A Successful Strategic IT System - Saudi Zinnat Company - Case Study Example

A case study: a successful strategic IT system The role of a properly developed information technology system is critical for companies to compete inthe current global business environment. One of the main factors which can lead to competitive advantage for a company is its technological capability. A successful information technology system is essential for enhancing the performances of an organization as well as for adding value to the organizational capabilities in order to make it technologically advanced and competitive. The research is conducted with the aim of identifying the current practices and the best practices for strategic information technology systems in different companies, especially in the manufacturing industry of Saudi Arabia and to incorporate these information technology best practices in a company named Saudi Zinnat Company. Saudi Zinnat Company is a company operating in the manufacturing industry of Saudi Arabia. The company does not have any established strategic information technology systems but there is the need and scope for setting up strategic information technology systems. Therefore, the research is done to identify the suitable practices that are being followed for strategic information technology systems in different companies across the manufacturing industry in Saudi Arabia. The identification of the suitable strategies and practices would help in incorporating these strategies in the Saudi Zinnat Company according to the feasibility of the implementation processes. The project managers from different companies operating in the manufacturing industry are interviewed with the help of the defined questions to document and evaluate the practical experiences and the views of the project managers regarding strategic information technology systems. The interview with the project managers is carried out by the researcher. The nature of the interview is exploratory in which the researcher tries to create a semi-formal and encouraging atmosphere of informal discussion with the information technology project managers. The researcher starts with simple, to the point questions and then goes on to explore the views of the respondents on the basis of their answers to each question. The researcher also plays the role of a moderator and helps in steering the interview in the right direction to attain the aims and objectives of the research. The responses of the selected group of project managers are documented and analyzed carefully to interpret them and get suitable findings. These findings are then tried to be implemented to the chosen organization, Saudi Zinnat Company with an aim to set up a robust strategic information technology system in the company. The strategic importance of information technology systems is a debated topic among the researchers and academicians. According to some researchers, the strategic importance of information technology systems in companies is very high whereas according to some others, the strategic importance of information technology systems in companies is moderate. However, most scholars and practitioners in the field of information technology and strategic management have unanimously agreed to the fact that there exists at least some degree of relevance and importance of information technology systems for the strategic management of an organization, irrespective of the industry to which the organization belongs. A strategic information technology system helps in strategic management and is a salient feature of the strategic management processes of different organizations. Strategic information management is considered to be of critical importance in helping the companies to process, segregate, store and transfer information in a safe and value producing manner. The use of suitable information technology systems help in providing the companies with appropriate tools to applying suitable metrics to the huge information repositories present within the companies. This further allows for the recognition of forthcoming opportunities that would support the growth and strategic development of the company. These also help in identifying and helping in decisions relevant to enhancing the performances of the company at different levels. (Source: McQuiggan and Sapp, 2014). The selected project managers of information technology systems are asked a key question in order to identify the degree to which the information technology systems are strategically important in their respective companies. Thus, the first question of the study is “Do you think information technology systems are strategically important in an organization. Why and how?” The responses of the project managers have been unanimously directed at a positive answer. According to 90% of the selected project managers, the role of information technology systems has been highly beneficial for their organizations. They think that information technology systems are essential in the modern world because they assist the employees from the grass root level to the senior most level regarding a number of key decision making processes. Also, the information technology systems like Enterprise Resource Planning (ERP), Management Information System (MIS) and some other key information systems have emerged as strategically important tools for decision making as well as for the efficient functioning of different departments of an organization. Many of the project managers also indicated that the main aim of the strategic information technology systems is to facilitate strategic planning and strategic management in the respective companies. The project managers also identify the importance of suitable management of the information systems and indicate that the mapping of the resources and capabilities of the organization with the technical needs often leads to the possibility of setting up a robust strategic information system which can benefit the company in a number of ways. It can be concluded from the answers of the project managers that the strategic importance of information technology systems is very high in the present business environment and these systems can be expected to assume more critical roles in the future as well. As per the project managers, the importance of strategic information technology systems can be well identified in the competitive positioning, internal situation and business portfolios of different companies. As per Langer and Yorks (2013), risk management is considered to be an extremely important function of strategic information technology systems (Langer and Yorks, 2013). The strategic information technology systems are aimed at identifying future risks and in providing tools for planning for the risk. Risk