Strategic Business Systems - Assignment Example

Question # 1: Management decisions are not as easy to make as decisions made by different users of ICT support systems for business. This is because business is dynamic, and it is characterized by different trends, and this means that decision making cannot be static. Different decisions have to be made for every different scenario or trend in business. As a result, managers seem to be the only people who don’t seem to know what they really want, and designing a good ICT support system for them is very difficult. This is according to the research by Gorry and Scott Morton. Managers, therefore, need to have a decision support system specially designed for them, which should be suitable for every level of decision making. According to Simon’s Decision Making Model, managers have three different decision making levels; strategic, premeditated and systematic (Haselkorn 63). Decision Support Systems are basically IT systems that specific software structured to provide support all decision types except the structured ones. These systems are very interactive, and it is through interaction with the user that the DSS systems are able to lead to tailored results. There are three main components of a typical DSS system, and these include: the user interface, the database and the model, network or structure of the DSS. The user interface is the transition between human beings and virtual machines. It is through the user interface that the two parties can interact effectively. The user needs to effectively communicate to the machine by giving input and by correctly controlling it. Also, the machine needs to be effective in its communication to the user by giving the correct output. The database is the system in the machine that stores data and organizes it in a way that makes it possible and easy to retrieve the same. Database management systems are used to manage database for more effectiveness in management of data. The model or structure basically suggests that one thing is used to represent or model the other, which is usually the original one. In DSS, the networks and models used are conceptual, in that they are not tangible but they are abstract. In DSS, real life situations are modeled, so that when the user inputs the decision needed to be made, the model of a real life situation will lead to the answers (Walters 243). Question # 2: A push-based supply model is a model in which, as the name suggests, what you sell is pushed into the consumers. Salesmen and ladies are known to use this method whereby they sell products with a “do or die” attitude. All that is needed from this type of supply model is results; big volumes of sales. This model is quite easy to implement, and all that is needed is a handful of aggressive people; marketing is very cheap in this model. However, relationships between the company and its customers, suppliers, distributors, et cetera are ruined. On the other hand, a pull-based supply model “pulls” all the parties of the supply chain to itself before selling the product to them. In order to achieve this, marketing, promotion and advertising are considered to be the major areas of investment. As a result, this product is accepted by consumers, and the demand becomes so high that every retailer finds it necessary to have the product in their stores. The Toyota Company is one company known to use the pull-based strategy to supply products, hence the reason why this company is in a better bargaining position that most others. The bullwhip effect is a phenomenon applied in a supply model that is based on prediction. This is caused by the need for companies to save and to minimize on wastage, and they therefore operate on exact or almost exact inventories. Such companies minimize on inventories when they predict low demand (hence low production) and when there is need for more production to meet high demand, the companies maximize on inventories. The major cause is when companies depend highly on production as per the demand (Walters 287). Question # 3: Competitive advantage is basically the advantage a company may have over its competitors, especially in how it does its strategizing. This advantage puts the company on the better bargaining end as compared to its immediate competitors. When ICT is used, competitive advantage can be gained in many ways. For instance, a company is able to reach more people despite any geographical barriers when ICT is used, and this means that customers have greater options to choose from. Because of this, healthy competition is created and companies are left with no option but to step up their game so that customer satisfaction can be achieved. Sustained disadvantages of ICT are many, and it is easier to avoid them than it is to get sustained competitive advantage. For instance, using ICT in business comes with a lot of competition. Therefore, a business that has no huge capital may find it hard to stand up against its competitors in the same field. In order for businesses to succeed, they start discrediting its competitors, and even malice is used. This explains why there is a lot of employee theft, fraud, identity theft, et cetera. Getting sustainable competitive advantage using ICT is therefore harder than avoiding sustained disadvantages of the same (Walters 244). Question # 4: Groupware and group support systems are generally used as facilitators for interaction among groups. Communication, collaboration, control and informing are all achieved using these systems. Also, groups can be monitored in a hands-off mode by use of the groupware technology. This technology is used as part of the strategic business plan in most businesses. Managers use this method to cut down on costs while at the same time ensuring that more value is obtained with much more simplicity. Groupware systems can synchronize groups working at different times or at the same time, and in separate physical locations and even those working within the same location or in the same office. Communication is made possible in areas where it did not exist before, and it is strengthened and made clearer in areas where it was (Haselkorn 85). Groupware and group support systems began way back in the 1980’s, and it is a technological aspect that has grown ever since. These systems are no longer used for work related settings only, but they are also used in the social and individual settings. These systems were also introduced into the military in 1998, and they are highly used in military work groups for higher efficiency at work. It is almost certain that groupware technology will highly evolve over the next fifteen years, and it is going to be the greatest ICT challenge. This prediction is based on the observation of the rate at which IT has developed over the years. Every generation lives in a time when ICT has developed so much so that it almost has no resemblance with what it was during the previous generation. For instance, a grandfather, father, son and grandson all have totally different experiences in their lifetime as far as ICT is concerned. While the grandfather lived in times where the only means of communication was through landline telephones and telegraphs, and he has lived in times where music was stores in cassettes or discs, the grandson has a totally different story. The grandson gets his own Smartphone at the age of seven or nine and he has the privilege to chat with many people at once despite any geographical barriers. Also, music, to the grandson, is basically software