Possible Challenges That Can Be Encountered in Implementing the New Strategy - Phab - Case Study Example

PHAB REPORT MSc ISM Table of Contents Table of Contents 2 Introduction 3 Main Section 4 Required Business Process Changes 4 Possible Challenges that can be encountered in implementing the New Strategy 9 References 13 Introduction The strategic importance of information technology in any organisation cannot be undermined. For a growing and expanding business enterprise, the management of information systems should constitute an integral and vital part of the business plan. Information system management needs can be said to increase with the size of the enterprise. The smaller the organisation, the lesser the informational needs. A successful business structure in the 21st century is that which gives priority to the proper management of information systems and relationships with customers (Brink and Berndt, 2008). The business world has become exceedingly competitive and what matters is the competitive strategy that an organisation implements to stay ahead of competitors. The effectiveness of operations and business processes today depends on how effectively and efficiently a company integrates technology into the processes. Business functions like inventory management, communication, management of information systems and customer relationship management all require careful integration with technological input. The expansion of Phab business is in line with the goals any enterprise should have. The acquisition of a network of similar businesses increases the business needs in every aspect. The business processes should be altered to meet the increasing customer needs while the operations should focus on serving the larger customer base. The informational needs of Phab have changed and the installation of better information management systems with better software is necessary. An expanding business calls for a change in the management strategy to ensure the survival of the enterprise into the future (Callon, 2014). Several issues concerning the supply chain and technology needs of the expanding Phab enterprise need to be addressed strategically. Although the growth of business imposes more opportunities for success and profitability, such is not without significant challenges. Whether or not an organisation uses these opportunities to realise its potential depends on how well it manages the challenges that come along. In exploiting its opportunities, Phab enterprise should prudently focus on striking a balance between all business process needs and effect the necessary changes as indicated in the discussion that follows below. Main Section Required Business Process Changes The performance of Phab enterprise can be improved through optimisation of its business processes and proper management. Due to its expansion, Phab requires more elaborate business processes. To ensure the smooth functioning of the processes in line with the enlarged organisational needs, Ogonwe needs incorporate the Business Process Management function into the enterprise. That way, Phab would become more effective and efficient with an increased capability to change as opposed to its current functionally focused management (Chang, 2015). The administration of business processes has the potential to impact positively on the revenue generation and costs of the enterprise. Any relevant change in the company processes should stem from a particular focus on the management of these processes. In its policy-making approach, the function would enable Phab to perceive its processes as valuable assets that require proper management and development to deliver superior value to its customers. The process management in this enterprise can only be supported through technology (Zanjirani Farahani and Miandoabchi, 2012). Its incorporation, therefore, calls for changes in both technologies and people to achieve the goals of managing the business processes. As a technology enterprise and with the expanded market in Norway, Phab should purpose to create supply chains that are both scalable, flexible, risk-tolerant and cost-effective (Weele, 2010). Its expansion comes with the risks associated with the disruption of the existing supply chain. Therefore, the business requires a supply chain that can recognise those risks and contemplate the possible measures that can be used to address them. A management strategy that achieves this purpose should be put in place. The expansion of the business from the operation of three shops to eleven shops may pose significant risks into the supply chain of the enterprise. Phab, therefore, must not only lay focus the main direct suppliers but also on the smaller suppliers down on the supply chain. An expanded supply chain is required. Likewise, technological improvements in the management of the supply chain and inventory are also needed. Phab requires a robust strategy that will enable it to reach its primary suppliers ahead of its competitors to enhance its competitive advantage (Tan, 2002). Ogonwe and his management team should tailor their supply chain solutions to the particular challenges of each market. The market in Norway may have unique challenges that are not captured in the supply chain that operates in England. With its increased technological needs, Phab business requires the installation of an open source software in the place of the packaged software. The open source software is essential for ensuring the superior security of the data and information relating to different business functions (Herzwurm and Margaria-Steffen, 2013). The quality of the open source software compared to the needs of the customers is preferable to the packaged software. During its design, the participation of the users is given priority so that the final product reflects the particular needs of the user groups. The aim of being in business is to maximise on the shareholders wealth. To achieve the goal of profit maximisation, Phab like any other business must consider the options that can help deliver value efficiently. The open source software is cheaper and more preferable in reducing the costs of accessing software services. A primary advantage of