IT Strategy and Management of Li and Fung Company - Case Study Example

Executive Summary The internet in particular is revolutionary and it has revolutionised the way organisations do business. The advent of the internet has seen most organisations harnessing it in their day to day operations in conducting business. However, other sceptical people often feel challenged by adopting the use of the new information and technology for fear of loosing their old customers if not properly implemented. A critical analysis of the given case study shows that the decision to adopt and streamline its activities online is one of the major challenges facing Li and Fung. Whilst the firm is aware of the benefits of new information technology, they are a bit sceptical about loosing their traditional grip on business. They are also sceptical about outsourcing competent IT specialists as it may put to risk some information seen as confidential to the organisation. However, it is recommended that the effective use of the internet through specially designed websites is one of the most viable ways of ensuring competitive advantage in the contemporary period which is characterised by highly sophisticated medium of communication in the form of the internet. Introduction Information and technology (IT) generally refers to the technical aspect of using computers and telecommunications in some instances to store, retrieve or even transmit data while information systems (IS) refer to the soft process of manipulating and processing of information (Strydom 2004). The new information and communication technology has brought about dramatic changes to the way organisations conduct business during the contemporary period. The advent of the internet in particular has revolutionised the ways people interact and exchange information. Similarly, it is now easier for businesses to disseminate or process information as well as link with its stakeholders instantly with the aid of the internet. In attempting to understand clearly the challenges facing Li & Fung in the given case study, it is imperative to give a brief explanation of what the internet is. The internet is most commonly defined as a global network of computer network that brings together all of the computer networks, information on them on a single computer monitor (Du Plessis F. et al 2005). Marketing communication forms the backbone of all information dissemination related processes within an organisation in attempting to satisfy the needs of the targeted audiences. In this situation, new information and technology forms a pivotal role in providing a direct link between the organisation and its stakeholders. Li and Fung is primarily facing challenges of adopting a new strategy of doing business which relies heavily on the use of new information and technology particularly the internet. They are at first sceptical if internet use will disintermediate them. There is some form of resistant to change as they are still doubtful if eCommerce will be able to transform their business which has been performing quite well for a long period without the use of the internet. They are particularly concerned about not completely deviating from the old traditional ways of carrying out business but rather incorporate the new features provided by the internet with their original ways of doing business. Indeed, there is risk of loosing all the hard earned success if the strategy to adopt and implement new technology is not properly planned and is poorly implemented which is one of their fears of loosing credibility. While the initiated growth strategies which include organic growth, expansion through acquisition & extension to its supply chain through the internet have brought about positive change, the main challenge faced by Li & Fung lies in its ability to see if it could determine its relevance. There is need to streamline all its activities as a way of ensuring that they are focused hence little chances of being disintermediated. In the wake of the use of the internet, the online companies can damage offline competitors often by acquiring them or their key people. The old economy trading company usually face the challenge of being out competed from business overnight by online companies if they do not move swiftly to adopt the new information technology which is fast and efficient in conducting business. In the face of IT especially the use of the internet, the only viable option for the Fungs is the adoption of the eCommerce strategy as a way of keeping pace with the latest technological developments taking place within the settings of their business operations. One challenge they are facing in the event that they decide to adopt the eCommerce strategy is about the need to decide if they should solely rely with the outsourced existing IT staff or they should incorporate them into the structures of the company. This challenge will also include the recruitment of competent, highly skilled technical staff with the knowledge about issues related to IT and eCommerce. Depending on outsiders in manning the new initiative would be risky in that it would involve entrusting all the confidential information about the company in their hands. Careful planning is often required before rushing into adopting new technology as failure to be strategic would bring about negative results. Indeed, while the Fungs appreciate the fact that they are operating in a dynamic environment that is currently changing, they also face a daunting task of putting in place a mechanism that will constantly monitor the changes taking place in the external environment. This would require mutual trust among those entrusted to undertake the task. This task requires training of the staff members internally so as to equip them with the required knowledge about grasping the changes taking place in the market. Another challenge for Li & Fung deals with connecting the thousands of its manufacturers to its systems. Whilst this would make communication relatively easier, it has its own problems cited by the Fungs that there may be a tendency of misrepresentation of facts by the manufactures which is the reason why it wants that information to be processed by its own staff. While this can be advantageous to them, there might be a tendency of mistrust by the manufacturers which may not be a positive development. However, their firm should have access to information about their manufactures or suppliers so as to facilitate easy access of information on pertinent issues with regards to the day to day operations of business. Li and Fung has different IT and IS options it can choose to implement in order to overcome the challenges brought about by the new information and communication technology as a result of the advent of the internet which has revolutionised how businesses operate. One notable option of substance is the attempt to integrate the old business economy and the new technology. This will allow it to retain especially all its old employees by training them to meet the demands of IT without rendering them redundant. Outsourcing may be advantageous in that it may include head hunting where the company would look for talent but there would also be need to offer training to workers such that they will also keep pace with the latest developments taking place in the market. New technology will foster a positive development if its benefits are being seen by many people. The ability to communicate with millions of people around the globe, to access and share information, to transact business, advertise your products and support your customers around the globe from a single computer screen makes the internet an enormously powerful tool (Du Plessis F. et al 2005). As far as marketing communication is concerned, the internet has a lot to offer. The