The HYDRAUL UK Information System - Case Study Example

Abstract As the market environment gets increasingly competitive today, information technology has remained to be the key strategic tool for organization, almost across all industries. In this regard, organizations, especially SMEs, should take on an Enterprise System approach through the use of DSS so as to enhance their BI and CRM effectiveness. This would be an essential tool for strategically enhancing competitive advantage and sustainable growth to an enterprise in the long run. Acknowledgement I would like to express my sincere thanks of gratitude to my lecturer. This successful report would have not been possible without his guidelines and advice. I am also thankful to my family and friends for giving me moral and financial support. Table of Content: 1. Decision Support System……………………………………………………………….3 2. Introduction…………………………………………………………………………….3 3. The DSS Appraisal……………………………………………………………………..5 4. Case Study: The HYDRAUL UK Information System……………………………..…8 5. References………………………………………………………………………………13 6. Glossary…………………………………………………………………………………14 7. Appendix………………………………………………………………………………..15 Table of Figures: Figure 1: An illustration of DSS………………………………………………………………..6 Figure 2: The cost of CRM through old and new system……………………………………….15 Abbreviation List: BI: Business Intelligence CRM: Customer Relationship Management DSS: Decision Support System SME: Small-Medium Enterprise 1. Decision Support System Introduction The present state of the economic world is increasingly enhancing businesses to find new methods that can help strengthen their competitive advantage. In order to accomplish this goal are essentially focusing on strategic standards, as well as new tools and procedures. The development of information technology has created an entirely new business environment that is rapidly changing and more extensive. Consequently, this development of information technology has also enhanced better decision making within an organization, whereby in specific, has led to the creation of Decision Support Systems (DSS1), as well as the business intelligence (BI) systems2 (Raisinghani 2012, p. 234). Notably, the DSS is a computer based system that is designed to assist decision makers in using data, information, and knowledge so as to identify problems and make decisions in order to ultimately solve those problems. In addition, BI refers to extraction, analysis, as well as distribution of data from organization’s databases in order to support the more strategic decision making. Remarkably, in the today’s increasingly competitive market environment, organization managers are significantly being faced by the challenge of making optimal strategic decisions so that they can remain substantially competitive in their target markets (Hess, & Wells 2002, p. 3016). In this regard, most organizations are paying high emphasis on making fact based decisions through the use of the latest technology tools, including DSS and BI. Worth noting, the main goal of modern business intelligence, as I understand, is significantly to support more effective decision making. Most importantly, both BI and DSS are highly substantial in enhancing customer relationship management (CRM)3 through the use of factual information, effective customer data analysis. This ultimately led to development of strategic customer relationship decisions, which enhances the sustainability of CRM. In addition, the Small-Medium Enterprise (SME)4 management can benefit a lot in the use of DSS and BI computer applications, especially through enhancing the sustainability of their CRM (Ou, & Peng 2006, p. 782). Moreover, an SME can make use of the identified new opportunities and thereby implement effective strategies, which would ultimately enhance a competitive market advantage, as well as long term business stability. Adding more to that, the use of DSS’s BI application5 in an SME can enhance effective management of employees. In this regard, the employee turnover at work place would be enhanced due to increased job satisfaction derived from the use of an efficient employee management system. The DSS Appraisal Essentially, a Decision Support System is highly significant for organizations, more so to SMEs, as it is a major source of competitive advantage to a business. I confidently say this due to the verity that the market environment is increasingly getting competitive, which makes information to be a crucial component in businesses today. More specifically, DSS can offer great support to customer relationship management (CRM)6 (Qingling, et al. 2003, p. 23). CRM assists in understanding, anticipating and responding to the needs of customers in a consistent manner, right across the organization. It significantly helps a business enhance its sales in the long run as excellent customer service involves being aware of the needs of target customers and consequently reacting to them effectively. Notably, an effective CRM in an SME requires an integrated and efficient internal business system (Raisinghani 2012, p. 235). A CRM that is significantly enhanced by business intelligent that is DSS enabled can help an SME in developing better communication channels, collecting vital data such as order history and customer details, creating business profiles like customer preferences, and also identifying new selling opportunities (Wei et al. 2008, p. 1110). Figure 1: An illustration of DSS that can be established by SME (Source: Wei et al. 2008, p. 1113) Thus, CRM is a tool that is associated with DSS’s BI. In addition, in order to enhance their effectiveness, CRM and DSS are also associated with the workflow and the web. Worth noting, if used independently, these tools can only offer reduced services or even generate faults and functioning problems. Nonetheless, when interconnected they significantly become a very substantial and powerful tool for control and command due to the principle of synergy (Swift, 2001, p. 136). A good example of this is the order booking through internet without connection to the information concerning data stock status in the SME ware house. Subsequently, in case the product is not available, the SME would thereby be discredited by the affected customers, which would ultimately result to losing target customers. On the other hand, when