Strategic Information System - Zara Organization - Case Study Example

STRATEGIC INFORMATION SYSTEM Introduction The information systems are looked upon to mechanize the operations for better efficiency, effectiveness and control although in themselves they do not corporate the profitability. Simply, they are used to provide the management with adequate and sufficient dependable information to keep a business smoothly running. The information system is composed of computers people that interprets or even process some information. Otherwise, the term is used in defining the software that is used to run computerized database or a computer system (Grant, 2010). Usually, the information system is used as an academic sort of study of the systems usually with some particular reference to information and complementary networks of software and hardware that organizations and the people use in collecting, creating, filtering, processing and distributing data. Any the information system normally aims at supporting the operations, decision-making and the management (Haav, 2009). The strategic systems usually are computer systems that normally implement the business strategies. They include the systems where the information service resources that are applied to the strategic business opportunities in a manner that the computer systems have a great impact on the organizations products as well as the business operations (Ulrich, 2010). The strategic information systems mostly are those that are developed in response to the corporate opportunities and the initiatives. The central idea usually comes from the business operational people and the information services that supply the technological abilities and the capabilities in realizing profitable results. Zara Organization Zara, one among the world’s largest companies of fashion had a simple and a unique type of focus in linking the customers demand to the manufacturing and consequently linked the manufacturing to the distribution. Their major issue has been related to the current information technology kind of platform that they use in operating their chain in the retail stores (Quintela Varajão, 2010). The business model could be split into three main components which are; capabilities, concept and the value drivers. The most fundamental concept has been maintaining the production, the distribution and the design that eventually would enable the organization to be able to respond quickly to the shifts in the customer demands. The value drivers for the organization conclusively are tangible and intangible as well in the benefits that are usually brought back to the stakeholders (Barzdin, 2011). Tangibly, the parent company of the organization normally has 11.02% of the net margin on the operations with their market capitalization. Their net working capital that is the current assets minus the current liabilities gives a significant amount of money. In addition to the above, its success could be demonstrated in the outstanding financial level of performance (Wang, 2010). Intangibly, the customers loyalty with the brand recognition primarily, has provided quite a big value to the organization. Indeed, the number of the customers that they attract has continually been rising with their brands synonymous at the cutting edge in the fashion at very affordable prices. The successful implementation of the companys business model gives a significant value to the stakeholders differentiating the business from others that have similar objectives. The information and the means of communication technologies with the protocols in the communication significantly differed from those of the competitors (Shea, 2010). The organization spent averagely less than 0.5 percent of its total revenue on the information technology and the employees for only 0.5 percent of the companys total workforce. This was different from those of the competitors that ranged 2 percent of the total revenue for the expenditure and 2.5 percent of the workforce dedicated to information technology. The Zara Company made good use of the human intelligence right from the store managers to the market research with the information technology like the PDA devices to be able to have a hybrid sort of information flow model from the stores to the headquarters (Yang, 2009). For instance, the managers in the stores used the handheld devices in sending some standardized information that required the customer’s feedback, as well as the ordering requirements directly to the in-house designers. It did not only keep the designers informed but as well provided an insight to the company on some less desirable merchandise (Pries-Heje, 2010). Unlike the Zara Company that relied on the hybrid model that incorporated the human intelligence and the information technology applications, the competitors ultimately relied on the information technology. The unique approach of the company in the human intelligence assisted by an excellent information technology solution resulted in well-managed inventories, reduced cost of the obsolete merchandise and the linkages between the demand the supply (Devos, 2014). However, there still exist a room for improvement in the information system processes in the realization of more adequate as well as effective management of the inventory categories and levels. Hence, the stated hybrid communication and information system that the company used provided a cost advantage to the company operations and even helps in abiding in their fundamental principles that have the capability to respond rapidly to variations in the customers demand (Andersen, 2011). The concept of the company, value drivers and the capabilities as they have been demonstrated in the business model clearly prove success in the company (Kautz, 2010). Their resistance to outsourcing, production capabilities and the concentration on the core operations of the fashion has made the company one of the best and successful clothing retail. In case of