using the open source software is that is that it can be customised to fit the business requirements. The business can tailor the software to the needs of different functionalities and even create more features in the software given the wide range of freedom (Dringoli, 2011). The expansion and growth of the enterprise mean the development of its software needs. Further reliance on the vendor provided software would keep draining more resources from the business unnecessarily when a preferable alternative is available. Due to the ever-changing business world, the enterprise would need to conduct periodic software updates to meet the changing needs (Tatnall, 2011). The packaged software cannot be updated by the company but by the vendor an aspect that may affect the decision-making process of the business. The open source software would be highly appropriate in effecting the many other required changes. One key function that Phab cannot do without is that of managing the customer relationships to ensure that lasting relationships exist between the business and its clients. A strategic focus on customer relationship management must be undertaken to accomplish this task (Kumar and Reinartz, 2012). The option of an open CRM software may be considered to make the interactions between the business and its expanded customer base more efficient. The unique business requirements in this regard are to have an automated sales force, customer support and marketing campaigns that can be supported adequately by a variety of the open CRM software. The expanded customer base requires a close tracking of all relevant customer information like their purchase behaviour and demographics. A comprehensive coordination in the generation of sales across a broader market is needed to fulfil the marketing, sales and service targets and expectations of both suppliers and the customers. The importance of Enterprise Resource Planning for the expanding business cannot overlooked. Although the majority of the ERP software that exist in the market are quite costly and complex, the use an open ERP software would be more appropriate in Phab. To have a proper management of its supply chain, accounting function, assets and sales, the consideration of instaling an open ERP software would be highly advantageous (Ferran and Salim, 2008). Owing to its vision of holding a footnote in the European market, Phab can only realise its vision and direction by appropriately managing its resources. The efficiency with which these required technological functions will be achieved significantly depends on having cheaper open source software in the business. The existence of different IT systems between Phab and the acquired Netwokz requires to be addressed. The enterprise must consider instaling a better business system for its growing operations to realise the optimal benefits and cut down on cost (Fogel, 2009). Maintaining the different IT systems may not be prudent since it will result in distinct, disparate applications for various functional areas at different points in time. Consequently, software integration challenges and process inefficiencies would be experienced. Therefore, Phab should ensure that there exists an Integrated Business Software system that would universally serve the needs of the entire organisation. Running a disparate business software can adversely affect the productivity and flexibility of the enterprise thus inhibiting future growth opportunities (Samson and Bevington, 2012). Due to the risk of increased customer churn, wasted employee productivity, integration complexity and lack of real-time visibility associated with the disparate software system, an integrated system is required. Phab should be focused on ensuring that all its customers get the right experience and information at the right time and in the right form. The employees too should have an instantaneous access to all relevant customer information for the purpose of delivering service and making sales to the customers. The performance of these tasks should be achieved at reasonable costs and with lesser intricacy encountered in the business processes (Geunes, 2013). To make these priorities come right, an integrated business software system at Phab is inevitably necessary. Such would ensure that the company assumes an accelerated growth with user-driven innovation that improves efficiency, IT time, cost savings and visibility. Ogonwes conceptualised idea of launching an e-commerce arm at the business is worth pursuit given the highly revolutionised market. A B2C e-commerce functionality is necessary for supporting differentiation and innovative growth of the enterprise (Manzoor, 2010). A direct interaction with the customers and making sales using the Business-to-Consumer e-commerce is highly preferable. However, the launch of this functionality should be done in the most efficient manner to avoid the incurrence of unnecessary costs. The open source e-commerce software tools should help Ogonwe realise his conceptualised idea. The installation phase should require the creation of an appropriate website in which all the transactions between the customers and the enterprise is availed. The integration of the functionality of the supply chain with the proper management of the information system should be ensured. The effectiveness of the business systems to receive and process customer orders should be supported with the right technology installations (Heijden, 2009). The proper service of the customer base in England and Norway from a central point highly requires the installation of an e-commerce functionality that is focused on removing any barriers of intermediation. The business would be able to understand and respond effectively to the unique customer needs and hence improve the sales and profitability. However, making all the business catalogues available on the website and intensive advertising to make sales may come as an added cost. The growth of the enterprise has necessitated the need to open a new warehouse as envisioned by Ogonwe. To ensure that the business processes and inventory management are adequate to serve the market, proper inventory management practices are necessary (Powell, 2003). Therefore, the establishment of the warehouse to avoid stock out costs and ensure that customers have the goods when they need them is not by itself enough. Instead, an inventory management system that can help the company forecast demand and any possibility of demand shocks in the future should be the priority. The electronic management of inventory and the purchase behaviour of the customers should be adequately done to enhance the understanding of the lead time and economic order quantities (Muller, 2011). The availability of goods as and when required by the customers can improve the creation of a loyal customer base upon which the success of the business depends. A warehouse where prudent inventory management practices are not put in place can be costly to the enterprise. Overstocking is associated with the risk of losing goods through obsolescence or expiry when the demand declines. Additionally, the cash flow of the business will be affected due to a large stock of unsold commodities. Possible Challenges that can be encountered in implementing the New Strategy Implementing the new strategy to match the new requirements and needs of the business enterprise comes with myriad challenges (Paradice, 2010). Ogonwe is likely to encounter serious difficulties in achieving each of the desired business process changes to align his business enterprise with the technologically advancing business environment. The expansion of the market through the acquisition of Networkz chain of shops means an expansion in the customer base, an increase in employees, business processes, increased tax returns and other costs. The greatest challenge that Ogonwe is likely to encounter and from which other challenges may stem is that of adequate capital to effect the changes. An increase in the supply chain participants means an increased cost for the business (Panneerselvam, 2014). The installation of the open source software in different functions of the company come with an additional cost that may take the time to start generating funds. Similarly, the building of the warehouse and incorporation of the inventory management system are issues that require a substantial capital investment. The new strategy calls for the sourcing of new and highly qualified personnel to ensure that the desired changes are implemented. The employment of more staff with the desired technical skills to manage the information systems and other business functions come as an additional fixed cost to the enterprise. The overall argument on the cash outflows in the implementation of changes and payment of salaries and wages for an additional workforce accounts for the biggest challenge. Training the current employees on the use of the information systems is also another challenge (Jung, 2013). The management of a large business that spreads its operations in two countries is not easy. Ogonwe must seek an able management team to assist in the management function. The diversification of the products and market that remains untested for the Phab business as Networkz engaged in a wider line of products. Testing the market for these products and the launch of the e-commerce functionality are a possible challenge for Ogonwe. Finally, the new strategy involves a change that may be resisted by the employees (Khosrow-Pour, 2011). The resistance of the employees to the change is a unique problem that Ogonwe should address. Conclusions Acquiring the Networkz business is a matter that demonstrates the ability of Phab to grow and its expansion strategy. Such acquisition presents a significant opportunity for the enterprise in terms of increased market share and profitability (Khosrow-Pour, 2009). However, this potential opportunity can only be exploited if several changes are effected into the existing business processes. The majority of these changes are technology-based and involve the incorporation of an effective management information system to assist the company to manage its growth. The supply chain and new strategies for managing both suppliers are essential to the business success. A change in the use of the costly packaged software and the adoption of the open source software can help maintain the costs at a manageable level. Incorporating a B2C e-commerce functionality and the relevant systems to manage both the enterprise resources and customer relationships are critical success factors for the business. The building of a warehouse and the installation of the appropriate inventory management systems and practices could highly manage the expanded market. The various changes desirable for Phab do not come freely but involve challenges that can be managed through prudent management practices that optimise on business decisions. Recommendations i) It is highly recommended that a B2C e-commerce functionality and the Customer Relationship Management Systems be installed to enhance proper management of customer information. The success of any business in the 21st century greatly depends on how best it manages its clients and therefore Phab should endeavour to meet the needs of its expanded customer base by understanding their particular needs. The business and customers interractions would help in process improvements. ii) The business should use technology as its competitive tool by ensuring that the business processes are equipped with the right technology to guarantee the superiority of the service rendered to all key stakeholders. iii) Building a new warehouse and the installation of an inventory management system are highly recommended. iv) The management should involve the workforce in planning and implementing all the major changes in the organisation to avoid failures that may arise from resistance. More employees with the relevant technical skills should be incorporated to guarantee the success of the new strategy. References Brink, A. and Berndt, A. (2008). Relationship marketing and customer relationship management. Lansdowne, South Africa: Juta- Pp 12. Callon, J. (2014). Competitive advantage through information technology. New York: McGraw-Hill. Pp 33 Chang, J. (2015). Business process management systems. 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