Role of Information System and E-Commerce Technology in Dell - Research Paper Example

Role of Information system and e-Commerce technology in Dell Table of content B2B, B2C and C2C interaction 7 Introduction Business organizations have recognized information as one of their crucial resources and through the use of information technology these companies have started using the information as a significant weapon for business operations. The traditional approach towards processing of data and generating vital information from them has changed over the time through technological advancements. These applications of IT have provided organizations with improved efficiency in the context of cost-reduction, and better effectiveness. Information technology and its applications have proved to be the key component for doing businesses irrespective of their types and industry. It has also been observed that the applications of IT can play vital role in transformation of the entire business processes and operations. This study has been intended to analyze the role of IT and information systems in performing the global business operation by an organization (Earl, 1996). According to the experts who observe the IT applications into the business organizations have confirmed the renovation of the business organizations through IT applications and online computing technologies (Lan, 2005). For better analysis of the topic a case organization named Dell has been selected which mainly provides products and services of information technology and information management to its customers across the globe. Types of information system technologies used by the company Dell has a wide range of systems and technological equipments which it uses for performing various management tasks under its global business operations. The company has information technology solutions which provide more openness, flexibility, and integration which reduces information technology complexities of their business operations. In context of openness the company owns Independent Software Vendor (ISV) Partner Program which provides management assistance through its integrated platform. Dell management Console is another example which provides a framework within which customers can obtain assistance in hardware management enabling finding their solutions. The company has an unmatched capability of server technology named PowerEdge which provides next generation technology to the business organization. The embedded management supports organization in the process of streamlining certain business activities such as maintenance of the processes, deployment and updating of systems, embedding management and technology together and directly enabling them along with appropriate hardware support (Dell.com-a, n.d.). Using IT applications also requires organization to store plethora of data into servers which are considered to be the heart of the information technology infrastructure of the organizations. To meet the challenges posed by the networking activities the company has substantial software capabilities which make the networking task more convenient (Dell.com-b, n.d.). Dell has always concentrated on it internet based services which helps them in handling their continuously growing sales across the globe. Using the concept of e-hub which facilitate sharing of information and other resources across its business locations ahs also helped Dell in improving their business performances at all of its business locations (Bidgoli, 2004). The company has always represented itself as an extensive user of information to keep its businesses accelerated and lean in context of its global business operations. Through its web based application and information system usage the company has set examples in terms of having an effective business model resulting into a modern day corporate culture. The information system of Dell was one of the major factors in making the company a pioneer that it is today. The concept of customized PC in which Dell was making computers according to specifications from the customers themselves, required customer-requirement and other related information to flow into the company in real-time. The use of various information systems made it easy for customers to access the website of Dell and set their specifications after going through the list of products offered by the company. Role of information systems in decision making of the company The company has relied on the technologies of information system from the very beginning to support its decision making process. The company initially had a strategy which focused more on retail selling of computers and its associated products. The company brought its products into the market through the retail chains. Revenues generated from the retailing of the company’s product were observed to be declining during the year of 1992. As a result of the declining sales performance the company decided to abandon its retail business and adopted the strategy of direct selling. The approach was adopted by the company to boost its sales performance. For proper implementation of strategy the company started its own websites during 1996 which offered customers to customize their configuration and estimate the price of the product. Rather than adopting the approach of retail selling the company insisted on having a lean model of manufacturing. The developed model of Dell concentrated more on direct selling to customers and established a direct communication with them. With a help of small group of explorers the company identified the importance of internet which helped them in connecting with its customers. The website of the company helped the organization in selling $1 million from the first week of the launch of its website. The information system helped the organization in providing technical support to its customer through its 35000 pages contained in its website to assist its customers (Lucas, 2008). Proper marketing approach has also been benefited by the information system due to which the organization collects crucial customer information through numerous technologies to attract most of its customers which included individual customers and other organizations. Technologies such as ISV Partner Program have helped the organization substantially in developing proper