IT Systems Strategy of a Company - Research Paper Example

? IT Systems Strategy Of A Company - Microsoft Corporation, UK Table of contents Introduction 3 2. Key issues that would be likely to emerge if aninformation audit were to be conducted for Microsoft UK 4 3. Why issues of organisational structure or culture may affect information acquisition, availability, flow and exploitation in Microsoft UK 5 4. Why would competitive intelligence be relevant to Microsoft UK? 7 5. Conclusion – Recommendations in regard to the firm’s strategic choices over the next 5 years 8 References 9 Appendix 10 1. Introduction The expansion of globalization in all markets worldwide has caused the alternation of priorities and goals of firms in all industries. In the context of current market trends, the increase of a firm’s profitability cannot be achieved without a radical change in the methods used for managing information across the particular organization. The development of information as an element of competitive advantage is, primarily, the result of the continuous improvement of technology involved in various organizational activities. Under these terms, the firms, which are interested in achieving a long-term growth, need to ensure that they are able to capture, process and transmit information across all their departments. The above issue is set under examination in this paper. Reference is made to a particular firm, Microsoft UK. The information management practices of the above firm are evaluated emphasizing on the following issues: a) the effects of a potential information audit, b) the relationship between the organizational structure/ culture and the information management policies used by the organization and c) the value of competitive intelligence for the development of organizational performance. It is concluded that the development of the firm’s existing information management policies would help the firm to increase its competitiveness within the global market; moreover, the incorporation of effective competitive intelligence methods would also support the achievement of the above target. However, the firm’s existing structure and culture would need to be reviewed and updated supporting more effectively the relevant efforts of the organization. 2. Key issues that would be likely to emerge if an information audit were to be conducted for Microsoft UK In order to identify the effects of a potential information audit in Microsoft it would be necessary to refer primarily to the common needs and benefits of the particular process as developed in firms internationally. In accordance with Dube et al. (2005) information audit results to a series of benefits for the organization involved: the most important benefit of information audit is the improvement of a firm’s existing control systems (Dube et al 2005, p.12); moreover, information audit helps to identify the problems of a firm’s information management policies and to suggest information management processes which are more appropriate for the particular organization (Dube et al. 2005, p.12). However, despite its value for the organizational performance, information audit is a rather costly process (Lipman et al 2006, p.66). In this context, the ability of a firm to cover the relevant expenses cannot be guaranteed. In the case of Microsoft, no such problem is expected; the firm’s financial status allows for such initiatives; however, another issue would occur: is the information audit process attempted in Microsoft well planned? If the relevant plan is not carefully developed, the risk of a failure would be extremely high. From a different point of view, the success of information audit has been related to the IS skills of the employees engaged in the specific process; this is an issue highlighted in the study of Coderre (2009). For Microsoft, the above issue is not important; the firm’s employees are expected to be competent in regard to the management of IT systems. On the other hand, it would be necessary that the firm’s employees are able to understand the role of information audit in their organization; in this way, they will respond more effectively to the requirements of the particular process. In accordance with the above, in case that information audit is attempted in Microsoft the following issues would emerge: appropriate alignment of existing organizational practices with the specific process; alterations of the firm’s common operational policies may be necessary for the development of the particular activity. The level and the quality of communication across the organization would be set under examination – if they are satisfactory in terms of the needs of the specific process. No problem would exist regarding the cost of the project; rather, by developing such activity, the firm’s managers would be able to identify any gap or failure in the firm’s existing information management policies. Finally, conflicts among employees should be avoided; moreover, the allocation of tasks should be based on the employees’ skills and competencies but also on their ability to understand the needs of the relevant project. 3. Why issues of organisational structure or culture may affect information acquisition, availability, flow and exploitation in Microsoft UK Organizational structure can directly affect the success of knowledge management policies used by a particular organization. The close relationship between organizational structure and knowledge management is highlighted in the study of Khorsowpour (2004) where reference is made to a problem known as ‘knowledge acquisition bottleneck’ (Khorsowpour, 2004, p.341). The above problem reflects the ability of organizational structure to affect knowledge acquisition in one of the following ways: a) when there is a problem of narrow bandwidth (the firm’s existing channels for the transmission of information are narrow), b) when there is an issue of acquisition latency (when delays occur in the acquisition of information), c) in case of knowledge inaccuracy (when the information acquired is not accurate) (Khorsowpour, 2004, p.341). In Microsoft, organization structure favours the development of effective knowledge management systems; the firm’s operations have been categorized in regard to their role/ needs (see Table 1 below). The allocation of organizational tasks among organizational departments is clear; no delays are expected in the transmission of information across the organization. Operation Centers Role Location Licensing, Manufacturing, Operations and Logistics Dublin, Ireland Manufacturing Humacao, Puerto Rico, USA Licensing and Operations Reno, Nevada, USA Operations and Logistics Singapore Table 1 – Operation Centers of Microsoft (Source: corporate website, Facts about Microsoft) On the other hand, Oz (2008) notes that the effectiveness of knowledge management systems used within a specific organization