Intelligent Exploitation in Hazendal Ltd - Case Study Example

INTELLIGENT EXPLOITATION Introduction The limitations in the organizational ability to learn and apply the knowledge from the information technology investments need to be eliminated to ensure their long-term sustainability (Alawi and Leidner, 2001). This paper reviews the implementation of an integrated information management system for a wine production industry. The context of the discussion is the analysis of the entire operational process in a leading wine producing and marketing company. Hazendal (Pty) Ltd. is a global leader in the production of wide range of wines from exclusive premium products to large volumes of small canned ones. The major business challenge that Hazendal encounters is in the effective management of its complex wine production operations which includes scheduling the harvest of grapes, process management of wine production and marketing management of the final product. In spite of the huge volume of sales undertaken by Hazendal, the current data and information management systems in the organization is very primitive. It consisted of distributed databases of operations, non-inclusion of IT based management for variety of activities like grape allocation, sales data that includes the information on product, customer and region/country. At the same time, the sales invoice was issued separately using professional accounting software. Thus the fragmented style of information management led to high levels of operational inefficiency, extended delays in information transmission and inconsistency in sales and inventory reports. Besides, the company constantly conducts extensive outdoor customer retention and relationship building programs, which was very essential for the preparation of effective marketing plan. Thus to integrate its operation and to have increased efficiency and integrated operations across all departments, Hazendal Management decided to implement a custom designed information management software. It was expected that successful implementation of such an enterprise wide software would help to integrate the operations spanning from grape procurement to final bottled product (Berk et al, 1998). Hence, a systematic and well-structured approach to understand and improve the knowledge base of the organization need to be designed and implemented (Balasubramaniam et al, 2000). The essay presented here reviews two separate project phases in connection with the information management project at Hazendal. Phase I is related to the design and implementation of the vineyards management system for Hazendal and the Phase II draws the attention towards the barriers to its intelligent exploitation. Intelligent Exploitation Theory: Frameworks and Literature Review The term "Intelligent Exploitation" is coined to explain the inadequacies observed in extracting the full potential of information technology investments that have been made in the organizations (Holtham, 2008). It is observed that huge investments made by the organizations have not resulted in a significant improvement on their business or organizational management practices (Clemons et al, 1990). Also, all the earlier initiatives made across the world to improve and upgrade the technology didn't place the knowledge and information in the centre stage of all the activities (Brynjolfsson, 1991). Thus the advantages that the organizations could claim to possess towards the preparation of their growth strategies were also very insignificant. Implementations of IT tools have helped the organizations to create rich repositories of in-house data, which are not properly used for their own strategic advantage (Davern and Kauffman, 2000). In the present day circumstances the organizations need to be elevated to the status of creators of knowledge and thus transforming the organizations as a learning system (Dos Santos et al, 2000). But, contrary to the expectations IT investments were not able to justify the creation of specific strength within the organization to address the objectives of equipping the group to grow as stated earlier (Rivard et al, 2006). Several improvements and modifications in the managerial structure could also be expected as the organization turns to operate on knowledge and information created from within (Madhoushi and Shahsavand, 2005 ; Drucker, 1988). PHASE 1 -The design of the vineyard management software The project on software development for vineyard management software was expected to complete in 6 months. After several rounds of consultation, the project on software development was awarded to a Singapore based organization on the reasons of very low cost for development. The software development team would make routine visits from Singapore to Cape Town where Hazendal Company is located. The initial meeting on the project was held during early January 2007 when the project manager and the system architect visited Cape Town to discuss issues on costs , future capabilities required and project time limit. After successful negotiations, fifty percent of the total project cost was transferred as part of contractual obligation. The next round of discussions, to assess the software capability and collect information on the processes, were with individual department managers like wine yard manager, cellar assistant, sales manager, financial controller, general manager and the accountant. But in spite of the extensive exercises undertaken, the design of software system and its implementation failed due to various reasons. Information Barriers and Organizational Bottlenecks Absence of proper communication transfer and coordination between the various members involved in the consultation was the prime reason for the failure of project. Also, lack of abilities and interest on the part of project manager with the Hazendal created the confusion in the entire episode. This led to chaotic situation in the meeting without any productive outcomes. The participants were unprepared and poor representation of senior personal due their preoccupation with assigned tasks resulted in prolonged meeting sessions. Also, a proper in-house discussion on the potential benefits on the implementation of the project like improved work efficiency and enhanced performance was not conducted. This made all the staff members to view the entire initiative without any keen interest. The major resistance was from experienced and old generation employees who did not feel a significant benefit from implementing efficient information management systems. Also, the sales team, who were very skeptical to transfer the client information, also had their own reservations on sharing the data. Another concern the staff members had was the implementation of such a huge software environment would add their existing volume of work with entering of huge data relating to the operations. Thus much expected software development project came to a very disappointing end without even developing a preliminary software for the company operations. The ignorance and inability on the part of management was the root cause for such a situation. The software development company chosen by them was later found to have had no experience in handling the software project relating too wine industry. Phase II - Elimination of the barriers: The intelligent exploitation frame work that would be very effective for elimination of barriers in the case considered here as explained as follows (Holtham, 2008): ICT strategy: Establishing the proper communication channels by the management to all the staff of the organization regarding the benefit of the project to the organization and the self, the expected contributions and the importance of deadlines could have given better results. Also, it must be realized that even in the implementation of sophisticated multimedia communication systems, the absence of a planned approach have not yield the expected returns (Francik et al, 1991). Effective Systems: Hazendal must have undertaken an extensive comparative research between the available ready to use software with the customized ones before arriving at the final decision. A off-the -shelf software would have required only a training session for the staff and thus could have shown the benefits of IT across the company within very short time. Roles and skills: Absence of proper personal was the prime reason for the failure of the initiative. Hazendal should have appointed a competent project manager to coordinate, motivate, mange and direct the project for its successful completion. Mindset: Creation of the positive and supportive mindset from the entire Hazendal team could have certainly made a significant difference in the project outcome. Recommendations The investments made by majority of organizations in the information and communication technologies, have not fetched them the competitive advantage necessary to improve the prevailing organizational knowledge (Kogut and Zander, 2008). Hence, it is necessary to identify various activities and operations that could realize the potential use of the information exploitation using the technological support systems (Sircar et al, 2000). Another important domain that is capable to derive the full potential of IT investments is in the process of strategic management (Willcocks, 2008). Thus absence of proper information analysis would adversely effect the organizations to understand the relevance of newer decisions and proposals. A proper analysis of the huge volume of data available in the organizations would help the managers to prepare a proper strategic plan of action. Concluding remarks The essay presented here clearly highlights the importance of exploitative systems of information for creating significant advantage in organizational growth. The organizations must be made to understand that the implementation of IT and adapting their operations to the changing need of the situations only could lead to the creation of knowledge to ensure their growth. (Total word count : 1481) References Alawi M and Leidner D E (2001), "Review : Knowledge management and knowledge management systems - conceptual foundations and research issues"., MIS Quarterly, 25(1) : 107 - 136 Balasubramaniam, P, Kulantilaka N and Storck J(2000), managing information technology using real-options approach, Journal of Strategic Information Systems, 9(1) : 39-62. Berk E, Moinzadeh, K and Tam K Y91998), "Impact of the information technology on firms performance and evaluation : evidance from newly industrialized economies", Information Systems Research, 9(1) : 85-98. 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