management involves planning in advance for avoiding risks, for mitigating risk issues as well as having ready strategies and ways to control and manage risks adequately. The question is asked to the project managers that whether the strategic information technology systems are efficient in managing risk in their organizations. According to the response of the project managers, it can be established that strategic information technology systems play a major role in managing risks effectively. The project managers identified that the use of suitable strategic information technology systems in their organizations have made the organizations more capable and ready to face and mitigate the risks. According to 80% of the project managers, the operations of their companies have improved to a considerable extent after the implementation of the strategic information technology systems .Also, the actual risks faced by the companies have become much lower than the forecasted risk levels for the companies. The project managers are of the view that this can be accredited to the implementation of robust strategic information technology systems in their respective companies. It can be identified that since the loopholes and drawbacks in different business systems can be easily identified through the use of proper strategic information technology systems; these systems play an influential role in negating the scopes of risk in the business. The fact that the use of competent strategic information technology systems makes the errors more easily identifiable indicates that the risks caused in the business can be lowered because the chances and numbers of errors are automatically minimized through the use of suitable information technology systems in place of manual systems. A properly developed and detailed strategic information technology plan is identified to be critical for the development and maintenance of robust strategic information technology systems. The strategic information technology plan helps to identify the gaps in the business and helps in identifying the core benefits as well as the drawbacks of strategic information technology systems in the organization. Woody (2013) says that the strategic information technology plan is very important in different companies and should be prepared before the establishment of the strategic information technology systems so that these systems can perform at the expected level and can be managed efficiently (Woody, 2013). This would also help to identify the viability of the strategic information technology systems with a consideration of the available technological and other resources and capabilities that would support the establishment and the functioning of these strategic information technology systems. The strategic information technology plan takes into account the availability of suitable and sufficient information, applications, personnel and infrastructure within the organization that would support the setting up as well as the continued functioning of the strategic information technology systems. The strategic information technology plan is devised and implemented in different phases. The common phases in the strategic information technology plan are the strategic actions which are aimed at achieving the information technology as well as the strategic objectives of the company, the suitable metrics to evaluate and review the performances of the strategic information technology systems and the pre-defined targets that are set in order to act as a standard while evaluating the performance of the strategic information technology systems within the organization. Therefore, a question is asked to the project managers to identify the importance of strategic information technology plan in the proper incorporation of a successful strategic information technology system. The question asked for starting this discussion is “Is it necessary to have a properly placed strategic information technology plan to ensure that the strategic information technology systems are implemented and maintained efficiently?” The responses the project managers indicate that the practical importance of the strategic information technology plan is high with respect to the success of the strategic information technology systems. According to the project managers, the formulation of strategic information technology plans has helped in making the strategic information technology systems more robust and effective in their companies. Also, the project managers are of the view that without a suitable strategic information technology plan, it is very difficult to steer the working of the strategic information technology systems in the necessary direction and to extract the complete benefits from these systems. As per the opinion of the project managers the combination of the strategic plans and the tactical plans for information technology systems help the project managers to work in coordination with other departments and managers which results in the strategic information technology systems being more efficient in catering to the exact requirements of the managers from various departments. This also helps in streamlining the overall operations of the strategic information technology systems which is extremely beneficial for the performances and the operations of the various business units of a company. As per Axelrod (2013), security of the information technology systems is considered to be the most critical risk associated with the use of strategic information technology systems (Axelrod, 2013). The information technology systems in a company often contain wide volumes of sensitive and confidential data which if leaked outside may lead to huge financial and reputational losses for the company. The security of strategic information technology systems is thus a critical issue that is faced by companies across the globe. The project managers of information technology projects in various companies are striving on a continuous basis to protect the confidential information and data repositories through the development of highly secured and protected strategic information technology systems. So the question is asked by the interviewer regarding the practical importance of the security and risk management of strategic information technology systems that the project managers have recognized in their day to day job. The question asked to the project managers in this phase of the interview is “How far do you think security is critical for strategic information technology systems in your organization?” The project managers are of the view that security is by far the biggest challenge that is being faced by them while establishing and maintaining the strategic information technology systems in their respective