is depended on the ability of this firm’s employees to choose the techniques and policies that are most appropriate for the relevant tasks (Oz 2008, p.446). It is at this point that organizational culture can affect the knowledge acquisition and flow across a particular organization; firms, like Microsof, which tend to allow employees to take initiatives are most likely to develop effective knowledge management systems (Corporate website, Facts about Microsof, 2011). Another aspect of knowledge acquisition is highlighted in the study of Firestone (2003): information acquisition can occur ‘through interpersonal methods, electronic methods or a combination of the two’ (Firestone, 2003, p.137). Employees have a crucial role – along with the firm’s IT systems – in the successful acquisition of information required for the development of various organizational activities. In Microsoft, emphasis is given on innovation along with the employees’ participation in the development of organizational projects (Corporate Website, Corporate Citizenship, 2011); therefore, knowledge acquisition, availability and flow in the particular organization are highly supported by the existing organizational structure and culture. 4. Why would competitive intelligence be relevant to Microsoft UK? Existing strategic choices of Microsoft UK can be characterized as quite effective; this assumption is based on the firm’s position in the global market – see the difference in the profits of Microsoft compared to its major competitor, Apple (Figure 1, Appendix) but also the market share of Microsoft compared to the other firms in the specific industry (Figure 2, Appendix). However, the stabilization of the firm’s position in the long term would be a challenging task taking into consideration the severe pressures on markets globally. Therefore, it would be necessary for the firm’s manager to monitor closely the key strategic decisions of their competitors at the level that these decisions would threaten the performance of Microsoft. The monitoring of the performance of competitors and the development of competitive strategies are key initiatives in the context of competitive intelligence (Vriens 2004, p.130) - see sample of a competitive intelligence graph in Figure 1, Appendix. In the literature, the competitive intelligence has been related to the improvement of control over organizational activities (Prescott et al 2001, p.221) but also to the stabilization of a firm’s performance towards its rivals especially regarding the global market (Blenkhorn 2005, p.218). Even if the firm’s current position in the international market does not indicate the emergent need for the development of competitive intelligence within the organization it is suggested that relevant initiatives are taken; the above suggestion is based on the view of Fleisher et al. (2000) who note that competitive intelligence programs are the most effective tools for guaranteeing the stabilization of the firm’s performance in the long term (Fleisher et al 2000, p.200). 5. Conclusion – Recommendations in regard to the firm’s strategic choices over the next 5 years In accordance with the issues discussed above, the potentials of Microsoft to develop an effective knowledge management framework are extremely high. However, there are certain strategies that could help towards the improvement of the firm’s knowledge management system. In this context, the strategic choices of the firm over the next 5 years should focus on the achievement of the following targets: a) improvement of the firm’s channels in regard to the flow of information across the organization (Aldrich 2007, p.61), b) emphasis on the development of the methods used for acquisition of information – reference is made to the acquisition of information through the personal contact of the firm’s senior managers with managers at lower organizational levels (Weick 2000, p.251); this policy would also support the improvement of communication across the organization and c) mechanisms should be introduced that would check the relevance and the appropriateness of information acquired, exchanged and process across the organization; existing organizational practices in regard to the management of knowledge in Microsoft are not clear. An independent department should be established focusing on the management of knowledge and the development of effective competitive intelligence plans; only in this way, the needs of the organization would be effectively addressed – referring especially to the firm’s performance in the long term. References Aldrich, H. (2007) Organizations and Environments. Stanford University Press Blenkhorn, D. (2005) Competitive intelligence and global business. Greenwood Publishing Group Coderre, D. (2009) Internal Audit: Efficiency Through Automation. John Wiley and Sons Dube, D., Gulati, V. (2005) Information system audit and assurance. Tata McGraw-Hill Firestone, J. (2003) Enterprise information portals and knowledge management. Butterworth-Heinemann Fleisher, C., Blenkhorn, D. (2001) Managing frontiers in competitive intelligence. Greenwood Publishing Group Khorsowpour, M. (2004) Innovations through information technology: 2004 Information Resources Management Association International Conference, New Orleans, Louisiana, USA, May 23-26, 2004, Volume 1. Idea Group Inc (IGI) Lipman, F., Lipman, K. (2006) Corporate governance best practices: strategies for public, private, and not-for-profit organizations. John Wiley and Sons Microsoft, Corporate website, 2011, available from http://www.microsoft.com/presspass/inside_ms.mspx#OperationCenters [last accessed on 20th January 2011] Oz, E. (2008) Management Information Systems. Cengage Learning Prescott, J., Miller, S. (2001) Proven strategies in competitive intelligence: lessons from the trenches. John Wiley and Sons Vriens, D. (2004) Information and communication technology for competitive intelligence. Idea Group Inc (IGI) Weick, K. (2000) Making Sense of the Organization. Wiley-Blackwell Appendix Figure 1 – Competitive Intelligence Graph – sample, monthly visits between the Star, Globe and Mail, and Sun (source: http://www.communemedia.com/blog/six-free-tools-for-world-class-competitive-intelligence/) Figure 2 – Profits of Microsoft, Apple and Google, for 1985-2009 (source: http://royal.pingdom.com/2010/04/09/the-money-made-by-microsoft-apple-and-google-1985-until-today/) Top Application Software Companies by Market Cap Company Symbol Price Change Market Cap P/E Microsoft Corporation MSFT 28.47 0.00% 243.58B 12.27 Oracle Corp. ORCL 31.60 0.00% 159.66B 23.76 SAP AG SAP 54.40 0.00% 64.61B 23.68 Salesforce.com CRM 140.84 0.00% 18.51B 256.07 Adobe Systems Inc. ADBE 33.91 0.00% 17.18B 23.07 Intuit Inc. INTU 47.40 0.00% 14.72B 26.83 Figure 3 – List of Software companies in terms of their market share (source: http://finance.yahoo.com/q/in?s=MSFT) Read More