management system for vendors. All the tools and technologies and their functionalities are validated by series of engineers over the platform of Dell (Dell-c, n.d.). Customer relationship management through information technology The company faced a huge loss of $65,000 during the years of 1992-93 which also experienced the cutting down of prices by its competitor Compaq. To resist the loss and bring more stability to its business the company adopted numerous strategies for re-engineering. These strategies were customer oriented and resided around the concepts of internet and web technology usage to capture maximum customer base. The company adopted strategies such as mass customization of its product with just in time strategy for its marketing activities, also more electronic applications for ordering and shipments activities were made. To establish better business relation with its customers and business partners the company initiated e-collaboration concepts with its major and priority buyers. The efforts made by the company to emerge as a leading name in providing information technology products and services resulted during the year of 2001 when the company Dell gave its excellent business performance and generated revenue at the rate of $4 million from the sales of computer and web based services. Its contribution to the Customer Relationship Management (CRM) is evident form its innovative approach of tracking the orders and shipments of the products through the help of internet. The web based operations of Dell also included the facility of viewing the configurations and prices of the products which were being approved by customers as well as the company. The Customer Relationship Management System of the company served to be the major support for the organization in becoming a leading name among CRM using firms. Through this technology the company improved its customer service and also the communication channel of the company (Anonymous, n.d.). Dell provided its customers with a unique feature of ordering their products directly to Dell and gets their product manufactured as per their specifications directly through them. The company also focuses equally onto the innovative approach for its customer service and relationship marketing through its website (Baker, 2003). As far as various management systems like MIS, DSS, and ESS are concerned, they are well implemented in the organization. MIS stands for management information system, DSS stands for decision support system and ESS refers to executive support system. All these information systems help top and middle management of the company in their decision making process. With the proper implementation of these systems Dell has been operating in more cost effective and efficient way than its competitors for a long time. B2B, B2C and C2C interaction B2B refers to business to business transaction, B2C refers to business to consumer and finally C2C refers to consumer to consumer. As far as online B2C interaction is concerned there are online store of Dell where consumers can purchase Dell’s products. Apart from retail consumers, there are thousands of institutional and business customers who are involved in various business transactions with Dell through company’s web pages. Customers who would like to purchase various systems like ERP system, crisis management system of Dell, can contact the company through its online store and its websites. Advantages of the internet and web based technologies The extensive use of internet and web based technologies along with information systems for its sharing and analysis helped the company significantly. It could be said that the entire business operation of Dell has been transformed by the involvement of information technology into the business operations of the company. Major advantages which the company has received by the applications of information technology contain a wide range of points which covers almost all of the dimensions of the business operations of Dell. The company enlarged its product ranges by adding more number of products and offering verities of products to its customers. The savings through the cost efficient system has also helped the organization in cutting their costs of around $1 million per year from the manufacturing costs. The company developed a systematic approach towards its management and developed its MIS which supported the organization in monitoring and controlling the usage and flow of resources and materials and products within the organization. Controlling and monitoring of services offered by the firm has also been controlled and monitored through the system. The MIS of the company processes the data captured by the company and provided vital information to the company which are of potential use during the process of decision making of the company. The company also utilizes its customized approach towards the manufacturing system of the organization through the help of information technology and internet. Through the help of such technologies the company became capable of offering the option of customization to its customers which included a group of subsystems of MIS which worked in coordination with each other to produce the output for its customers (Stair et al., 2009). The company realized a vast difference in its performance after the usage of internet and web based technologies which have also been accepted by the CEO of the company, Michael Dell. According to Dell the company has always considered the information technology as its ultimate source of success and improving business operations and confirms that these technologies are also going to be helpful in coming future (Obrien, n.d.). Challenges posed by IT and e-commerce technologies The technological advancements in support of the business operations have rapidly improved the efficiency and effectiveness of the business operations of the organizations. On the other hand dependencies of business operations over these technologies have also remained questionable due to several aspects of the business operations which are exposed to risk with adoption of these technologies. Some of the challenges and limitations of the information systems and their related technologies have been observed as the limited number of contacts into the customer records with whom