companies. According to one project manager, the threat of data theft has become so high in various industries, that the companies are looking for more stringently secured strategic information technology systems/. He also says that one of the primary considerations that are given to evaluate the capability of a strategic information technology system is their security efficiency. The more secured a strategic information technology system is, the better it is for practical usage. This is because a highly secured strategic information technology system would automatically reduce the vulnerability of a company to leakage of information, data theft and cyber-crimes. The views of the other project managers are in line with this response. Only designing a robust and high performing strategic information technology system is not enough. The companies have to consider the available resources and capabilities that they can use to support the functioning of the strategic information technology systems. As per Jacobs (2014), without the continued availability of technical and physical resources and capabilities, there are high chances of strategic information technology systems faltering in their application (Jacobs, 2014). Strategic information technology systems are aimed at improving the overall efficiency and competitiveness of the companies by suitably aligning and monitoring the business processes and providing suitable information to the managers to support the decision making processes. Information Resource and Technology Management (IRTM) is an important area of consideration in all industries. In this respect, a key question is asked to the project managers to understand the basic requirements for applying strategic information technology systems in an organization. Thus, a question is asked to the project managers to understand the importance of availability of resources and capabilities for setting up an efficient strategic information technology system. According to the project managers, the variability of key technical, financial, physical and human resources is critical for deciding the future success of the strategic information technology systems. As per the response of the project managers, technical resources and human resources are the most important resources needed for the proper implementation of the strategic information technology systems in a company. The project managers also stress on the point that the available capabilities and resources of a company should be mapped with the requirements of the strategic information technology systems with the use of a strategic information technology plan before the actual establishment of the software systems. This would help to reduce any future discrepancies in the company related to the successful implementation of the strategic information technology systems. The effective use of information system requires some basic understanding of management, organization, and also the incorporation of technology into the system that ultimately contributes towards shaping the systems. Many people in an organization are involved in the framing of successful strategies so as to implement the IT project in the most efficient manner. The company that has been chosen for the research study is a fictitious one located in Saudi Arabia, known as Saudi Zinnat Company. The company is into the manufacturing industry and requires the effective use of IT systems so as to reduce the manual work and in turn eliminate the possibility of errors. According to Sweeney (2010), in the present scenario the need of information system has become more prominent majorly because it helps an organization to grow as well as survive in the competitive industry. As per an interview conducted in three organizations located in Saudi Arabia from the manufacturing industry, one of the project manager said – “Information technology helps in today’s scenario is not only essential for making tasks simpler but it also plays a critical role in integrating with the business strategy.” This states that incorporation of strategic IT systems is an essential tool for all the business managers. Strategic planning of information systems is becoming important as there are initiatives taken so as to leverage the IS applications in the company for the purpose of reengineering the processes involved in business, improve upon the level of efficiency, to effectively compete in the industry and to achieve a competitive position in the industry. One of the project managers in a renowned company of Saudi Arabia stated that- “project planning essentially means to us collecting data, studying the basic needs and then designing a system, and then finally I along with my team have a discussion on selecting the best tools that would help us for the successful implementation. This indicates that strategic IT system needs to be upgraded on a continuous basis and also appropriate incorporation of new technologies in order to be aligned with the needs and requirements of the business (Sweeney, 2010). According to Lientz (2010), the information system is a strategy that is used by an organization so that it aligns with the basic requirements of the organization. There are proper evaluation methods that need to be used by the management so that such methods are feasible for long run. It can also be stated as the demand for the IT systems in order to support the business strategy and at the same time gain competitive advantage. The strategy for information systems should be such that it is aligned with the needs of the business in the future context. The IT executive when interviewed said that- “My role is to design and implement the information system and the executive committee or rather the business managers take the initiative of providing me with the opportunities and business directions.” This indicates that IT project is often divided into various sub parts where the supervisors or the executives of the project are involved in the designing phase of the system and before the implementation phase is reached there is active participation by the business managers so as to be ensured that the system is aligned with the future needs and opportunities of the business. The strategy that is used for implementation of the system also should encompass the level of investments that would be required in the investment portfolio. The planning of the strategic information systems is considered to be a process that identifies the basic requirements of the information system of the higher level of an organization. It can further be defined as a portfolio of applications that are computer based that would support a business in terms of executing their plans and also realizing their future goals. It is very essential that the IT professionals