Fundamentals of Information and Information Systems - Case Study Example

 Table of Contents 1. Case Study 2. The ESS Information System at HP 3. Executive Summary 4. Introduction 5. Literature review of IS systems and Application to the ESS/HP example. 6. Background of IS and SIS 7. Application to HP/ESS 8. The problems associated with the role of IS in organisational activity of ESS 9. The role of ESS and its own survival as an information system 10. Towards some conclusions 11. Reflective note 12. References Executive Summary This report pertains to the current information system position of Hewlett Packard (HP),its current business problems and the way ahead for this business through the efforts of ESS information system whose future based on its usefulness is itself at stake.My first impression at the outset of ESS (E-Services Solution)group is to point out that this venture may be successful at the outset given the period 1999 until 2000 but it has all the ingredients of becoming a victim of its own success and potentially damaging the work culture of HP with the so called aim of “infecting” the entire spirit.The primary reference for this report is a Case Study (2000) prepared by the Stanford University pertaining to HP’s ESS information System experience.1 Introduction The concept behind e-services is there’s a particular task, asset, or capability that you want to gain access to, that now can be made available to you over the Net, because it’s now being created as an Internet service. ––Linda Lazor, Director of Operations, ESS, Hewlett-Packard (See Case Study 2000) This report pertains to the current position of Hewlett Packard (HP) Information Systems, its current business problems and the way ahead for this business organization. My first impression at the outset of the ESS Information System (E-Services Solution)group is to point out that this venture may be successful at the outset given the period 1999 until 2000 but it has all the ingredients of becoming a victim of its own success and potentially damaging the work culture of HP with the so called aim of “infecting” the entire spirit.(see Case Study 2000).I would reach such a bleak conclusion for many reasons which I will discuss below but the pith and substance of my analysis as a management consultant is that “small is beautiful” but once it gets large it becomes ugly. And this is true for HP’s future if the ESS information system which is under discussion here is allowed to grown into its organizational management and Information System culture. It can be seen that in 1999 alone through the efforts of the ESS Information System,HP has achieved the status as a leading manufacturer of computer products, including printers, servers, workstations, and personal computers and is generating a revenue of $42.4 billion and net income of $3.1 billion.It has over 80,000 employees worldwide and a strong local presence in Silicon Valley and the Bay Area. The problems of HP and the role of ESS.The case study has given us a bird’s eyes view of the historical problems with the management strategy of HP as follows. 1. In 1939 Bill Hewlett and Dave Packard, found HP and were an instant success with their venture and wanted to pursue their own unique way of doing business: “The HP Way.” The evolution of the HP Way began early. Even though their decentralized management information system style was a success in the earlier dealing and by 1957 Hewlett and Packard had their own corporate objectives, underling the “The HP Way” through management strategies like Management By Wandering Around, Management By Objectives, and the Open Door Policy inspired later additions, including Open Communication and Total Quality Control .These practices cannot be seen anywhere today and later on the conservative attitude of the HP information system management with in a decentralized company was more product oriented than customer oriented.(refer to Case Study 2000) 2. At this point HP’s corporate software and support division and corporate systems division was united into a single information system and put under the control of Ann Livermore to run this new Enterprise Computing Solutions Organization (ECSO), a unit with $15 billion in revenues and 44,000 employees who in turn hired Earle in to develop a marketing strategy for the enterprise group.(refer to Case Study 2000). 3. Also now HP was facing tough competition from its rivals Sun Microsystems and IBM, which had fiercely launched high-profile Internet marketing campaigns, and Sun had a leadership role in the industry, using the tagline “we put the dot in dot com.”. 4. The ESS information system analysis concluded that the root of the problem was a marketing weakness.HP was already in the Internet space but hadn’t communicated it well. The new strategy of HP was to promote an era of electronically delivered services or “e-services.” and through these e-services, there would be further.transactions, and the partnerships that provided them. HP’s role would be to market its infrastructure, services, and appliances as e-services with a network of partners.This involved the ESS launching a major branding campaign contrary to the traditional decision processes 5. The new mantra of the ESS information system strategy was to gain an amalgamation of the paths of services, appliances, and infrastructure, which once crossed would bring about a production boom.This would essentially mean that the ESS information system group would provide on behalf of HP a “ product or service, the network infrastructure, billing, security, etc. It would mean that either HP would provide the enabling technology or partner with someone who could. Building this “keiretsu” or ecosystem of partners would allow HP to provide services or technologies it didn’t have in house and would attract more partners who wanted the plug and play solutions HP was lining up.” (Source :HP Case Study:2000). Literature review of IS systems and Application to the ESS/HP example. IS are an essential part of the emerging business landscape which is pretty much inundated by rapidly changing technology with each passing day(Heeks 2006 ). IS are important because information tends to become vague and complicated and very often it can be that Organisational Activity will demonstrate a lack of quality in the information(Heeks 2006 ).2 A good IS system aligns itself with the management strategy and the structure of a Firm and allows the timely response to changes recurring in the business environment and competition issues.3 Wiseman (1985) has defined a good strategic information system as, "The information system to support or change enterprise's strategy."4 The general perspective of Information management involves a reference to the management of any kind of information .This may involve document management, electronic document management records management, document imaging, process automation and digital asset management.