web is significantly connected to the DSS’s BI and CRM’s information concerning the prospects or target customers, concerning their past contacts with the SME, as well as their interests in regard to business’s product line, more effectiveness would be enhanced in CRM (Sen, & Sinha 2011, p. 614). This is essentially because in today’s market environment, more and more target customers are increasingly adapting the use of internet in their day to day activities, including product searching and online shopping, which makes internet a more effective tool for use to enhance CRM. In this way, an SME would be enhanced to accomplish sustainable sales growth, attract and retain more target customers, as well as enhance customer loyalty to the respective SME business (Swift, 2001, p. 136). This significantly shows that DSS’s BI that is web enabled is highly critical for the realization of CRM goals. Most importantly, DSS and CRM tools should be enhanced to act on all levels of an SME business so as to ultimately bring an added value to a given strategic problem, as well as to the SME’s information management. In addition, much of the decisions concerning the improvement of future activities of an SME are based on the customers’ behaviors, which are evaluated by the CRM functionalities. In this regard, the CRM functionalities analyses and reports the historical data that is found in the data warehouse, which has initially been mined through the use of DSS’s BI. In addition, the forecast for production of goods, purchasing, as well as selling in a SME business uses DSS information (Raisinghani 2012, p. 247). Remarkably, the DSS, BI and CRM software are considerably and technically independent, but practically, these two concepts are significantly dependent to one another as the implementation of these particular tools is made at the same time. Although they seemingly reflect different types of analysis of the enterprise’s knowledge, they are, as well complementary to each other (Noori, & Salimi 2005, p. 233). Therefore, it can be concluded that DSS’s BI and customer relationship management, through their flexibility and dynamics, constitute the main part of the SME’s communication and self regulatory system. They considerably provide a very good knowledge of the business environment in which the SME evolves and runs its business and; thus, best reactivity. Today, as the market environment gets increasingly competitive, SME requires ensuring that their information system is viable, evolutionary, and autonomous. In this regard, DSS’s BI and CRM take the central place in the enterprise system approach in order to enhance the mechanism of self regulation in a SME (Wei et al. 2008, p. 1114). Notably, as opposed to other traditional methods of decision making and customer relation management tools, DSS’s BI is highly cost effective in respect to time, affordability and man power. Thus, organizations should take on an Enterprise System approach through the use of DSS so as to enhance their BI and CRM effectiveness, which are essential tools for strategically enhancing competitive advantage and sustainable growth to an enterprise (Kohli, et al. 2001, p. 185). 2. Case Study: The HYDRAUL UK Information System From the HYDRAUL UK case study, I found that both the HYDRAUL Holding Company (the franchisor) and the franchisees, information systems are not significantly cost effective, especially in regard to time, man power, performance, as well as affordability. I established that the current information system is a source of failure to the company and all its franchisees, which is a threat to their sustainable growth in the long run if something strategic is not done. For instance, the local offices use SAGE systems for their accounts and inventory. In this regard, I can commendably conclude that with the use of this system, these offices will only stock up to 5,000 of items available from the HYDRAUL catalogue. In addition, I found that the entire process is prone to errors and is very slow to complete transactions. Information on National Accounts can also be confused. This affects cash flow at the local operations side. The other example of the current system failure is that details of these are carried round by the engineers in their vans. The jobs details are then handed back at the end of the day, or when the engineer is back in the local HYDRAUL office to resupply. Also, I established that the inventory items are held in plastic boxes and are reordered by phone or fax when stocks are seen to be low. Notably, the use of van to carry job details and also reordering of inventory by phone or fax usually leads to waste of time, cost, and energy, which makes the whole system less effective. Another evidence that the current company’s system are a failure to the overall performance of the company, as I found, is that the jobs are then processed in the office, where office staffs have to contact the customer in order to get an order number. Once the order number is obtained the invoices are generated and posted or faxed to the customers. This can be 5-7 days after the job. Payment is asked for within 30 days, but usually payment is received up to 90 days after invoicing. Essentially, this case study made me perceive that many other various organizations are operating in a basic way with little knowledge of information systems benefits and application, as well as the relevance of enhancing Business Intelligence. In this regard, I can commend that both the HYDRAUL Holding Company (the franchisor) and the franchisees should significantly focus on the introduction of DSS that would replace the current system, which is significantly inefficient as it causes time wastage, increased cost, and decreased performance. The introduction of the DSS system to the company would be highly strategic as it would enable the company to eliminate all the failures associated with the current system. Notably, DSS’s BI technologies would assist both the franchisor and the franchisee management, especially in reporting, data mining, text mining, process mining, business performance management, bench marking, online analytical processing, complex event processing, analytics, prescriptive analytics, as well as predictive analytics, among other functions. In addition, through the use of DSS’s BI application