before developing the framework for the information systems should develop a framework for information system planning. This planning in turn would be able to include the essential elements in the information system strategy in order to be aligned with the business strategy. The IT project head of a manufacturing company said that – “A project we had undertaken so as to resolve the issues with our suppliers and to facilitate more of delivery within the time schedule but the project failed because the planning phase of the project did not involve the business heads who could assist us with the implementation of the system. As a result we missed on some of the essential facts which were not possible to be included in the later phase of the project.” This states that project needs active participation by all the members and most importantly it should have a distinct planning phase that would facilitate incorporating the most critical elements of the business objectives. There are various phases that are involved for the effective planning of the strategic information system in the organization. The first phase of the project should be setting the initial purpose, scope and process that is to be followed in the IS strategy. The next phase is the phase of IS planner which comprises of an in-depth analysis of the needs of the business, information needs and business processes. The phase three comprises of a well-defined IS plan that would be generated by the IS planner for an organization. This phase takes care about the pre-requisites which should be given equal importance and not ignored in the process so that an effective strategy is formulated that would work for the future. The next phase encompasses the planning framework of the information system providing a documented strategic plan for the information system with the help of IS planner so as to explore as well as examine some of the critical elements of the organization. This phase would even facilitate the IS planner to devise a strategic plan for the information system that would provide a right direction (Lientz, 2010). According to Erwin (2014), over the last decade the major concern of the managers is to align the information system with the strategic goals of the organization. The term alignment can be further defined as the positive relationship that should exist between the performance level in financial terms and the information systems that exist within an organization. The below given diagram clearly shows the linkage between the external and internal components of an organization- (Source: Erwin, 2014) In terms of information system the skills, architecture and processes that are involved in the designing phase of the system has a direct linkage with the external features such as that of the technological scope that these systems gives to the organization and the systematic competencies that such an architecture possess. The IT executive in the interview said that – “My Company gives its customers the first priority and this forms the base of all our strategies. We act in such a manner so as to provide the best of practices in the organization and the best solutions to our customers.” It is very important for any business to give importance to its users may that be to the end users or to the key personnel who are involved in the business process. The IT solutions needs to be designed in such a manner by the project head so that it is beneficial not only for the organization but also is beneficial for the customers. A project head even said during the interview that – “Most of the solutions that we involve in the IT strategic planning are all the solutions of higher level that is available with the aim of securing the business activities and to reduce the overall risk that hinders the business process.” Thus it can be stated that strategic IT planning reduces the level of risk in the system and increases the competency level of the business. In Saudi Arabia and also across the globe it can be stated as per the interview that information system in today’s scenario is considered to be a tool that gives competitive edge to an organization only if it is properly designed and implemented. As given in the above multidimensional model if the system is successfully implemented then it would enhance leveraging of the IT resources at a more regular basis so as to facilitate competitive advantage in the industry. However all this planning and implementation phases are dependent on setting vision and goal of the business which would in turn result into an alignment between the business and information system so that there is smooth flow of operations within the system. In many organizational structures the framework of information technology is in a centralized format so as to enhance more of control on the information flow which would provide an outcome in the form of appropriate power structure in the organization. The benefits of an information system is two-fold as stated by one of the project manager- “IT helps to structure an organization and at the same time it makes the decision making centralized to a certain extent as it enhances more capacity in terms of processing information.” The IT system helps in making effective decisions as a wide array of information can be easily accessed and also at the same time those information can be upgraded as and when required by the different departments who are involved in the business decision making process. A project in-charge said- “As there is new strategies and rules formulated by the management, we as the IT department in charge need to make the require changes in software and hardware, and even in the databases so that the management can access the information which they need.” This indicates that implementation of IT in the system is not the only task that is performed by the project managers but they need to be continuously aware of the new changes that are made by the management so that the software is fully upgraded (Erwin, 2014).This forms a very crucial factor of successful strategic information system. The system needs to be designed in such a format that the necessary changes can be incorporated as and when required. This can also be stated as there should be no such limitations that would restrict the framework to bear any such changes that can be made in the future for the benefit of the organization. One of the most important question that was asked in the interview process was how does the IT department of a company manage such on-going changes. In response to which one of the project heads said that-“I had joined this organization few years back and had noticed by seniors follow an effective strategy that I use today along with my team. I involve management in the designing phase of the project