Information Systems Strategy of Bauer Pharmaceuticals - Term Paper Example

 Information Systems Strategy Contents Introduction 3 Mission 4 Goals 4 Strategy 4 Research of Technology Trends 5 Depth and breadth of research 5 i. Group Discussions 6 ii. Questionnaires 6 Trends 6 Strategic Analysis 7 PEST ANALYSIS 7 McKinsey 7-S Analysis 8 Internal Analysis 9 External Analysis 11 Proposed Information System Strategy 11 Infrastructure 11 Network Infrastructure 11 Technical Infrastructure 12 Software 12 Hardware 13 Standards and Policies 14 IT skills 14 Implementation areas 14 Management 15 Evaluation of IS Strategy 15 Implications of the IS Strategy 16 Appendices 18 Appendix 1: Findings of PEST Analysis 18 Appendix 2: McKinsey 7-S Analysis Findings 18 Appendix 3: Strategic Pharmaceutical Management Information System for TB in Dominican Republic 19 Introduction Bauer Pharmaceuticals is a middle level company involved in the distribution of medical equipment and drugs, in the state of New York. The company works, round the clock, to deliver drugs and equipment to its clients that include hospitals, institutions of higher learning, and private organizations. Bauer Pharmaceuticals sources its drugs and equipment from manufacturers directly and has a good working relationship with all its business partners. In order to keep good business standards, the company has signed written agreements with its suppliers; this defines the ways and means of engagement for both parties. The agreements define how Bauer Pharmaceuticals requests for supplies from its partners, the modes of delivery, quality and security checks, remuneration, as well as the cause of action in case of disagreements. The documents also determine the terms for termination of contracts. The company also has agreements with its clients that determine how it engages with them. Regular clients have long term contracts whereas one time clients have temporary contract agreements. These agreements are subject to review depending on prevailing conditions. The company is managed by a board of directors who outline its long term objectives and goals. The board works together with the Chief Executive Officer, CEO, and his team of departmental managers to implement company objectives. Departmental managers run different branches of the company; these include procurement, operations, human resource, and finance. The information technology section, which is tasked with developing this information technology strategy, works under the operations department. Each department works independently; however, their operations have to be approved by the office of the CEO. Activities that cut across departments are coordinated by a special team operating under the office of the CEO. Departmental managers run their departments and report to the office of the CEO. Mission To improve health standards by supplying Drugs and Medical Equipment to clients Goals To be the most sought after pharmaceutical company in New York To expand into neighboring states To increase company turnover to 1 billion dollars. To reduce delivery and distribution times to acceptable levels To reduce the number and frequency of customer complaints. Strategy In order to meet its objectives, Bauer Pharmaceuticals plans to employ the following strategic actions: i. Automation The company seeks to take advantage of advancements in technology to computerize its operations in order to improve productivity. ii. Downsizing Bauer Pharmaceuticals intends to reduce its expenditure on manpower by laying off staff that are not critical to its operations. iii. Business process re-engineering The company will conduct a frequent audit to determine new ways of improving its operations, in an effort to reduce costs and improve productivity. iv. Outsourcing To reduce costs incurred in purchasing equipment and hiring staff that are not core to the company’s operations, Bauer Pharmaceuticals will outsource external resources on contractual agreements and leases. Research of Technology Trends Depth and breadth of research The research concentrated on how The Company Can Use Information Technology To Carry Achieve Its Goals. It highlighted the current state of affairs, defining probable ways of improvement while putting information systems in time. This covered both internal and external affairs of the company. Internally, the research sought to establish the current modes of operation, their efficiencies and weaknesses, as well as desired changes. Externally, the study was meant to analyze the relationship between the company and its suppliers and clients. While working with the office of the chief executive, the IT department constituted a committee, composed of representatives from all the company’s departments, to develop the information systems strategy. This team was headed by the chief information officer, deputized by a representative from the CEO’s office. The team collected data using group discussions and questionnaires. i. Group Discussions These involved employees from various departments; they had sessions where they discussed various issues related to their departments. Inter-departmental discussions were also carried out for departments whose activities overlap. The outcomes of these discussions were synchronized to come up with recommendations and data that represented the status of IT in the whole