system, the company would be enabled handle large information amounts, which helps in identifying and developing new opportunities (Ou, & Peng 2006, p. 784). This is as opposed to the company’s current system that can only stock up to 5,000 of items. Consequently, the HYDRAUL Holding Company and its franchisees would make use of the identified new opportunities and thereby implement effective strategies, which would ultimately enhance a competitive market advantage, as well as long term business stability. In addition, I learned that the company’s consideration to use this system, which would enhance it in improving employees’ efficiency, increasing the organization control, speeding up of decision making process, speeding up the problem solving process, enhancing automation of managerial processes, facilitating interpersonal communication, enhancing evidence based decision making, revealing new approaches to a problem space, creating competitive advantage, as well as enhancing CRM, among other benefits. Therefore, accuracy, swiftness, clarity, as well as orderliness would be significantly enhanced in payment, data, and order processing, among other company operations (Qingling, et al. 2003, p. 19). Furthermore, the DSS system should be also web enabled. In doing so, this would eliminate the use of fax, phone, as well as van for data and information delivery to the clients, engineers or to the company. The use of web would enhance instant and more effective information delivery, which is highly paramount for effective managerial decision making and better customer services. Also, it is significantly cost effective. For instance, it cost about £25 to handle a client through call centre, but it cost £2 only via a website (Kohli, et al. 2001, p. 180). More specifically, I learned that DSS would offers great support to sustainable customer relationship management in the company and all the franchisees. This DSS enhanced CRM would significantly assists in understanding, anticipating and responding to the needs of customers in a consistent manner, right across the organization. Consequently, the company would enhance its sales in the long run as excellent customer service involves being aware of the needs of target customers and reacting to them accordingly and effectively. Notably, effective CRM in the company would require an integrated and efficient internal business system. A CRM that is significantly enhanced by business intelligent that is DSS enabled would help the company in developing better communication channels, collecting vital data such as order history and customer details, creating business profiles like customer preferences, and also identifying new selling and market opportunities. In this regard, the CRM functionalities would be to analyze and report the historical data that is found in the data warehouse, which has initially been mined through the use of DSS’s BI (Wei et al. 2008, p. 1114). Worth noting, this DSS system would include all areas of the UK so that there is coverage throughout the country. In estimation, the DSS would only cost the company and all the franchisees £80,000 each, which include hardware, software, and training expenses. Owing to its exceptional benefits I have outlined in this paper, it is one of the best investments the HYDRAUL Holding Company and its franchisees can make. List of References Hess, T.J. & Wells, J.D, 2002, Understanding how metadata and explanations can better support data warehousing and related decision support systems: an exploratory case study. Proceedings of the 35th Annual Hawaii International Conference on System Sciences, 00(c), p.3008-3017.  Kohli, R., 2001, Managing customer relationships through E-business decision support applications: a case of hospital – physician collaboration, Decision Support Systems, 32(2), p.171-187. Noori, B., & Salimi, M.H, 2005, A decision-support system for business-to-business marketing, Journal of Business Industrial Marketing, 20(4/5), p.226-236. Ou, L.O & Peng, H.P, 2006, Knowledge and Process Based Decision Support in Business Intelligence System, First International MultiSymposiums on Computer and Computational Sciences IMSCCS06, 2, p.780-786. Qingling, L.Q, 2003, Analysis and design of CRM DSS based on GIS, Proceedings of the 2003 IEEE International Conference on Intelligent Transportation Systems, p.1-26. Raisinghani, M. S, 2012, Business intelligence in the digital economy: opportunities, limitations and risks, Hershey (PA), Idea Group Pub. Sen, A., & Sinha, A.P, 2011, IT alignment strategies for customer relationship management, Decision Support Systems, 51(3), p.609-619. Swift, R. S, 2001, Accelerating customer relationships: using CRM and relationship technologies, Upper Saddle River, N.J., Prentice Hall PTR. Wei, J.-yu W.J.-yu, Chen, R.C., & Yu, H.-feng Y.H.-feng, 2008, Study on the design of CRM-oriented synthetic decision support system, 2008 IEEE Conference on Cybernetics and Intelligent Systems, p.1111-1114. Glossary Decision Support System (DSS): An information system that is computer based, which supports organizational or business activities. Business Intelligence (BI) system: Also commonly referred to as DSS. Assist the management in reporting, data mining, text mining, process mining, business performance management, bench marking, online analytical processing, complex event processing, analytics, prescriptive analytics, as well as predictive analytics. DSS’s BI application: A Business intelligence system that is supported with Decision Support System. It helps in providing historical, current and predictive information of business operations for better decision making. Small-Medium Enterprise (SME): Business that is considerably big to be regarded as small business, but which is considerably small to be associated to big businesses. Customer Relationship Management (CRM): It is a business model of managing a firm’s interactions with customers. It assists in understanding, anticipating and responding to the needs of customers in a consistent manner, right across the organization. Appendix A Figure 2: The cost it takes to handle a customer through call centre as compared to handling client via website. Notably, it takes about £25 to handle a client through call centre, but it cost £2 only via a website (Kohli, et al. 2001, p. 185). Read More