and before the framework is finally implemented we have employed a pilot testing so as to check that whether it aligns with all of the business processes. We do not keep any flaw in the development phase and have divided specific teams for the entire purpose. There is one team who takes care about the development and planning of the framework, one team works along with the management so as to incorporate their opinion, one team is employed for the implementation of the system and finally one team is there to have a check on the entire process and incorporate the necessary changes as changes are made in the business strategies.” This indicates that successful implementation and formulation of information system requires an effective management of the entire team where the group is such divided that there is no overlapping of responsibilities and they need to work in collaboration with each other. According to Kirk (2012), it is very essential that the IT professionals be involved in the business planning process and simultaneously the business managers should be involved in the process of IT planning. At the planning phase only it should be ensured that the objectives of the organization are being met efficiently. The alignment can only gain success when the capacity of the organization is such that it can bear such a change. In successful strategic IT systems it is very important to implement specific performance measures and evaluate the performance at each stage of the implementation process and even after the process (Kirk, 2012). Application to a business case The findings can be suitably applied to the Saudi Zinnat Company. The finding that the strategic importance of the strategic information technology systems is very high indicates that it is essential to set up functional and efficient strategic information technology systems in the company. Also, the process of implementation of the strategic information technology systems should start with devising an extensive strategic information technology plan in the company. Suitable project managers should be appointed in the company whose job role would be to implement the strategic information technology systems in the company. The plan should include a consideration of the available technical, financial, physical and human resources in the company so that the strategic information technology systems can be supported by these resources and capabilities. While incorporating the strategic information technology systems the company should focus on ensuring high security and data protection to prevent any kind of future discrepancies, loss of data or secured information from the business. A proper strategic information technology system would help to improve the strategic management of the company and also help in risk management in the business. In the research study there are certain key findings that can be proposed for the Saudi Zinnat Company. The major focus of the company should be on effective planning of the information system framework. The framework needs to be designed in such a manner that would help the company to counter not only the present issues but should also possess the flexibility so as to incorporate all the necessary changes in the future. As stated by some of the professionals in the interview the major task that needs to be performed by the IT department is to involve the top management in the development phase of IS framework. In order to do so the most important step that needs to be taken is to form teams and work along with the management. If the IT professionals be indulged in the formation of corporate strategies then it would help them to analyze the basic requirements that should be incorporated in the design that they propose. On the contrary if such a step is not included then proper alignment between the business objectives or goals with that of information system cannot be achieved. The alignment would be very necessary for the company as it would facilitate meeting business goals and also would support taking effective decisions that would be beneficial for the company. The company with the use of technology would be able to gain competitive advantage with faster processing of information and also as the same time the system would become centralized that would facilitate easier accessibility of information. The company operates in one of the most intense competitive markets of Saudi Arabia. The structure of information systems would be able to eliminate major risks of the external environment and at the same time would enable the organization for future growth and development. As per the interviews conducted on different IT professionals it is evident that in order to maintain a successful framework of IT in the organization it is essential that this manufacturing company should focus on performance indicators that would help to measure the level of performance. If the performance level is as desired then further implementation on the set framework would be carried and if the level is low then the department needs to monitor as well as incorporate the necessary changes to make the IS structure efficient for the organization. This constant evaluation would enhance the competitive advantage of the company as well as it would form a backbone for the company for its operations. One of the most important aspects that have been derived from the interview is that information technology should not only encompass the needs and requirements of the business but should also provide the best of solutions for the business customers. An effective planning and incorporation of all of the phases of implementing the system would result into strategic IT system in the company. References Axelrod, C. (2013). Engineering safe and secure software systems. Boston: Artech House. Erwin, K. (2014). Communicating the new how to make the complex, unfamiliar or still-fuzzy understandable to others. Hoboken, NJ: John Wiley & Sons, Inc. Jacobs, J. (2014). Data-Driven Security Analysis, Visualization and Dashboards. New York: Wiley. Kirk, A. (2012). Data Visualization a successful design process. Birmingham: Packt Pub. Langer, A. & Yorks, L. (2013). Strategic IT: best practices for managers and executives. Hoboken, New Jersey: John Wiley & Sons. Lientz, B. (2010). Breakthrough strategic IT and process planning. Hackensack, NJ: World Scientific. McQuiggan, J. & Sapp, A. (2014). Implement, improve and expand your statewide longitudinal data system: creating a culture of data in education. Hoboken, N.J: Wiley. Sweeney, R. (2010). Achieving service-oriented architecture applying an enterprise architecture approach. Hoboken, NJ: Wiley. Woody, A. (2013). Enterprise Security a Data-Centric Approach to Securing the Enterprise. Birmingham: Packt Pub. Read More