(Wiseman 1985) Background of IS and SIS Historically information management was subject to the nuances of bureaucratic procedures and had a limited role in management decisions.(Galliers 1991).The potential of profit by information management systems has only emerged in the recent decades and the modern businesses view information as a weapon against competition and a strategic resource. (Galliers 1991).The former attitude changed radically in the mid-sixties when organisations started viewing information as a tool for general management support. Until the decade of the eighties however information management was limited to weekly financial and management reporting and accounts of inventory and arrears.(Galliers 1991) During the early nineties these information systems emerged as serving a special purpose. At this point information systems like decision-support systems (DSS)5 and executive support systems (ESS)6 became popular with the main aim of support and the fast expedition of the decision-making process of organisations (managers and executives). (Swatman 1995). In the recent times Information has emerged as a strategic resource to gain competitive advantage, as well as to defeat and frustrate the competition. (Porter 1985).An important example quoted by Porter (1985) of information management is the Paperwork Reduction Act of 1980 the philosophy behind which was to manage information by requiring federal government agencies to develop an information resource officer’s role. Such systems being an integral part of IS ensure the organisations survival in the fast track corporate world. (Heeks 2007a) Porter(1985) has also identified a value chain model to help identify problem areas in information systems in order to supply a strategic advantage. Porter (1980) has also identified the competitive forces model which describes a number of external threats and opportunities which can be countered by competitive strategies. See below for a model diagram of both these concepts. The potential of information systems is immense as it can be developed to not only defeat rivals but also to counter the pressure from competing substitutes and an increasingly demanding consumer base. The value chain model above ( Porter 1985) shows certain activities in the business where competitive strategies can be applied for a successful strategic impact on the business management. The model presents how the firm involves in a chain of activities to add the required margin of value to a firm's products or services. Application to HP/ESS It can be seen from the case study that IS has become a critical factor to HP’s success and has evolved in the medley of their business philosophy and alignment of business policy and information culture to facilitate the means by which information can benefit businesses. As a critical, integrated part of a general management framework it remains a vital lens through which all major management decisions can be viewed.7The HP’s IS systems involve the definition and foundation of business missions based on the consumer demand, during the establishment of the core processes for the successful accomplishment of these missions. Furthermore the decisions based on the IS system have guided mission delivery processes. The diagram above pertains to the cycle of SIMS (Systems Information Management)-(Based on the CIPSO model) The awareness of intellectual property rights and increased litigation together with the advent of information ecology, enterprise portals, security and privacy has led to highly developed IS systems.8Information technology has encouraged the development of IS and has heavily influenced organizational activity. HP today faces more competition today than almost three decades ago. Today the key to the success of any successful enterprise relies heavily upon the right mixture of organisational resources brought together to achieve an edge in the marketing of the products and information is an essential ingredient in this regard. (Kirk 1999) The strategic future management of IS at HP will thus involve the identification and effective utilisation of information to play a large role in an organization's achievement of competitive advantage. Effective gathering, processing, and dissemination of information allows for massive business success for an organisation as evident from the policies of the new management of HP.(Kirk 1999). The diagram9 below shows how HP (based on the CIPSO model) can strategically manage information resources to gain a deeper insight into the benefits that can be derived from IS .Highly developed IS systems like the ESS group at HP have led to more technologically literate organisational management success.