use of the e-mail is one commonly used tool of communication where organisations can effectively use this cheap and fast way of communicating with customers, suppliers as well as between the workers. Basically, IT should not be limited to external communication with either customers or suppliers alone but Li& Flung can also effectively harness this technology to network with all employees with relative ease. There is need to closely network with all it customers, suppliers and even manufacturers so as to promote relatively easy access to vital information pertaining to the needs of various stakeholders involved. Important information about the organisation and its products should be readily available to all those who may need it without much hassles. One of the most viable options is the use of websites. Indeed, a website is one of the most common examples of showing the capabilities of the internet. Many organisations across the globe are increasingly creating their own websites. With the effective use of websites, it is easy to advertise a product, offer customer support, conduct public relations, information dissemination as well as customer relationship building. However, it should be noted that the major objective of the website is marketing communication where there is a two way flow of information. The best option for Li and Fung is the effective use of specially designed website which should carry all the vital information about an organisation. A well designed website often carries the organisation’s long history, its operations even news clips with updated information about any new changes that may be effected. In this regard, a website should not be limited to SMEs alone as it will leave out other vital information. In this particular case, a website can encompass all the information about other offline companies which are part of the manufacturing or supply chain. A website can be carefully designed to carry vital information about an organisation on different pages which can be easily scrolled down to select the information one may need at a particular time. One main advantage of the website is that the organisation is able to control the information it wants to disseminate. The website also offers wonderful flexibility in advertising products and services. The adverts can be in form of graphic, audio or video presentation which can be easily updated to meet the organisation’s requirements at that particular time. Some of the websites during the contemporary period are often integrated with the databases of the organisation. These databases are in turn are integrated with the rest of the organisation’s IT systems (Du Plessis F. et al 2005). In such a situation, should there be any information change, it is automatically updated making it possible to ensure that all the latest information is always readily available online. However, as far as implementation of this strategy of eCommerce through the use of the internet is concerned, the main issues involved include careful selection of the information the organisation would want to disseminate. Having selected that information the next stage would then involve carefully drafting it for dissemination in such a way that is attractive and can captivate the attention of the targeted audience. If ever it is the website being used, it should be designed in such a way that information is logically presented in a clear and precise format that does not compromise the credibility of the organisation where customers would face difficulties of accessing the information they would want as a result of the poorly organised layout of the website. Implementation of this strategy should always conform to what the firm is earmarking to achieve. Whilst it is known that Li & Fung is an exporting enterprise linked to diverse other firms, ranging from suppliers to manufactures, a clear distinction should be made between those companies which are subsidiaries and those which are trading partners as a way of being explicit as far as information dissemination is concerned. This would be advantageous as it would allow it to carefully streamline its activities making a distinction between the services it offers from those offered by other companies. The information systems of these organisations should not mix as this will pose a real danger where the subsidiary companies can easily access even confidential information of the parent company which can be a threat to confidentiality. The risks that may be associated with embarking on a move to adopt new information technology might be failure to match the competition from rival competitors. These may have more appealing and advanced websites likely to captivate the interests of the customers than yours which can be a major setback if new technology is poorly harnessed. When a firm is adopting a new strategy in its operations, there ought to be mutual agreement amongst the stakeholders involved that would be spearheading the changes taking place. There is also need to outsource technically competent workers in the event that the original workers are not technologically advanced to match the competition being offered by other rival competitors. If the workers are not familiar with the attributes of the new information and communication techniques, this may send a wrong signal especially to the targeted audience who would find nothing attractive on the products and services offered. However, it must always be noted that the internet and any other form of business during this current period complement each other where the success of business will depend on the positive adoption of information technology. The customers in particular have the capacity and power to decide what they want and cannot easily be manipulated by the companies as was the case in the previous where the marketers will do all the communication while the customers had little opportunities to say out their views also. For instance with regards to the use of websites, the customers have the opportunity to give their feed back in response to what would be communicated by the marketers to them and they can even interact directly. Use of new technology is effective and fast such that there is direct interaction between the firm and its stakeholders scattered across the globe. Therefore, in view of the above discussed assertion that the use of the internet is a viable strategy of keeping up pace with the change taking place in the marketing communication technology, upon accepting the recommendations presented to them, the Fungs ought to invest heavily in infrastructure as well as equipment which can support the initiative of embarking on the drive to establish an up to date communication strategy meant to keep pace with the latest developments of IT. They also ought to invest on research which allows them to closely monitor any other latest development which can be helpful in carrying out their business with the use of the internet without loosing focus on their old economy business targets. Over and above, it can be concluded that the internet has revolutionised the way organisations conduct business during the contemporary period. In the above case study, Li and Fung face challenges of adopting this new technology which has brought about sweeping changes to the ways they conduct business. The internet in particular has made communication instant and hence has improved the speed and efficiency of conducting business. Therefore, it is highly recommended that Li and Fung in particular adopt this eCommerce strategy upon careful planning and implementation of the new communication technology. References Strydom, J. (2004), Marketing, 3rd Edition, Juta & Co Ltd, SA Du Plessis F. et al (2005), Integrated Marketing communication, 2nd Edition, New Africa Books. Read More