company. ii. Questionnaires Four types of questionnaires were used in this exercise; one narrowed down to the departmental level; it had queries relevant to particular departments. The other questionnaire covered the status of IT in the whole company; thus, it was administered to everybody. The other two questionnaires were administered to Bauer Pharmaceuticals’ business associates. One was administered to the clients and the other to the suppliers. The two questionnaires were meant to establish the relationship the company had with suppliers and clients, seeking to identify possible ways to enhance the links using IT. Trends As they endeavor to increase their productivity and increase profits, many companies are moving from manual operation to the use of computerized systems such as ERPs and robots. Whereas this might seem an easy task, there are numerous factors that have to be considered before such steps are taken. Some of these include security, efficiency, reliability and risk. In order to ensure everything goes according to plan, companies have to develop information technology blueprints. These documents highlight strategies that the companies have to implement to achieve their goals. Strategic Analysis PEST ANALYSIS PEST analysis evaluates possible opportunities and threats in political, economic, social, and technological contexts of the business environment, in this case, the formulation of an IT strategy. This analysis provides an excellent overview of the environment in which Bauer Pharmaceuticals operates. i. Politics The pharmaceutical industry is regulated by a number of laws instituted by the government. These laws are implemented through government institutions like the poisons and pharmaceuticals board. The company has to study and evaluate what these laws say on the use of technology in pharmaceutical businesses in order to come up with appropriate strategies. ii. Economic Factors This encapsulates all participants in the financial sector, including suppliers and clients. Bauer Pharmaceuticals has to evaluate prevailing GDP indicators, interest and inflation rates, as well as disposable income and stock market conditions. It should structure its IS strategy to suit the conditions presented by these factors. iii. Social Issues People have different social beliefs that are based on the kind of lifestyles they have. It is, therefore, important to put social factors into consideration when developing the organizations’ IS strategy. iv. Technological factors This seeks to establish the impacts of technological development. Bauer Pharmaceuticals has to analyze the technologies that it intends to use to identify their suitability. The company must consider how the technologies it implements will affect all business players. Technology should not only increase company production and sales, but also client and supplier satisfaction, as well as that of the society where it operates. McKinsey 7-S Analysis This analysis’ primary goal is to establish the strengths and weaknesses of Bauer Pharmaceuticals IT system in terms of software and hardware. It takes the following factors into consideration: i. Strategy This seeks to establish the firm’s vision and direction in terms of how they are generated, articulated, communicated and implemented. It will seek to establish whether Bauer Pharmaceuticals has an apparent, logical, and comprehensible connection and understanding of its weaknesses, strengths, operational environment, strategic plans, and business and information control systems. It also establishes whether all employees are aware of the company’s goals and that they are working towards them rather than pursuing their individual goals. ii. Structure This is useful in the establishment of a clear IT management structure. It identifies all the players in the management structure and outlines their roles and responsibilities. It also determines whether the decision making structure is centralized or decentralized. iii. Systems These are the decision making systems that exist in the company, including operations, human resource, finance etc. These also include computerized systems such as expert systems. The analysis conducted can be broken down into two categories; internal and external. Internal Analysis Internal analysis sought to establish the status of IT within the premises of Bauer Pharmaceuticals. Using PEST and McKinsey 7-S analysis techniques, it analyzed the strengths and weaknesses of the current IS system while considering numerous factors such as political, economic, social, and technological issues. In addition, the analysis evaluated the organization’s structure, style, strategy, staff and their skills, systems and shared values. The PEST analysis technique was selected because it presented a good technique to analyze external factors affecting the company. On the other hand, McKinsey 7-S analysis concentrated on the company’s internal factors. Using the two analysis techniques, the company was able to come up with a holistic overview of the factors that affect implementation of IT in its operations. Results Some of the results of the analysis indicated the following: i. There was limited utilization of IT in the company’s operations. Most processes were carried out manually by employees. ii. The government has enacted policies and legislation to support and protect