(Kirk 1999) At HP ,the ESS has made their task easy by the utilisation of the informational content of records. This can in turn help decision making and there is no longer a need for managers to concentrate on the evidential qualities of the information records (Wiseman 1995).However now that the ESS wants to transfer its IS strategy to the rest of the HP ,it is found to have little hospitality amongst the unprepared segments of organisation (for example records managers) as the advent of these new forms of management have led to a re-evaluation of the organisational roles and structures. This is mainly because the conventional management of static information resources is being replaced by the new found “information in motion”. (Heeks 2006 ). However the advent of ESS style information management is not entirely without its downside here at HP as it has give rise to preservation and access issues as observed by Burk and Horton(1991).Burk and Horton (1991) have also identified five main stages in the history of information management which show the shifting focus of information work towards an increased strategic use and application of the information itself. These stages are paperwork management, management of corporate automated technologies ,management of corporate information resources ,business competitor analysis and intelligence ,strategic information management. As evident from this model ,the modern developing theory is the last stage i.e. IS which places great emphasis on the quality of decision making and the utilisation of information to emphasize the quality of decision making. (Heeks 2006 ) Thus the way ahead for HP IS management would be to provide a linkage to the functional business strategies like manufacturing, research, and development and thus IS management for HP becomes a top-management, strategic function ( Burk and Horton 1991). The problems associated with the role of IS in organisational activity of ESS Information Systems Management is not without its own set of problems and has often caused a failure to communicate between managers and technologists. Comprehensive knowledge of technology for organisational managers has become imperative to be able to exploit the benefits of IS systems and to be able to build upon the analysis and application of information in different organisational contexts. The concept of IS is still pretty much embryonic and it has emerged along with records and information management (RIM) and knowledge management (KM) while the at times nerving and complicated implications of digital information technology still pester organisations and their management. (Heeks 2006 ). Earl (1996) has made some interesting observations about the IS and SIS. He acknowledges the recent spur of IT companies and management consultants for the development of methods and techniques for identifying and agreeing investment in information systems which support business strategy and even create new strategic options. (Earl 1996).However in practical terms, Earl (1996) comments “Business strategies often prove to be a weak foundation upon which to build IS plans, planning methodologies turn out to be too complex or time-consuming or the official IS strategies are not implemented.” He goes on to define the “Five Common Approaches and their Pitfalls” which are identified in terms of Business led approach where he says that business strategy should not always lead Information Systems Strategy. For him the business led approach can fail if the business strategy is ambiguous in itself.(Earl 1996).The Method driven approach can be useful in identifying the gaps in business strategy but may offend the senior management of an Organisation who might feel that the IS strategy is over shadowing the business decisions.(Earl 1996).The Architectural approach which utilises analytical modelling and tools (e.g. computer-aided software engineering) to produce IS plans in the form of blueprints) has been criticised by Earl (1996) as taking large amounts of resources, including management time, and money. The Administrative approach involves the adoption of this approach to utilise their normal resource allocation procedures e.g. financial planning or capital budgeting but may still demonstrate gaps in administration. (Heeks 2006 ).In the case of ESS at HO there is the Organisational approach which allows companies that adopt this approach to “accept that IS planning is not a neat and tidy endeavour, but instead requires a true partnership between the IS function and the organisation. One could call it the “themes-with-teams’’ approach, since the firms focus on a limited number of themes with clear deliverables and then use teams to identify business change projects and IT applications.” Earl (1996) has endorsed the last approach (Organisational Approach) and believes that “strategy analysis techniques to discover IT applications that will yield a competitive advantage; using formal planning methods and information engineering techniques; and assiduously following resource-planning and project-control procedures.” In the defence of ESS as a highly developed IS system it can be said that many proponents of the IS have emphasised upon the creative use of information rather than the technology to create, transmit, and present that information. One of the most positive aspects of sound strategic management by ESS concerns its flexibility to new challenges. Kirk(1999) has suggested that since the work of managers at Organisations like HP is very information-intensive and the environment in which it is done is very information rich it should not be overlooked whether this wealth of material is being fully utilised to its potential. Information needs strategic management to fully realise its potential and improve business potential. Kirk(1999) has further noted that the solution to such organisational blocks is in “ clarifying the context of the practice of information management by exploring aspects of organisations and managerial work and in exploring the nature of information at the level of the organisation and the individual manager.” Despite the presence of the highly developed external ESS, the HP’s independent IS system is still at an embryonic stage, and with in the concept of IS requires some development along with other emerging management trends and is a concept pretty much worthy of continuing attention and development. However it should be borne in mind that the too much information can obscure the real picture and hinder the HP Managers from truly capitalising upon the relevant information. (Kirk 1999).This is likely to happen in the hastened processing of large chunks of information in highly competitive settings. ESS has addressed the issue of too much information by its proper