integration of the system needs to integrate the internal and external information for the employees and automated newsletter (Wong et al., 2015).

No

Stage

Actions

1

Scope and Goals

(Top Down)

Project Scope

The information system will increase the efficiency and competitiveness through cost reduction, process integration and improvement and information availability.

Project goals

  • To increase efficiency and productivity of marketing , human resource and all other departments
  • To integrate and standardized the processes for better communication, schedules, reporting and availability of information for ‘The Newsletter’
  • The availability of information  from all process for effective and timely decision making

2

Strategic information system planning

(bottom up)

Business Process and function assessment

  • Current problems and business model
  • Strategic information need assessment
  • Combine information and define architecture

3

Business alignment IS/ITPresent and future requirement

  • Effectives of business model and future requirement
  • Assessment of current application and requirement of future applications
  • Features of ‘Enterprise Resource Planning’

4

Information Technology

(Inside Out)

  • Analyzing IT trends
  • Sales force are fitted out with laptop computers, hand-held PCs, or even pen-based tablet computers
  • World Wide Web (Portal) Webpage
  • E-commerce opportunities
  • Supply chain integration
  • Intranet (LAN and WAN)

5

Organizational plan
  • Change management
  • Human Resource Plan (project Team)

Implementation

The implementation stage is based on two phases which are ‘system design and development’ and ‘system changeover’. The clear business and senior management support is most crucial element in successful implementation of the IS strategy. The starting point would be collection of information and built the database through deploying the top-down approach to strategic planning. The alignment of the business strategy, corporate strategy and information will help to design the system which fulfills the operational and strategic needs of the company (Krishnakumar, 2015).

Enterprise resource planning (ERP)

In-house development vs. Purchase

Lee, Barta and Juliff (2016) evaluated that the two options available for the company involve in-house development or outsource the development.  Company can develop the system in-house which will allow greater flexibility and systems can be customized according to specific requirement of the company. However, in house development involves high cost, time and possible risk of poor development. The other option would be purchase of system based on the requirement of the organization. This approach takes minimum time and cost is fixed but the module might fully offer the requirement of the company information need (Krishnakumar, 2015).

System Changeover

Shelly and Rosenblatt (2015) argued that system changeover have significant role in success implementation of The ERP system. The new system embarks greater changes for the organization. The new system will require staff training as well as reliability of the systems needs to determine. The different changeover methods available for RSE are direct changeover, pilot changeover, phase changeover or parallel changeover. RSE can employ the method based on the quality, staff acceptance, training and reliability of the system (Grant, Hackney and Edgar, 2016).

Conclusion and Recommendations

RSE is a profit company with global operations. Company has achieved tremendous growth over the years. However, lack of information systems and information technology has directly impact the performance of the company. The lack of information has serious damage the company ability to expand oversea and achieve growth. The cost of duplication of tasks and manual activities has increased the cost of the operations and reduce profitability.

Furthermore, company has problem of communication, scheduling, collaboration and integration of process. Therefore, company needs a IS system strategy to address the various issue and improve competitiveness and efficiency of the process. The benefits achieved from the system will support the growth of the company overseas, improve performance and productivity as well as fulfill the information need of the organization.

Recommendations

  • The IS system design and deployment should be owned by senior management of the company. Strategic planning and business alignment processes should be dealt with focus to determine the actual IT needs of organization.
  • Information technology systems should be purchased based on the need of department rather making bulk purchase. Marketing, sales and supply-chain should be given PDA and tablets.
  • Company should purchase ERP system available in the market rather development. This will ensure fixed cost and minimum time to implement the business information system
  • Company should make effective use of technology (LAN and WAN) through development of intranet and portal
  • Company should implement new system through phase changeover. This will ensure the minimum disruption to the system and verify the integrity of the system.

 

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