the utilization of IT in organizations. iii. The automation of business processes in the pharmaceutical business, such as order placement and processing and inventory management, has resulted in significant growth to major industry players. iv. The availability of IT infrastructure was limited to top management only v. Most company employees were not proficient with the use of IT systems; some of them were not aware of their importance. vi. The company did not have a cross-cutting, well defined IT policy External Analysis This was tuned to establish the IT capacity of entities that Bauer Pharmaceuticals interacts with. The study yielded the following results: i. Most clients were IT savvy and had their own IT systems. Some of them had well defined Information System Strategies. ii. Few suppliers embraced IT services in their operations; just like in Bauer Pharmaceuticals’ case, most of them had deployed IT systems in few departments. Proposed Information System Strategy Bauer Pharmaceuticals needs a well defined information system strategy to guide it in the use of information technology tools as it seeks to meet its objectives. This strategy encompasses all components of information systems management ranging from infrastructure to software and hardware systems, as well necessary rules and regulations and management structures. Infrastructure The company will have to deploy, operate and maintain a lot of infrastructure to support its information systems. These include: Network Infrastructure These include all forms of communication infrastructure that are necessary to enable efficient communication in the company. They include the following infrastructure: Data network All new buildings and offices will be fitted with modern state of the art data networking facilities with the capacity to transmit high bandwidth data. This will include deployment of security protocols to protect the networks from intrusive attack. Secure servers will also be configured to ensure that all users of the company’s network resources are authenticated before being granted access rights. Similar systems will be deployed in existing business blocks all over the company. Telephony Bauer Pharmaceuticals should migrate from the analogue MD110 system to the IP Telephony technology (IPT) in all its premises. Consequently, the company should acquire IPT gadgets that have LCD screens to make it easy for staff and management to make and track calls. Technical Infrastructure Server Design New IS systems should be cohesive and provide incorporation and communication within all departments in the company. In addition, appropriate server hardware and software systems should be identified to ensure servers operate at optimal levels Security The security of the IS system is paramount. As such, appropriate security protocols should be deployed to complement those provided by the network infrastructure. Efficient and effective antivirus programs should also be deployed in the servers as well as the workstations at all times. Software Bauer Pharmaceuticals’ information system will be operated using a set of software applications that include the following: i. Document Management Systems This will be necessary to identify and track documents in the system. It will store document information such as document numbers and departments. The company will need database management systems to manage such information. The system need to be not only fast but also reliable. ii. Intranet and Internet Presence The company’s critical processes will run, within its intranet, to minimize chances of hackers and other persons accessing it externally. However, clients should be able to access order placement and tracking services from the internet. On the other hand, suppliers could be given direct links to Bauer Pharmaceuticals’ inventory system to track stock of their products iii. Online Payment tools The company should provide its clients with online payment services. Only tools that have been tried and tested will be included in the system. iv. Managerial and Operational Software and Business Applications These software would assist management and operations to conduct day to day activities in the company. Such applications include inventory management systems, user management systems, invoicing, billing, payroll systems, and report generation systems. Hardware The company will need to acquire hardware on which the software would run. These include: i. Desktop Computers These will act as the points of communication between company employees and the information system. The computers should be powerful enough to handle numerous queries without delays. They should also have enough storage space to carry all documents as is necessary. ii. Routers and switches These would be used to distribute network access within Bauer Pharmaceuticals’ premises. iii. Printers, Scanners and Copiers These will be important in the generation and sharing of reports. They should be high end equipment with the capabilities of making numerous copies per unit time. Standards and Policies The success of any information system is dependent on the quality of workmanship utilized in right from conception through to design, development, implementation and maintenance. The company will adopt and implement locally and internationally approved standards for all its systems. These