the global expansion of future sustainability and success should be drawn in the question (Torres-Coronas, 2009). There will be need for adopting the business capabilities in the product development, the strategic partnership with the cost production, marketing and advertising and the information with communication technologies to be able to adjust with the increasing global operations. Types of information system In as much as there are several other a different version of the pyramid model, the one that is most common probably is a four level kind of model that is based on the kind of the people who makes use of the systems (Brocke, 2013). For instance basing classification of the people that use the information system shows that many of the other characteristics such as the nature of the task and even the informational requirement are more or less automatically taken into account. For businesses, there exist a number of varieties for requirements of the information. The senior managers, for instance, need information to enable the business planning. The middle management requires more detailed sort of information to help in monitoring and controlling the business activities (Piazolo, 2013). As well, the employees will need the information to enable them perform their daily activities. As a result, the businesses eventually end up with several information systems that operate at the same time. Executive Support System: this type of the information system is designed to help particularly the senior management to make the strategic decisions. Usually, it gathers, summarizes and analyses the key external as well as internal information that is used in the business. It usually involves a lot of analysis of data and the modeling tools to help in the decision-making (Møller, 2012). Transaction Processing Systems: which are systems designed to process the routine transactions accurately and efficiently. A business usually has several TPS, for example, the billing systems used for sending the invoices to the customers and the systems to calculate payrolls monthly, weekly as well as the tax payments. Management Information System: this is majorly concerned with the internal sources of the information. It takes data normally from the transaction processing systems and, therefore, summarizes it into a series of reports for the management. The MIS reports are used by the management as well as the operational supervisors (Bajgorić, 2010). Decision Support System: these types of the systems are designed for helping the management to make the decisions in the cases where uncertainty is concerning possible (Rainer, 2011). Knowledge management system: this type exists in the business since they help in creating and sharing the information. Typically, they are used in the business where the employees come up with new expertise and knowledge that need to be shared by others in the organization in the creation of further commercial opportunities. The Enterprise Planning refers to the method of using the computer technology in linking various functions like accounting, human recourses and the inventory control across a particular company. It is usually intended to facilitate the information sharing, decision-making and the business planning in an enterprise (Jannesson., 2013). EPR enjoy a significant deal of popularity amongst the large manufacturers several years ago. When the idea of ERP was introduced, it appeared attractive as a solution for many companies since it offered many potential uses. The system, for instance, would be used to forecast a particular demand for a project, could order the necessary required materials, track inventory, allocate the costs, establish production and similarly, project primary financial measures. Normally, it acts as a planning backbone for core business processes in an organization or the company. Despite the above potential benefits, the ERP system has drawbacks (Leon, 2008). For instance, the system tends to be too large, expensive and complicated type of a system. The implementation as well requires such enormous commitment and time for company’s information technology within or even outside the professionals. The ERP affects the most significant department in the company since they create changes in the business process. To put up ERP, it requires new procedures, training of the employees with very close managerial as well as technical support. Therefore, many companies find the changeover into the ERP as a painful and a slow process (Ferran, 2008). After the completion of the implementation phase, some businesses usually have troubles to qualify the benefits they have gained from the ERP. The EPR systems typically make it easy to track the workflow throughout various departments. It reduces the operational cost that is involved in monitoring and duplicating data manually using the individuals, as well as disparate systems. Among the advantages that are associated with the EPR includes; complete visibility in all the most vital processes in various departments in any organization and especially for the senior management personnel. There is coherent and an automatic workflow from one department in an organization to another in the same setting that usually ensures such a smooth change and a faster completion of processes (Andersen, 2011). It also ensures proper tracking of all interdepartmental activities with none of them being left out. The EPR allows a unified and a single reporting kind of a system that analyses the status/ statistics in real time throughout all the functions and departments. Because the software is usable in all the departments, the individual departments find no reason to purchase their software reducing the expenses for the benefit of the organization. Additionally, some specific EPR vendors are able to extend their systems to provision of the Business Intelligence functionalities that give offers an insight into the processes of the business in identifying the