management and to gain or conceal information during actual physical interaction of organisational entities. The role of ESS and its own survival as an information system The way ahead for ESS’s success in alleviating the problems of HP was that they aimed to bring all solutions together through HP to match customer’s needs and perspectives.Through working closely with HP’s sales representatives and 30,000 channel and “membership” along with consulting and thought leadership impressed customers and business partners alike.The risk sharing strategy has proved equally fruitful and HP soon found good partners in Ariba ,Qwest Communication and Yahoo!At this point it is worth appreciating what the ESS has done for HP so far. What I can see is strong leadership, good strategic marketing and solid decision making here. . It has long been recognised by the academia that decision theory does not lie entirely within any one discipline and draws upon a number disciplines like psychology, economics, mathematics, statistics and social sciences. This also calls into play the use of the ‘industrial networking theory and the Consumer Relationship management to a small extent for the future ESS strategy. The industrial networks theory when applied to the HP case study would pose the query whether the certainty arising from the growth of long term relationships means that the actors will get to reduce transaction risks in business relationships as well as the investment risks arising from informal distribution. (Axelsson et al (1992).The theory can immensely benefit the HP information system managerial arena whereas the managers need to cultivate an awareness of the power and knowledge structures and then allocate resources and take decisions pertaining to control resources such as finance,people, materials, expertise and knowledge accordingly.Axelsson et al’s (1992) work also suggests that the senior information managers of HP in the industrial networks have to be aware of the management of direct and indirect power flows which will then have significant implications for the ability to influence the network or extraneous factors like the media or political arena’s . Finally the ESS experience could have done better with a better Post Implementation evaluation of the planning phase of any project implementation exercise. When the study of the existing system of HP was being undertaken, the performance of the current systems is rated.. Since the Customer Relationship Management (through ESS) at HP is a full fledged IS system and has all the issues and systems of any IS system, it is comfortable to evaluate it using any of the other post evaluation systems for the IS . In the case of ESS it can be said that most often a project is perceived as successful and not performs as successful (Gemmel & Pagano 2003). Success of a project would depend on managing user expectations effectively and more holistically (Clegg et al 1997). Whyte & Bytheway (1996) proposed that the three elements, the product, the service and the process need to be managed and perceived by the user to have been managed appropriately to ensure that the project is a success which holds true for the HP’s ESS management. As far as the implementation of the ESS for the HP company was concerned we saw overall that the process of managing the project also plays an important role. Towards some conclusions Furthermore I don’t see the third goal of Earl going very far i.e. the aim to “ Transfer knowledge from ESS. Take the learnings of the group and “throw them over the wall” to the rest of HP.”(Case study)And this brings in the fears of organizational change as this could lead to an overall resentment with in the traditional HP set up with is yet untouched by the innovation of ESS .The mistake that has happened here is that ESS has become an alienated blue eyed boy and it seems that HP has been ignored despite ESS’s claim of partnership with the work force of HP. In the long run ESS information system should be prepared to either merge with HP’s culture in a balanced marriage or risk disbandment.HP is indeed a large organisation and it would take a long time to get rid of inherently conservative nature of the HR and the red tape with in the large organizational structure.ESS is not really a part of HP.It reports to Ann Livermore’s organization which shows a lack of a connection which will become pivotal to the ESS information system’s future. It is indeed true that the ESS information system will still play a role in the future of HP but there will be organisational merging here which will again entail the use of the business scorecard approach.ESS will need to survive with its own talent and offer something new and sustainable to HP giant.This is the time for ESS to go with the flow and for HP to learn not to repeat the same mistakes it has done before as discussed elsewhere in the report.Overall ESS has made some innovative yet risky decisions for HP but it is time it has to think creatively to save itself or risk disappearing in the storm of the large,calm and conservative ocean called the “HP way”! Last but not the least on a concluding note I would like to cite a very wise (and humorous) quote from the genius Lewis Carroll in his very famous work “Alice in the Wonderland” to illustrate the difficulty faced by large organizations like HP in keeping their information systems in harmony and relevant while at the same time having problems in being able to estimate their own direction and stance in relation to the future of their business strategy. Would you tell me, please? Which way I ought to go from here?" "That depends a good deal on where you want to get to," said the Cat. "I don't much care where -" said Alice. "Then it doesn't matter which way you go," said the Cat (Alice in the Wonderland-Lewis Carrol) References McDonald, Malcolm H. B. (1992). Strategic Marketing Planning: A State-of-the-Art Review. Marketing Intelligence & Planning, Vol. 10, Issue 4 Simon, H. (1959), "Theories of decision making in economics and behavioral science", American Economic Review, pp.253-83. 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