only the company performed its business operations on regular basis. Limited number of customers resulted into slow down of the sales performance of the company as new customers are also required for increased sales performance of the company. Taking customer profiles from external sources of data could be of use for the company to enhance its business operations. Another major challenge of the system remained the irresponsive nature towards the external factors which influences the business operations of the company such as economic slowdown, natural calamity, and other factors. These factors are influential to the buying behaviors of the customers and the system fails in considering such aspects during the management and planning of the company (Baker, 2003). The poor condition of customer service of the company towards its customer also posed a big challenge for the company due to irresponsible behavior of its customer service which the company outsourced to other nation countries who retarded the quality and performance of the customer service by their harsh and rude approach towards their customers (Schniederjans et al., 2007). Outsourcing its customer service activities to other organizations proved to reduce the company performance and unorganized usage of information systems by the companies whom the customer service domain was provided. The negligence resulted into loss of quality standard of the services offered by the company to its customers (Hirschheim et al., 2009). Certain issues are also raised from the security point of view which indicated the issues related to the security and encryption of the organizational data for its protection. Threats have also been observed from agents like hackers, viruses of variable types and their impacts on the system, identity theft, and also specific program codes which impact the system and its process flow (Kleist, n.d.). The company needs to check its potential threat from phishers and hackers who are a growing threat to the IT and e-commerce based industry. Dell also runs the risk of losing money from customers who make monetary transactions through the internet. Too much dependence on e-commerce tools might render the core competencies of the companies vulnerable to attacks from competitors. Knowledge management in the company Improved business structures and better sales performance can be achieved through the proper channelization and utilization of the knowledge available within the organization. Many organizations have their own way of knowledge management which is synchronized with their human resource policies to make maximum utilization of the knowledge management. In case of Dell the company adopted its unique strategy of direct selling to its customers and assembling their computers as per the users’ requirements. The company possesses a very sophisticated and delicate system of knowledge management on which the entire business model of the company has been established. The company has extensively utilized the technologies supporting them in making repository of electronically gathered data of available components required for production. The company has divided its entire production process into several parts which deals with taking customers orders from the available menu, supply of required materials for production by the suppliers, and manufacturing of the products are done through the assembly of supplied components as per the customer requirements. With the help of proper knowledge management services the company ahs improved its sales performances in last four years and has grown more than 83% annually (Cortada & Woods, 2000). Summary & Recommendations Dell has recovered itself from the huge loss of 1993 and has shown a continuous improved performance over the period of time. The company has enormously used the internet and web based technology for improving its business performance. An efficient use of MIS applications has resulted into improved business structure of the company. Proper management of knowledge and information through highly developed and powerful information management systems have supported the organization to expand its business globally and improve its revenue from multiple locations. The strategy of directly selling to the customers and taking orders from them has also strengthened their ability of performing at international level. At present the company entertains both individual customers as well as organizations which seek their IT support in performing their business operations. These are certain strong aspects of the company which are required to be improved more to move up in the list of its competitors and have maximum market share. To have a set of alternatives is very much essential for the company. These alternatives could be as follows: In the field of computer manufacturing and web based services the company has already created its position and should focus more on services like business support and business intelligence for its client companies. The company should also focus on reducing its product price which could be done by reducing its manufacturing costs. Adoption of data warehousing and data mining techniques are useful for analytical activities in decision making process and the company should utilize this technology in identifying customers buying behaviors and patterns. To remain ahead of its competitors in global market the company should try to include more number of strategies like direct selling which improves the ability of the company to have a better reach to market and its customers. References Anonymous. (No date). Supply Chain Management & ERP. Retrieved on: January 10, 2010. From: http://www.wiley.com/college/turban/0471400750/ppt/ch06.ppt Baker, M. (2003). The marketing book. 5th ed. Butterworth-Heinemann. 583. Bidgoli, H. (2004). The Internet encyclopedia, Volume 1. John Wiley and Sons. 583. Cortada, J. & Woods, J. (2000). The knowledge management yearbook 2000-2001 KNOWLEDGE MANAGEMENT YEARBOOK. Gulf Professional Publishing. 62-63. Dell-a. (No date). Dell.com. Retrieved on: January 9, 2010. From: http://www.dell.com/content/topics/global.aspx/casestudies/casestudies_category?c=us&cs=555&l=en&s=biz&~page=c&~tab=4 Dell-b. (No date). Dell.com. Retrieved on: January 9, 2010. 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