potential areas of improvement as well as problems. The EPR has modules within such as human resource management, marketing and sales, finance and accounts, supply chain warehouse management the project management among others that are very important for an organization and its success (Ferran, 2008). The EPR system also provides better company-wide visibility enabling a faster and batter collaboration in all departments. It is possible to bring and integrate other systems to EPR system by Application Programing Interface and even the EPR system makes it easy for inventory tracking, order tracking, sales forecasting, revenue tracking among other related activities. Finally and not the least, the EPR systems are significantly helpful in management dispersed enterprise sort of companies globally. On the other hand, the EPR systems have disadvantages that include the following; The cost of the software, customization, planning, testing, implementation and configuration has been discovered to be too high. The EPR system deployments have been found to consume much time indeed; the projects may take 1-3 years or even more to completion and for it to be effectively functional. The customization that is little may not be able to integrate the system with business process. Consequently, much customization could slow down the project making it difficult to upgrade. Additionally, the participation is imperative in successfully implementing the EPR projects and hence, it requires exhaustive training for the user and the simple user sort of interface could be critical. The EPR project normally is difficult to learn and use. Additional indirect cost may crop up like of new IT infrastructure and those of upgrading WAN links (Brocke, 2013). Migration of the existing data into the EPR systems becomes difficult and sometimes impossible to achieve. Therefore, the activity might take much of the organizational time. On successful implementation of the system, it normally becomes a single vendor lock-in to enable further upgrades and customization. The organizations are normally at the discretion of the single vendor and at the time may not be able to negotiate effectively the services. Finally, the evaluation just before the implementation is paramount in the EPR system. If the step evaluation is ignored or not properly done, the implementation may turn to be a total failure. Software as a service (SAAS) usually is a software licensing as well as a delivery model that is silenced on the subscription basis and hosted centrally. Otherwise is also referred to as on-demand software. Typically, the users that use a thin client in a web browser access it. Recently it has become a very common sort of delivery mode in the business applications with the offices inclusive and the messaging software, the payroll software, management software and the development software among others (Brocke, 2013). ERP drawback solutions Perpetually, the most important reason for most of the companies to adopt and impliment the ERP system is because without the system, it is almost impossible for the company to remain competitive. Presently, the world of business is progressing closer towards the use of a completely collaborative model meaning that the companies need to share every bit of their information with their suppliers, customesr and distributors (Ferran, 2008). It is due to this reason that those who sell the system have come up with a new generation EPR software that is easy to install, more manageable, that requires less implementation time and it entails lower start up costs. The systems are made in such a way that they are more modular and allows installation to be done in smaller increments with less support from IT professionals. Businesses may also opt for the outsourcing of their ERP needs to those who provide them with the software (Ferran, 2008). The vendors may also opt to supply the technology with a fixed price and provide all the required support services to their customers. The option proves to be cheap and easy for the organizations to adopt than buying and implementing a new system (Jannesson, 2013). The vendors may also opt to make the software available to their clients through the internet of which it will make the system to be accessible to smaller businesses. The use of pre-tested and pre-configured versions of the software may also lead to the reduction of the project cost and complexity. Organizations must also try to implement a set of uniform business related applications and also have consisted data definitions across all the business units for the system to work effectively across the world (Jannesson, 2013). Conclusion Using the information systems requires an effective understanding of the management, organization and the technology that shapes the system. All the information systems should be described as the organizational solutions to the challenges that are posed by the environment. Alignment of the information systems plans in association with the business plans is essential for the improvement in the business performance (Fox, 2013). New technology comes with others that operate in the programming languages, libraries, database, operating systems, proprietary and open source of software and the small tools that usually assist the development teamwork efficiently (Gibson, 2011). As the globe of the information and technology continually moves forward, there still exist constant challenges by the innovations and the capabilities that will always disgust and amaze us. The new capabilities and the powers that come along with the new technologies especially in the business sector will challenge the people involved and so will require a new thinking (Tsiakis, 2014). The businesses and the individuals need to be quite aware of the constant changes and the demands on the information and technology and so be prepared for them adequately. References Andersen, K. (2011). 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