or a virtual file downloaded from “virtual space” into a tiny gadget. However, this is not to say that the introduction of groupware and group support systems has been easy or will continue too be easy; every level of its evolution has some degree of resistance before it is absorbed. Also, resistance is almost guaranteed because of the increasing cases of cyber crimes (Walters 258). Question # 5: An Enterprise Resource Planning (ERP) system is a system that tries to put together all parts of an organization by consolidating management information and ensuring automation of processes by use of software. On the other hand, BPR (Business Process Reengineering) does not consolidate tasks and processes, but instead works by eliminating unnecessary processes for more efficiency. This is done to save time and to cut down on costs of operation. Intense study of the business and its current structure is needed before the reengineering process can be implemented. During implementation, the basic aim is usually to restore work order into the business. BPR and ERP are said to be “parallel” to each other, and it is often advisable to use both methods when trying to bring change into a business. Using both systems sees to it that time is saved and maximum efficiency is attained. However, BPR is implemented before implementing ERP; it is better this way. ERP has advantages and disadvantages that accrue to it. With the ERP, time saving is a guarantee because a business in which this system has been implemented will take shorter time to make important decisions. Also, this system has a very minimal margin of errors in it. However, this system somehow reduced effectiveness temporarily because focus is first removed from the major things. Also, it is hard to customize processes in the business when this method is implemented (Walters 230). Question # 6: In the past, ICT was used as part of the many strategies and tools for boosting a business. ICT was just an ordinary tool just as advertising and marketing are. However, evolution in ICT has happened over the years, and it is now no longer “part” of the strategies employed; it is “the” main strategy. As a matter of fact, all the other strategies directly or indirectly fall under it. Nowadays, almost every process in the supply chain is consolidated into one, courtesy of ICT. This means that the supply chain can now be as short as manufacturer-distributor-consumer; no middlemen, because all a manufacturer needs to do is to sell the products to the distributor, who in turn opens a “intangible” shop from which customers shop and buy from the comfort of their houses, and all the customer has to do is to wait for the door bell to ring so that they can collect their consignment from the delivery man. A major development in strategic planning using ICT has been noted since the 1960’s, and it has become a major development for the infrastructure for entrepreneurship. According to the Porter's Five Forces and Value Chain Analysis, strategic planning of ICT is used to increase the competitiveness within the organization so that other relationships in the supply chain can be boosted. “The Information Systems Triangle " shows a strategy through which competitive advantage can be earned, ad ICT forms a major part of this strategy. The same applies to Critical Success Factors and Portfolio Analysis (Tan 189). Question # 7: In the past, organizations used to have “homegrown” ICT applications for use within the organization. However, the rate at which ICT has developed dictates that organization outsource for better and more professional ICT services for them to keep up with the growing competition. It has become very costly for firms to develop their own ICT services, and outsourcing is the only cheap option left. However, there is a good side to this, and there are several limitations as well. Outsourcing ICT services means getting them from vendors of the same who are professionals in that area. Insourcing is the direct opposite; making your own ICT services for use within the organization. A mixed approach involves combination of outsourcing and insourcing depending on the situation (Haselkorn 116). However, this is not to say that outsourcing for ICT services is the only way; there are instances where “in-sourcing” is a better way than outsourcing and vice versa. Cost reduction is the major reason why outsourcing is done, and therefore ICT services that are too expensive should be outsourced. However, the size of the firm matters. Some firms are very large and stable that they can afford to have their own ICT specialists to design for them the required ICT services, while some firms are not. Also, if the resources needed for the services are rare, the outsourcing is the only option. The frequency and length of use of an ICT service is also a determinant. It does not make sense to spend a lot in making a homegrown ICT service that will only be used once a year; outsource it. However, if it is a service that is used very often, in-sourcing should be considered. In some cases, you need a mixed approach to getting required ICT services. For instance, you can outsource them when they are cheap and flooded in the market and build your own when the prices are too high. Outsourcing is good in that it saves time and money especially for ICT services that take a lot of time and to develop. It is also very convenient to outsource, because the liability lies with the vendor. However, outsourcing is disadvantageous in that there are a lot of hidden costs in these services, and privacy of the organization is compromised. With insourcing, the organization’s privacy is observed, and there are no attached costs. Also, managerial control is not lost. However, it may not be possible to make the best quality services for the organization (Walters 121). Question # 8: A formal information system is where the role of the management in an organization is given key importance, and this role becomes the main role from which others like employee work order are derived. An informal information system is a system in which the employees are given the main focus, and almost everything is done to ensure better working conditions, better incentives, better relationships, et cetera. Public information systems are those available publicly, to individuals and organizations. Private ones are those that are only available to authorized parties. According to Davis & Oslon, the growth of ICT in organizations is likely to lead into more importance in the public and formal systems than in the private and informal ones. This is because they hypothesized that organizations would seek to cut down costs on IS and use public IS because it is either free or very cheap, and that stringent bureaucracy would dictate that formal IS be used. If this is the result, then decision making will be hindered because it will be done according to the wishes of a handful in an organization. Also, competitive advantage will be hard to attain because of the use of public IS (Irani 125). Works Cited Haselkorn, Mark. Strategic Management of Information and Communication Technology. Washington, DC: National Academies Press, 2007. Irani, Zahir and Love, Peter. Evaluating Information Systems: Private versus Public Sector. New York: Butterworth Heinemann, 2008. Tan, Felix. Global Perspective of Information Technology Management. Hershey: Idea Group, Inc, 2002. Walters, Bruce. IT-enabled Strategic Management: Increasing Returns for the Organization. Hershey: Idea Group, Inc, 2006. Read More