standards and policies will also be applied in security implementation. IT skills The automation of service delivery at Bauer Pharmaceuticals will require personnel with skills in IT competences such as use of desktop applications and email services. Therefore, the company should provide its staff with regular trainings on IT best practices. Implementation areas i. The infrastructure would be used to set the stage for the deployment of the IS system. Network infrastructure such as the data network would be used in the transmission of data from workstations to databases and back. The same infrastructure would be used to inter-communication between dependent servers. Once clients’ inputs get into the intranet, they would also be directed to servers and databases through data networks. Telephony would come in handy in enhancing voice/audio communication within the company, enhancing communication by increasing efficiency while reducing costs. Technical infrastructure would work, with network infrastructure and other components of the IS, to enhance service delivery. ii. Hardware and software work together, with the hardware providing the platform on which the software runs. In essence, it is the software that will direct the hardware on what to do, and at what time. iii. Standards are policies serve as checks and balances and are used to gauge the suitability of the information system. They will assist the company meet set standards, ; hence, make its products and services sought after. iv. Basic skills in IT are necessary to operate any information system. Staff, therefore, need to be IT savvy if they are to carry out any meaningful activities in the system. Management The system will be managed by the IT department. The chief information officer will have the overall responsibility for management of the Information System. He will assign IT staff to every department to ensure that each section runs efficiently. The system’s resources will be shared across all departments. However, each independent subsystem will have its own resources to enable it run independently. There shall, however, be a central repository where all the subsystems merge. Evaluation of IS Strategy The strategy could face a number of challenges which include: i. The current staff may not have appropriate information technology backgrounds to handle information systems. This will force the company to conduct regular trainings to its staff, a process that costs extra money. In the worst case scenario, the company could be forced to lay off some of its staff if they fail to adapt to the new system. ii. Bauer Pharmaceuticals could have a shortage of qualified technical staff to implement and maintain its IS strategy. The company could be forced to hire additional staff to cover this deficit. iii. Despite heavy investment in security measures, the security of the information system could still be compromised. Most security breaches in systems are normally initiated in-house by employees. It is, therefore, necessary for Bauer Pharmaceuticals’ management to make thorough background searches to all its employees to establish their integrity. Implications of the IS Strategy The implementation of this information system is necessary if Bauer Pharmaceuticals is to make meaningful growth in the future. Huge costs will have to be incurred, and a lot of human resource used in the project. However, it is important to note that the return on investment of such projects yields positive outcomes if the project is implemented well. Some of the benefits of implementing this information system strategy include: i. Increased availability of data that Bauer Pharmaceuticals can use to analyze business trends; hence, help the company come up with improvements in its service delivery. ii. Improved efficiency, in service delivery, brought by automation. This includes reduced order processing time, which leads to reduced delivery time; hence, resulting in content clients. iii. Enhanced user management that makes it easy to track staff activity in the system enhances accountability. Appendices Appendix 1: Findings of PEST Analysis There was limited utilization of IT in the company’s operations. Most processes were carried out manually by employees. ii. The government has enacted policies and legislation to support and protect the utilization of IT in organizations. iii. The automation of business processes in the pharmaceutical business, such as order placement and processing and inventory management, has resulted in significant growth to major industry players. iv. The availability of IT infrastructure was limited to top management only v. Most company employees were not proficient with the use of IT systems; some of them were not aware of their importance. vi. The company did not have a cross-cutting, well defined IT policy Appendix 2: McKinsey 7-S Analysis Findings i. Most clients were IT savvy and had their own IT systems. Some of them had well defined Information System Strategies. ii. Few suppliers embraced IT services in their operations; just like in Bauer Pharmaceuticals’ case, most of them had deployed IT systems in few departments. Appendix 3: Strategic Pharmaceutical Management Information System for TB in Dominican Republic Source: http://www.msh.org/news-bureau/strategic-pharmaceutical-management-information-system-in-dr.cfm Read More